Would The Real Business Owners Please Stand Up?

September 27, 2007

What exactly is a “real business”? The response you’ll usually get to this question will depend upon who you ask.

A director of a big national company might tell you that to build a great business, you need to create an easily duplicated system and roll it out, possibly by franchising the business.

Another person, with equally huge ambitions may tell you to do something similar but float the company on the stock market. This way, you get some cash back for your efforts, and the finances to grow the business further.

Other equally successful business owners would tell you that you’d be completely mad to give up the tiniest fraction of control over your business at all, and that you should build a brand and use it to add more streams of income to your business.

You’ll also meet the people who tell you not to bother employing anyone at all. Because you can automate many of your business processes, and those that can’t be automated can be outsourced. And all this allows you to free up your time without having to officially employ anyone.

And there’s the smaller, family run businesses. They pride themselves on quality and the key staff will tend to be their family as they have a vested interest. They’ll tell you that you can make bigger profit margins, this way, because staffing costs are lower, and you can charge premium prices for quality and reputation.

Then there’s the craftsmen, writers, actors and artists who make money solely from the work they do themselves. If they’re successful, they’ll make a fortune and if they’re not, they’ll make a pittance. But they’ll tell you that you’d be far happier producing meaningful work that you believe in.

And also there’s the tradespeople who work alone. They’ll tell you that it’s much easier to do all the technical work yourself, and employing others is just not worth the hassle. Plus, you’ll earn more money than you would working for an employer in the same industry and you’ll have the freedom to pick and choose your jobs and your working hours.

Of course there are scores of businesses that don’t fit into any of these categories either - including the franchisees, the network marketers, the inventors and the affiliate marketers.

So which one of these is right? Well they’re all right. But the type of business you choose will depend what’s right for you.

For some of you - the idea of being responsible for hundreds of employees may be stomach churning. Whilst others could not bear the thought of a business which relies completely on their own efforts.

Do you know what type of business owner you would like to be? If not, take some time out to think about what you would enjoy doing most, and where you would like your business to be in a few years time. It may sound like a trivial task now, especially if you’re a relatively new business owner. But without knowing where you want to go, you can’t possibly plan how to get there.

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Comments

4 Responses to “Would The Real Business Owners Please Stand Up?”

Ian on September 27th, 2007 3:04 pm

That was really thought-provoking. Mainly because several of those options appeal to me but all for different reasons!

If I had to choose, I’d like to choose the one where I build the brand and retain the control. But alot of that is to do with the unknown.

Venture capitalists, floating or franchising have some appeal, but the horror stories put me off.

I’d like to think organic growth and running the branches of something that you “would have franchised” is something that can be achieved.

But I realise there are dangers in that too. You can lack the capital or support to achieve this alone, and a rival, far better capitalised can beat you to it if you’re not fast enough.

It’s a tricky one indeed!

And I’m not sure any answer you come up with should be set in stone. I think it’s important to plan and set the goal. But also be prepared to change direction.

For example, part-way through a self-financed expansion plan, you may see the writing on the wall as your better capitalised rival steps into your territory.

You may have to go down the VC route - or even give up and sell up to them!

Having never been in that situation, I just don’t know how I’d react to such a scenario if my first choice became threatened.

I would however seek advice. And a second/third opinion.
Asako on September 27th, 2007 3:41 pm

Hello Catherine,

Very good question.

I probably do not mind giving up my financial control, if I could grow the business faster. I would like to have a unique vision and value that will set the direction, disregarding who owns and how many people are involved. Personally, I am such a social person, I have a difficult time to work by my self, I prefer to have a team.
Barbara on September 28th, 2007 8:38 pm

As small business owners, we like having a handful of great employees, whom we pay well, and who can get along with each other. We care about our employees, and treat them like an extended family. We have always been aware that you’ll have employees who will leave for “greener pastures”; and for the ones who have, we always bid them a fond farewell. Over the years, we have also helped some, as they ventured out, on their own.

We are not out to make millions, but concentrate on doing quality work, and keeping the reputation we have built over the years. In slow economic times, we stay busy, when other “fly by nights”, don’t.

In the past we had a lot more employees, but began to feel like we were running an “adult daycare”, therefore, we downsized.

The current structure works for us. It keeps stress to a minimum, and with well trained employees who know what’s expected of them, little time is wasted.

If we had to do it all over again, we would choose the same route. Both my husband and I have worked in the corporate world, and find the politics oftentimes, stunts progress.
cathlawson on September 29th, 2007 10:43 am

Hi Ian - thanks. I agree - organic growth would be great if you could pull it off without being swallowed by the big fish. Mind you, some people deliberately build companies with the intention of being swallowed by competitors!

Thanks Asako - Guy Kawasaki has a similar attitude to you, and it hasn’t done him any harm.

Barbara - it looks like you’re already on the path you enjoy most. I loved the comment about the adult daycare centre. And I too know what it’s like to take on additional employees and discover your business is no better off than when you had fewer. Ian has also been in the same situation.

I didn’t answer the question in the post - but I’m firmly in favour of retaining control and building multiple baskets, as I enjoy learning new things all the time. Also I’ve been in a position where I wasn’t in complete control of a business before and it was unpleasant.