Should You Own a Business?

Bob loved working in information technology. He excelled at data protection and security. His passion led to frequent promotions and assignments to the plum projects. He did so well that he decided to open his own business providing data protection and security to mid-size firms. He and his partners analyzed the market, found the right products, and even came up with a great name for their firm. So, with hopes high, fanfare, and flourish they opened their company.

It did well, at first.

In a couple of months, however, the glamour had left. Bob and his partners still loved doing the high-tech/information work. They discovered that they did not like the others parts of owning their own business: marketing, sales, accounting, hiring and firing employees. The partners left one by one, until Bob remained. His dissatisfaction grew. Finally, Bob closed the business and found a job working with a major IT company. Bob once more is happy. He receives generous raises and promotions.

Many may judge Bob a failure. I do not. Bob, like many people who start their own businesses, found that business ownership did not meet his expectations. I do not judge Bob a failure because he realized that he did not like responsibility for the entire business--and he found an exit strategy that allowed him to return to his passion and leave the rest behind. I believe the failure lies with those who do not recognize their misery and keep trying to do something that makes them miserable.

The fact remains: not all people should own businesses.

Bob and his partners did excellent research on their market, their product, and their strategy. They neglected to research one essential element of their plan: themselves. Potential business owners must ask several questions about themselves before spending any money to start a business. Some of these questions include:

1. Why do I want to start this business? What assumptions am I making?
2. What have I done to validate my assumptions? Are my perceptions accurate?
3. Am I willing to assume the risk of ownership as well as the perceived benefits?
4. Is my spouse and family willing to assume the risks and uncertainties ownership requires?
5. Am I willing to work the 50-80 hour weeks a business owner must work?
6. Am I capable of sacrificing the family time that I think I will be gaining, but will not?
7. What skills do I lack to run a business? How will I compensate for those inefficiencies?
8. Am I planning on the help of others? Have I discussed it with them?
9. Can I stand the uncertainty of providing the income my family expects?
10. Am I excited about creating the business? How about maintaining it?

This list will reveal a little bit of the information you need to discover --about yourself--before you spend any money starting a business. Study the following links to learn more: SBA's 20Questions to Ask Before You Start a Business, Small Business News, Entrepreneur's Journey, Small Business: Canada.

Like most entrepreneurs Bob and his partners assumed that because they were good at what they did, they would be good at doing it in a business of their own. Michael Gerber, the author of The E-Myth Revisited, states that most entrepreneurs are "technicians having a spasm of entrepreneurship". Bob and his group definitely met that standard.

We will explore the difference between the entrepreneur, the manager, and the technician next week.You need to fulfill all three conflicting personalities for your business to succeed.