The Owner's Manual for Small Business. Rhonda Abrams

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alt="image" target="_blank" rel="nofollow" href="#fb3_img_img_1eb7958b-d06b-5108-816a-7c55a6e2bb4f.png"/> Cash. Every entrepreneur wants to make money. Perhaps it’s just enough money to provide a decent income; perhaps it’s so much money you can buy a jet. How much you want or need affects how you’ll develop your business. Will you need investors and when? Will you sacrifice control to grow the business quickly?

      Usually, control is the primary motivator for entrepreneurs. Control can mean the ability to make decisions, to directly influence the success of the company, or even to have the flexibility of choosing what hours and days to work. Others are motivated by the desire to create something new, whether art or software. My personal top motivator is “challenge,” so I’ve developed a business that is always exposing me to new industries and management problems. Otherwise, I’d be bored. Those who are only motivated by cash often fail.

Do You Have What It Takes?

      The cover story of a major business magazine carried the headline: “Do you have what it takes to start a business?” In the story, grinning entrepreneurs answered that question: “You’ve got to have a maniacal mind-set;” “I don’t need an excessive amount of sleep;” “The odds are, most times, you fail.”

      If being in business means you have to be an obsessive insomniac doomed to failure, then why are these people smiling?

      The fact is, that magazine got it wrong: you don’t have to be a compulsive workaholic to start a business. Millions of entrepreneurs run successful enterprises, and, thankfully, they’re not all obsessed solely with business. Most businesspeople find time for many other aspects to their lives—family, community, hobbies, religion, sports.

      The multitude of successful small businesses might not make it to the Top 10, or even Top 100, list of “best companies,” but those lists focus almost exclusively on financial factors.

      But money is not what motivates most entrepreneurs. What do most small business owners care about?

      

Creating something worthwhile. This doesn’t have to be a cure for cancer. It can be a new tool, a new computer program, a new widget that makes doing a job in your industry easier, or a service that helps people improve their lives.

      

Using a talent. Most people aren’t going to establish ballet companies because they’re amazing dancers, but lots of people start restaurants because they’re terrific cooks, go into the accessory business because they love to design jewelry, or make and sell custom cabinets because they’re great at woodworking.

      

Having more time for family. In today’s world, it’s hard to balance the desire or need to spend time with your family with most jobs. But by starting your own business, you may have more flexibility, so you can take the afternoon off to chaperone your daughter’s Girl Scout troop or take your aging father to the doctor.

      

Being your own boss. Many people start businesses because they get tired of seeing their supervisors make stupid decisions or of working in companies where they have little or no influence. Things may not always work out when you are your own boss, but at least you know the mistakes that affect your life are your own.

      

Creating jobs. If you want to make the world a better place, one of the things you can do is create good jobs for others. There’s justifiable pride in building a business that’s big enough to give other people work so they can feed their families, go to school, or pay their rent. And when you treat them fairly and create a positive work environment, you’ve truly improved the world.

       You don’t need to be a compulsive workaholic to start a business.

      

Doing a better job. Nothing is more frustrating than working for a company that’s doing a lousy job. Knowing that you could serve the market better—improve the product, give better service, cut costs, treat employees more fairly—is a great motivator for starting your own company.

      

Bringing your dog with you to work. This isn’t only about dogs, it’s about having more control over your working conditions. It could be the ability to work from home, to wear casual clothes every day, or not to commute long distances. But having my dog with me was definitely one of my motives when I started my business.

      In fact, that business magazine was out of touch with the reality of American entrepreneurship. Few entrepreneurs want to—or need to—be obsessive insomniacs to succeed in business. What successful owners of small companies have in common is that they’re motivated, self-directed, willing to take measured risks, determined, and optimistic.

      If you have what it takes, you may not end up on the cover of a business magazine. But you may end up with the best small company in America: the one that meets your needs and reflects your values.

Your Chance of Success

      After giving it careful consideration, you’ve finally decided to start your own business. But when you excitedly announce your decision at a family gathering, your brother-in-law Sheldon points his finger at you and says in his most ominous voice, “Fifty percent of all businesses fail in the first five years. Get a job.”

      You’ve got far better odds of succeeding in business than is commonly believed. That’s because the statistics you’ll hear about business failures almost always mean business closings. In many cases, the business hasn’t failed, just changed.

      For instance, I had my own—successful—consulting practice for many years. Like most sole proprietors, I reported my business income on my personal income tax return, using my own social security number. When I incorporated, the business got its own tax identification number, and I stopped filing a “Schedule C” on my personal tax return. That means my first business probably shows up in statistics as a business “death” even though it was actually getting larger.

      To paraphrase Mark Twain, “Rumors of my death are greatly exaggerated.”

      Overwhelmingly, businesses don’t die or fail; the owners close them for reasons unrelated to whether the business is making money.

      Take restaurants, for instance. Restaurants have a notoriously high “failure” rate. You’ll often hear that 90% of restaurants fail in the first year.

      In a study in Columbus, Ohio, Professor H.G. Parsa of Ohio State University tracked new restaurants from 1996–1999. In the first year, 26% closed. Another 19% closed the second year, and 14% the third. Collectively, 59% of new restaurants closed those three years.

       Businesses typically don’t die or fail; owners close them for reasons unrelated to money.

      Now, even though these numbers are much better than the 90% failure rate bandied about, it’s not particularly heartening to know that six out of ten restaurants closed in three years.

      However,

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