Archive for June 27, 2009
Reasons not to start a small business
In an earlier post about starting a small business I mentioned that one reason should not be about money. Another reason frequently mentioned by would-be entrepreneurs is that “I want to be my own boss.” When someone mentions one of these reasons, it makes me cringe. Below, I discuss why these are not good reasons to seek to start a business and why they could hurt the chances of the entrepreneur.
“I want to make money”
There is no doubt that anyone who starts a small business is driven in part by the potential to increase their compensation beyond what they could ever earn as an employee. But this should not be the primary reason. The simple reason being that for most businesses you don’t start by making money early on. For those dog days, where the founder(s) of the business have to work harder and take less money home, it is useful (if not necessary) to have a motivator beyond the belief that “I would be making a lot more money once the business takes off.”
This is certainly true for me with SciMetrika. Knowing that I was out to make a difference and that I was bringing something of value has certainly helped me during those periods where I’ve been wondering why I’m working so hard. What continues to motivate me day in and day out is knowing that the project we are working on have the potential of improving the health of many people, that we are creating jobs and advancing the career of many individuals who will become leaders and have a positive impact on others.
“I’m going to be my own boss”
I would hope that anyone would have been their own boss before they start their own business. That is, even if they were working for someone else, they realized that they were a business unit by themselves. I have a hunch that someone who has at least managed their own work, has been in a situation where they have taken initiatives, developed career goals and achieved them has a better chance of being successful in business compared to someone who just saw themselves as being a worker with no control over their career.
So, the first point is that even if you’re working for someone else, you can be your own boss. You are or can be as an individual, a business unit for your employer. That is if you work for Acme Corporation, you are “John Doe Acme,” a wholly-owned subsidiary of Acme Corporation. If you have had little or no success in developing your business unit within Acme Corporation, it will be hard to convince someone how you will be successful when you go on your own.
The second point (“I’m going to be my own boss”) is a bad reason is that you will always have bosses. If you have money from angel investors or venture capitalists (VCs) start your business and they let you stay as the CEO (more often than not, you will be replaced), your bosses are the representatives of the VCs or angels who gave you the money or the board of directors that they’ve put in place. If you were fortunate enough to bootstrap to start the company as I did with SciMetrika, your bosses are your clients and your employees. Why? Simply because no small business owner can operate without keeping in mind how the results of certain actions would be perceived or would impact these key stakeholders. In a real way, they are your boss…
AyiPreneur 