Are you one of the Corporate Fatalities from this year’s right-sizing initiative?” Does the idea of running a small company seem idyllic? What could be more exciting than building a business from the ground up? You’ll bootstrap it, call all the shots and make all the rules. You’re certain that your years of corporate expertise will guarantee success in running a small business.
Unfortunately, many of these start-ups can’t stay afloat. They fail because their founders don’t know what they don’t know. The particular demands of small-business life can be quite different than their previous experience in the corporate sector. Would-be entrepreneurs should ask themselves two questions. First, do I have what this takes? And second, does this give me what I want?
Here are some of the harsh realities corporate refugees repeatedly encounter.
You have to be all things to all people
Corporate executives have a seemingly endless supply of support. It’s their prerogative to do what they do best and delegate the rest. When they lack expertise, they can find it down the hall or in the London branch or get it from an outside consultant. Entrepreneurs don’t have those options. Consequently, they can’t afford to be specialists. It’s not enough to be brilliant at product development or sales and marketing if you are barely literate in cash flow. The downside of making all the decisions is that you have to make all the decisions—long into the enterprise. And that requires familiarity with all aspects of your company’s industry and operations.
You’re constantly being distracted by small problems
Entrepreneurs must be proficient at tasks that don’t play to their strengths, and they must do things they once considered beneath them. I’ve seen many new company owners get frustrated that they can’t spend more time on high-level strategy because they have to do things like choose network equipment and decide whether to lease employee parking spaces in a local lot. Most small companies run so leanly that the CEO must be prepared to step in for anyone at any moment, even if that means operating a piece of machinery.
You lose influence and prestige
Performing menial tasks can chip away at your ego, and so can a decline in public recognition. Former executives shouldn’t be surprised when their decisions no longer ripple the markets or the press—but still, many miss the high profile. And because money is always an issue, entrepreneurs must spend considerable time rattling their cups and defending themselves and their decisions to investors and potential investors. Perpetual fund-raising does little to promote self-esteem.
You’re unnervingly vulnerable
Small companies are far more affected than large ones by the loss of a single customer or a sudden spike in oil prices. Minor crises can shake the foundations, and entrepreneurs find their worlds constantly hammered by external forces. You have little control over your time. Executives often view small-company life as a kinder, gentler alternative to 60-hour corporate workweeks. Once in control, these dreamers believe they can design balanced lives for themselves and their employees. But the buck really does stop with you. Uninterrupted vacations and weekends may not have been a part of your past – but guess what – they aren’t going to be a part of your present, either. Entrepreneurs can travel to the mountains of Tibet, and still, the message will reach them: “We’re about to lose the Jamison account. What do we do now?”
So what traits do executives who make it in small business have in common? Versatility, obviously, and resilience. But I’ve observed that the happiest executives turned entrepreneurs are those who can reset their definitions of success—not by lowering their sights but by narrowing their horizons. That means getting satisfaction from a first product run, acceptance by a distributor, or a single customer well served. Executives who consider these victories trivial when compared with the sometimes world-changing influence of their large-company positions should consider other options for their next gig.
By Michael Shapiro, E Group Partners, Inc.
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