Is Your Business Working For You?
When we start out in business we have dreams that the business will be the engine for our personal growth in the future. In the beginning the line of ownership is clear - we own the business.
As sales develop, and we get busier, we call for expert assistance – typically from our accountants, who are only too keen to take on the role of business advisors as well. And much of the advice we receive has nothing to do with improving sales [which should be the core focus of any business] – but rather focuses on a bunch of other topics, the most important of which seems always to be that issue of tax.
At this point your advisor is typically working for your firm, and not for you personally. In fact, many of our professional advisors actually work for the government but get paid by us. Let me put that into perspective.
If your accountants really worked for you personally it would be inconceivable for them to recommend that you give away your home to support a business with a 96 percent chance of failure over ten years. On top of which, if you were to share any scheme or idea that you personally want to do that might conceivably be an evasion of tax, your accountant is obliged to notify the authorities. I am not sure whether your accountant is working for your business, or working for the government, but I sure know one thing – he isn’t working for you. Is it any wonder that we little folk get screwed so often and so completely?
And so we start to play with money, rather than focusing on sales. We do this because the advice we are receiving is wrong for personal business owners – but nobody seems to have cottoned onto that yet. Which means we sign away all our personal possessions to secure money for the firm.
The question is simple. At this point - is the firm still an engine for your personal growth, or have you become an engine for the growth of the firm?
I believe that the biggest problem we face as small-business owners is that there isn’t a valid small-business methodology, or business model, that is not based on big business. I know that I have been talking about this for the past two weeks, and will probably continue for the next few. But the more I think about it the more I am convinced that we entrepreneurs are being sold up the river.
Not even the stuff that is currently taught at school or university under the topic of entrepreneurship seems to be correct.
Let me give you an example. Our hero is retrenched from his job as a sales manager of a listed company supplying other listed companies. He has been a passenger in the vehicle of enterprise for many years – so he KNOWS he has the skills to drive because he has been watching others do it for so long! Since his primary skills are in supplying listed companies, and since he is not told anything to the contrary, he assumes that he can make a living running his small business supplying listed companies. Or even the government. He is encouraged in this by everybody that he speaks to – the banks, accountants, and all the books he reads. Nobody questions the insanity of an individual startup business owner trying to compete head-on with a large listed company.
It is automatically assumed that he will need to borrow money – and very few business books specifically state that he will be signing away all his assets. And that’s what he does. The problems are that as his sales grow he faces the challenge of doing business with big companies – and these include slower rates of payment, longer purchasing cycles, no understanding of the needs of their suppliers, and the list goes on. The bottom line is that he needs more and more money to support thin margins in a game that he stands little chance of winning, and each business borrowing sucks him deeper and deeper into the backside of the tiger whose tail he is hanging onto so grimly!
[That’s not quite true. He can win. I think I might have known somebody who did once. But every business that I have consulted with that was involved with government, for example, has closed with my hero taking a bashing. The same applies to many of the small businesses dealing with listed companies.]
Why is it that running your own business should take over your life? And why is it that it is our badge of courage that we work so many hours and forfeit any form of a reasonable life? And why is it that we all believe that we'll be out of it in two years? And why is at that none of us are?
I ask these questions because I am confused. I see far more pain than I see fun in the emails that come past my desk. Could it be that we are not questioning the fundamentals, because we are deferring our common sense to the “better wisdom” of the “educated” professionals.
If you can’t take this week of too many public holidays off – as I suspect many of your staff are without your permission – then I must ask: Is your business working for you, or are you working for your business? Just who owns who here, anyway?