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VOL. 126 | NO. 10 | Monday, January 17, 2011

Tom Pease

Walking the Plank?


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One of the best lines about small business ownership comes from friend Jay Myers. I used it on the cover of my book: “Small business is the fight of a lifetime.” Amen to that.

It is a fight. Adversity rules. You are lucky if it is for a lifetime since 70 percent fail in seven years. If you do fail, it can ruin everything: your marriage, your finances, mental and physical health, relationships with kids, and self confidence. Then there are the creditors, landlords, vendors and customers who can suffer heavy loss if a business fails. So it is a serious matter. And it happens all too often. You are not only playing with your money but others’ too.

The 70 percent failure rate attests to many entrepreneurs, as well as their teachers, being ill prepared and ill advised. There needs to be some standards set, some competencies met, before anyone is allowed to open a business or officially advise.

Advisers I see in this city lack needed business credibility. It is hard to find one that runs and grows a business of more than three employees. Or, has a record with the same business for 10 years. If you are going to teach it, you should have done it, not just talk about it.

It is especially important to be able to interpret financial statements and learn how to handle trouble since there is plenty of that. Much of that can only be gleaned from experience, from living it. I saw a survival movie on hypothermia. The instructor told the students to put down their books and he would show them hypothermia and not talk about it. He sat them in an ice water tub for a long time. They got it. Make sure your advisers have sat in some ice water for a long time. Otherwise, they may, however unintentionally, be leading you to the plank.

It is time for business owners to be licensed and to prove their qualifications. Advisers need to be certified in some way. For the best advice, I would not get it from somebody in the advice business. Find a business you admire and ask its owner to meet and answer your questions. This will be the least impartial advice you will ever get and be free. Try this with owners that have grown a company, have at least 10 employees (post-recession) and 10 years in that business.

One such teaching group is the Service Corps of Retired Executives. They have the experience, don’t charge, but are retired. You are not looking for a positive person, so that you are encouraged, or avoiding one that sounds negative, lest you be discouraged, but an ACCURATE one so you will survive! Margin for error in small business is small. You cannot afford to be wrong or led wrong. Take courses. Ask other owners. Know for yourself. The owner must know.

Ultimately, business decisions are lonely affairs. That loneliness is your gut saying only you can decide. For your sake and your business’s, be right. What is true for one owner is not necessarily true for another.

You did want to be a business owner – a very serious matter.

Tom Pease is owner of e/Doc Systems, an office equipment company.

PROPERTY SALES 36 154 6,546
MORTGAGES 34 94 4,129
BUILDING PERMITS 201 554 15,915
BANKRUPTCIES 43 126 3,396