Friday, October 11, 2013

An Icelandic Entrepreneur


THE CHAIRMAN OF THE BOARD SINGS COUNTRY

Anna, Chairman of the Board

I guess that most of us won’t get too interested in that Led.  The Chairman sings country, So What? Well this Chairman is Anna Halla Emilsdottir and the Country songs she sings are about young girls driving their cattle in the annual Icelandic round-ups.  You see, Anna is the Chairman of a 6 year old family owned tourism company in Reykjavik, Iceland.  I heard her sing while a passenger in a 6 passenger van she was driving during an all day sight-seeing visit to her home town.

I ended up next to the driver’s seat and had plenty of time to learn about this small business woman and her family business.  I thought it would be interesting to talk about Anna’s successful company for my colleagues at SCORE with whom I spend a lot of time here in the States trying to help our small business people succeed in the difficult task of starting and growing a viable company.

The family part of the family business comes from the fact that Anna, her husband  and children are the owners of a Tour Bus company called Free as a Bird or FAB. Anna and her husband each have a 15% ownership interest and their children share the remaining 70 % of the Company.  The parents did this after a few years of operation because, as she said, “Money always makes trouble if there are any questions about the details”. That’s a pretty spot on understanding for a school teacher.  I know a batch of successful American business executives who could not explain the need to clarify the interests  and situation of all of the interested persons in as succinct and straightforward way.

Both Anna and her Husband work at the business as does one of their children.  Anna retained her job as a teacher in a local kindergarden and shows up when an extra driver is needed, like when a Cruise Ship with 2100 passengers and 900 crew tie up and have hundreds of folk who want to see all they can in the single day the ship will spend in Iceland.  On the day we had the pleasure of meeting Anna in her role of Tour Driver she went past the Kindergarden to open it for the day and get it running before she showed up at the pier.

I asked her what her experience was working so closely with her husband and what did her children think.  She, in her straight up manner, said it was hard at times and it was easy to have little conflicts now and then but overall things worked out as long as everyone talked it out.

Golden Falls

They started the business because her husband lost his job around 7 years ago.  He had been a Tour Bus driver and was familiar with the business, from an employee’s point of view.  They scraped up the money to buy their first vehicle, a 7 passenger VW Diesel van.  Now they have two 7 Passenger VW vans, three 17 passenger VW vans, one 43 passenger bus, one 36 passenger bus and one 6 passenger 4-wheel drive Jeep type. All look fairly new. Without digging into their situation too deeply I figure that they are doing quite well.

The more I thought about the Anna Emilsdottir/Free as a Bird story the more I realized that much of their experience in putting this enterprise together and moving it to success is not much different than what their counterpart in the States could have encountered.

Let’s look at those Icelandic experiences and see if they are that far away from the likely  experiences a successful USA enterprise might have had.

Before I start, I should tell you that the people like Anna in the world really like America and envy us for everything we have. they think we are pretty lucky to live in America and so do I.

Looking at Anna’s business; first off, getting into business for themselves wasn’t something they always planned on.  It was forced upon them because economic conditions resulted in losing a job. Sound familiar Yanks?  Then they decided to get into the business of hauling tourists around the area. How did that happen?  The husband had already driven tourists around and “knew” the business.  He and his wife did not decide to open a steam organ repair business because they liked steam organ music; they got into something with which they were familiar, not a whim or a glamorous mirage. Thank goodness that tourism in Iceland and the Cruise Ship business were in a growth mode.

The next thing that parallels the American experience was that the business was self capitalized.  No one gave them the money.  They scraped it up.  Maybe savings, maybe personal credit but, for sure, not someone else’s money started Free as a Bird.  In America over 95% of new businesses are self financed.

Doing business with family members was good news and bad news at the same time.  The Emilsdottirs were fortunate enough to react to the tough spots with enough smarts that they are still married and continue to get along with their kids.  The giving of ownership interests to the children was a very smart thing to do.  It took the whole idea of the family company business from just that, an idea, to a tangible, living entity in which success had a very real meaning for all, not just for the people who were earning a payday.

Anna kept her day job.  Not a bad idea.  In practice this is tied up with the reality of working with your spouse as much as any economic benefit it might have.  By maintaining a strong outside interest, even one that has major obligations, the family member has an identification away from the family business.
The party with the outside job is someone in a workplace, a mini society, where she or he can have pride, status and any of the other intangible values a job can provide over and above money.

My evaluation has been that the kinds of things Free as a Bird encountered and survived were not that far from what our countrymen would have run into trying to get a new business under way. We did not go into much detail because we did not have much information, just instincts and insights so you might think my reaction is off base.  If so, it is your opinion and is every bit as valid as mine.

As I re-read what I have gotten on paper I can hear my more politically obsessed colleagues muttering “Those guys must have gotten a lot of help from the government or something”. Why not say that, they say the same thing every time they see an immigrant do well here in the States.  I hate to say it but I am afraid too many Americans, even those who claim to have graduated from our finest institutions of higher learning, think that somehow it is not right for people who were not born & bred in the good ol USofA to succeed in business there.

That made me think about Anna and to figure out what kind of head start her family got by trying to build a business in Iceland.  Let’s see, the government there is at least as nit picky when it comes to licenses and permits and documentation for businesses as ours is.  That was not a plus for Anna.

Then there’s the cost of everything a business or a person needs; a lot higher there than we are paying in America whether it is a 7 Passenger VW van or a ham sandwich.  Hmm, how about taxes?  Well, the personal income tax is a lot higher there than in America.  The average person makes less per month and pays proportionally maybe twice as much in taxes.  But, but, but,,,, they don’t have to give their workers health insurance.  The government takes care of that for both the workers and the owners of businesses.  A doctor’s office visit costs about $US 6.00 and if you have to go to hospital it and the treatment are free.  People do not complain about long waits for treatment nor lousy service.  They think the health care system is just fine.

The whole place is Lava Rock & Moss



Good schools, including university are essentially free and if you lose your job you get enough to live on from the government.  (The last report I saw about the results of international tests of High School students in subjects like reading, math and science put Iceland #2 or #3 as I recall.  USA was #26 or #27.)

If you lose your job and have to take the government money maybe you will have to walk around like an old guy I saw in Reykjavik who was picking up paper with a long handled tool to earn his dole.  He didn’t look too overworked to me.

My colleagues will no doubt tell me that the Scandinavian politico/social system is, by definition, bad for people.  Don’t tell the folks in Iceland, they don’t know any better and think they are pretty well off.

All in all talking with an Icelandic entrepreneur left me with the sense that we are, by many measures well off in America and the idea of opportunity being there is still a reality and not just a slogan that pops up during the almost annual fools’ festival called Elections.  We are incredibly well off in America.  The only people who haven’t figured it out yet are mostly Americans, or so it seems.

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