Entrepreneurs light on know-how face pitfalls down road

There are a hundred reasons to launch a business. One of the most common is the urge to run your own show.

By Robert Spiegel
Albuquerque Tribune Columnist

This may not be the best reason, for it doesn’t require a sound business plan, and this powerful desire doesn’t land just on those with the necessary business experience. Yet it’s a mighty motivator. The drive to do it yourself can be strong enough to override shortcomings.

Those shortcomings, however, usually come back to haunt the entrepreneur.

The drive that’s often behind the entrepreneurial impulse is the determination to get the heck away from an idiot boss. For many new entrepreneurs, any boss is an idiot.

The disgust the entrepreneur feels for management has little to do with the actual manager. It’s typically a deep-seated distrust of authority.

The drive to run your own show can fuel an entrepreneur’s early struggle to gain the necessary knowledge and experience to run a new company. During those early months and years of an enterprise, the entrepreneur’s desire actually stabilizes the fledgling company like a gyroscope. In the start-up days, the new business owner usually employs the help of small service companies and freelancers rather than building a staff of employees.

These associative relationships come easy to the entrepreneur because these people are business owners themselves and thus require no management.

But if the entrepreneur is successful, sooner or later the business will grow to the point that it needs a staff.

That means managing employees.

To make the transformation from a go-go start-up to a stable company that can deliver products and services in a predictable manner, the entrepreneur will have to leave the freelancers behind and create a permanent staff that can gain, hold and develop corporate knowledge.

If the entrepreneur resists moving to this stage, the company will never quite stabilize and the owner will always be stretched thin. Certainly some business owners decline the invitation to growth that success offers, but when you decline that invitation, you commit yourself to remaining a one-person show and growth opportunities begin to vanish.

This is fine if you’re a consultant or real estate agent, but those are professions, not businesses.

So the entrepreneur who quit a job to launch a business now becomes a staff manager. Remember, this is the character who didn’t like getting bossed around. Freedom was more important. Now that the entrepreneur is faced with building a staff, an ugly little secret pops up.

Both sides of the manager’s desk are exactly the same.

The entrepreneur gets to discover that managing people is not different in character than being managed.

And to make the transition even more painful, the business owner also discovers that growth strangles independence. The free-spirited entrepreneur now has to answer to employees, bank officers, investors and family members who are all beginning to take an interest in the enterprise. If you don’t include these constituencies, you don’t get to grow. If you do include them, you have to serve them. And the collective pressures that come from these stakeholders – as they’re now called – makes that idiot boss seem downright pleasant by comparison.

A good portion of entrepreneurs simply don’t make this bloody transition. Some who do make the transition spend the balance of their business management years longing for those early free-wheeling days.

For the entrepreneurs who are not able or willing to transform their very essence to become a manager, there are few choices. They can become serial entrepreneurs, those adventuresome souls who start companies then sell them off when it’s time to solidify the start-up’s competitive edge into a commodity.

Others retreat back to the freelancing style of a one-person shop.

This turning point is a predictable as it is disturbing. Every successful entrepreneur faces it. And those who launched their companies in retaliation against the authority of an idiot boss have the most trouble making the transition because the awful truth is that the entrepreneur who was fueled by the distrust of authority now has to embody that very same authority and gain the trust of others.

Robert Spiegel is the Albuquerque author of "Net Strategy" (Dearborn), "The Complete Guide to Home Business" (AMACOM) and "The Shoestring Entrepreneur’s Guide to the Best Home-Based Businesses" (St. Martin’s Press). He writes this column on small business every other week. For questions or comments, e-mail him at [email protected].

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