business owner
Are you Thinking About Starting a Business?
The last post on Starting a Business was popular, so I thought I would share a key lesson learned and then provide links to previous posts that will provide insights as you launch your own business. If you have any questions, just post them as comments; I would happily reply.
The COVID-19 pandemic has created a great deal of uncertainty and opportunity. For many, now is the ideal time to explore their dream of starting a business and jumping into entrepreneurship. That can be exciting, fun, stressful, financially rewarding, and financially challenging, all within the same short period of time.
Being prepared for that roller coaster ride and having the ability and strength to continue pushing forward is important. Something to understand is that “Things don’t happen to you. They are the Direct Result of your own Actions and Inactions.” That may sound harsh, but here is a prime example:
When I was closing my consulting business down, I trusted my Accountant and Payroll company to handle all of the required Federal, Wisconsin, Ohio, and Colorado filings – something they stated they would handle, and I accepted at face value. Both companies had done a great job before, so why would I expect any less this time?
About nine months later, I started receiving letters from Ohio and Colorado about filings due, so I forwarded them to the Accountant and Payroll company. I thought this was “old business” and was being handled, plus I had moved on. It was probably just a timing error, something easy to explain away.
Skipping forward nearly three years, I had been threatened by the IRS and the Revenue Departments from both Ohio and Colorado. I started with a combined total of nearly $500K in assessments. Slowly that dropped to $50K, and then to $10K. I spent countless hours on the phone and writing letters explaining the misunderstanding. It wasn’t until I finally found a helpful person in each department willing to listen and tell me specifically what needed to be done to resolve that situation. My final cost was around $1,000. I was relieved that this fiasco was finally over.
I blamed both the Accountant and Payroll Service for these problems for the longest time. Ultimately I realized that it was my business and, therefore, my responsibility to understand the shutdown process – regardless of who did the work. I would have saved hundreds of hours of my time and several hundred dollars by gaining that understanding initially.
I was not a victim of anything – this situation directly resulted from my own inaction. It did not seem very important at the time, but my understanding of the situation and its importance was incorrect, and I paid the price. Lesson learned. It was my business, so it was still my responsibility to the very end.
Below are the other links. You don’t have to read them all at once, but it would be worth bookmarking them and reading one per day. Every new perspective, idea, and lesson learned could be the thing that helps you achieve your goal a day, week, or month sooner than expected. Every day and every dollar matters, so make the most of both!
- Comments on and a link to an on Curt Culver about Entrepreneurship.
- Comments on and a link to an HBR article about Start-ups and Entrepreneurship.
- Innovation, Intelligent Failure, and Failing Productively.
- Acting Like an Owner – Good Preparation for Becoming an Owner.
- Profitability Through Operational Efficiency.
- What Are You Really Selling?
- Continuous Improvement and a Growth Mindset.
- The Value Created by a Strong Team.
Acting like an Owner – Does it matter?
One of the biggest changes to my professional perspective on business came during the time that I was running my own consulting business. Prior to that, I had worked as an employee for midsize to large companies for ten years and then as one of the first hires at a start-up technology company. I felt that doing hands-on work, managing, selling, and helping establish a start-up (where I did not have an equity stake) provided everything needed to start my own business.
Well, guess what? I was only partially correct. I was prepared for the activities of running the business but really was not prepared for the responsibility of running a business. While this seems like it should be obvious, I’ve seen many business owners whose primary focus is on growth/upside activities and not the day-to-day. That type of optimism is important for entrepreneurs – without it, they would not bother putting so much at risk.
People tend to adopt a different perspective when making decisions once they realize that every action and decision can impact the money moving into and out of their own wallets.
Even in a large business, you can usually spot the people who have taken these risks and run their own business. I was responsible for a Global Business Unit with $60+ million in annual sales and ran it like a “business within a business” because I had P&L responsibilities, and the decisions I made mattered to the success of my business unit.
It’s more than just striking out on your own as a contractor or sole proprietor. I’m talking about the people who have had employees, invested in capital equipment and went all-in. These are the people thinking about the big picture and the future.
What do these people do differently than those without this type of experience?
One of the biggest things is they view business as “good business” and “bad business.” Not all business is good business, and not all customers are good customers. There needs to be a fair commercial exchange where both sides receive value, mutual respect, and open communication. You know this works when your customers treat you like a true partner (a real trusted advisor) instead of just a vendor, or at least do not try to take advantage of you (and vice-versa).
A business is in business to make money, so if your work is not profitable, you should not do it. And, if you are not delivering value to an organization, it is very likely that you would be better off spending your time elsewhere – building your reputation and reference base within an organization that was a better fit. While that may not be true for all business endeavors (think how long it took Amazon to become profitable and where they are now), it generally is true for employees at all levels.
“Bad” salespeople (who may very well regularly exceed their quotas) only care about the sale and their commission – not the fit, the customer’s satisfaction, or the effort required to support that customer. Selling products and services people don’t need, charging too little or too much, and making promises they know will not be met are typical signs of a person who does not think like an owner. Their focus is on the short-term and not on growing accounts. As an aside, their compensation plans generally only reward net new business and first-time sales, so these actions may not be completely their fault.
How you view and treat employees is another big difference. Unfortunately, even business owners do not always get this right. I believe that employees are either viewed as Assets (to be managed for growth and long-term value) or Commodities (to be used up and replaced as needed – usually treated as fungible, as if they are easily replaceable). Your business is usually only as good as your employees, so treating them well and with respect creates loyalty, and results in higher customer satisfaction.
Successful business owners usually look for the best person out there, not just the most affordable person who is “good enough” to do the job. The flip side is that you quickly need to weed out the people who are not a good fit. Making good decisions quickly and decisively is often a hallmark of a successful business owner.
Successful business owners are generally more innovative. They are willing to experiment and take risks. They reward that behavior. They understand the need to find a niche where they can win and provide goods and/or services tailored to those specific needs.
Sometimes this means specialization and customization, and sometimes it means personalized attention and better support. Regardless of what is different, these people observe the small details, understand their target market, and are good at defining a message articulating those differences. These are the people who seem to be able to see around corners and anticipate both problems and opportunities. They do this out of necessity.
Former business owners are usually more conscientious about money, taking a “my money” perspective on sales and expenses. Every dollar in the business provides safety and opportunity for growth. These usually are not the people who routinely spend hundreds or thousands of dollars on business meals or who take unnecessary or questionable trips to nice places. Money saved on unnecessary expenses can be invested in new products, features, or marketing for the benefit of an organization.
While these are common traits found in successful business owners, it is possible to develop them even if you have never owned a business.
When selling, are you focused on delivering value, developing a positive reputation within that organization and with your customers, and profiting from long-term relationships? When delivering services, is your focus on delivering what has been contracted – and doing so on time and within budget? Are your projects used as examples of how things should be done within other organizations? Are you spending money on the right things – not wasteful or extravagant things?
These are things employees at all levels can do. They will make a difference and help you stand out. That opens the door to career growth and change. And it may get you thinking about starting the business you have always dreamed of. Awareness and understanding are the first steps towards change and improvement.
Where Ideas, Experiences, and Lessons Learned Intersect 