Starting and running a small business can be a blessing and a curse. The dream can become a nightmare. Yet there can be great rewards too.
There are so many things that can get in the way of running and owning a successful business. You hear people talk about “cash is king” or growing the sales pipeline, closing more deals, making payroll, and creating satisfied customers.
While these are all very significant issues for a business owner there is one thing that is even bigger than all of these put together. Do you have any idea what it may be?
Wait for it…..
Your ego. Yep. Good old fashioned pride.
Let me get straight to the point.
Small Business Owner’s Fear
Letting your pride or ego get in the way can be the exit ramp to disaster. On one hand, entrepreneurs must be fearless. They have to start with a whole lot of courage. For that, I applaud you.
Think about it. You hear stories of people quitting their day job to start a business. That takes guts and sheer willpower.
However, that same dogged determination can become the owner’s death sentence too.
The Paradox of Success
Many years ago I wrote a piece I call the “Paradox of Success.” I got this idea after watching dozens of my banking clients go through similar situations. It goes like this.
For those of you who have actually ventured out to start your own company, you understand the intense effort and tremendous satisfaction you achieve by watching the company grow.
Those first few profit dollars start to roll in. Real profit, free and clear. No debt, no more obligations to pay off, pure, real profit. For all the planning, sweat equity, real equity investment, and down-right hard work, you eventually arrive at the threshold of the very thing you set out to accomplish…. SUCCESS!
Ah, but beware. The very thing you strive so hard to achieve, that is your company’s success, can start the downward spiral to eventual destruction. Perhaps even the infamous “implosion” of the company. That is the phenomenon called the Paradox of Success. In other words, success brings failure. How can that be? Let’s explore the full timeline.
First the Beginnings
As was described, the founder sets out to open his or her own business. Perhaps it is a sole proprietor, maybe “Mom and Pop”. It can even be a couple of good friends who decide to start something together. The actual legal structure does not particularly matter at this point.
The focus is on getting going and having that first order come through the door. Days and weeks go by. The founder(s) perform all the daily chores….everything! Sales, marketing, bookkeeping, systems, purchasing, supplies, advertising, contracts, payables, receivables, answering phones, sweeping floors, cleaning the bathrooms…everything!
Next, business starts to grow. The word is out. Your business has something people want and need. Your service ideas are working very well. Customers like what you have. Word of mouth even starts to grow. You are getting business from sources you had not really thought about at the start.
Finally, the business becomes more than you and your partner can handle. You decide to hire your first employees. This becomes turning point number one. New employees do not bring the same levels of dedication, commitment, and energy you had when you started the business. Your ideas are not their ideas. You must start to train and coach to be sure the new guys on the bus are fully on board.
Moving Further Toward Success
The service levels you created and nurtured must be sustained. The principles on which you founded the business must be reinforced. There needs to be a feedback process and a monitoring mechanism to be sure your values and principles are being followed.
Almost daily you feel the tug of contention for your time. The time spent to make the direct business contacts you enjoyed making at the start must now be juggled with the effort to resolve internal issues. Perhaps you add a few more hours to the week. Certain tensions become more frequent.
With employees present, interpersonal matters start to creep in. Sally doesn’t like Susie. Bob and Ted argue over sports teams and their preference in cars they drive. None of this is contributing the business. The founders become referees. Hostilities can even boil over when customers are present. A lack of leadership or even a momentary lapse of leadership can become significant. Who can handle these things?
Phase Two Begins – Leadership
Then, mid-managers are hired or appointed. Surely the owners can rely upon other seasoned professionals to handle the staff issues and keep the ship sailing. Now a new layer is created.
For all the potential good that can be accomplished here, there comes a trade-off. Again, the founders’ values have to be enforced, promoted, espoused, heralded, and cheered about.
Can the mid-manages carry the same flag? All the while the growth in volume creates a strain on the original infrastructure. Are the same tools and equipment that were used to open the business still effective? Have systems started to suffer? This can include everything from the high end network servers to the staplers.
And more importantly, who is truly watching over these areas. Have the partners brought the right skills on their own to address all the issues? Accountability for all aspects of business growth becomes more meaningful. If cash and checks are being handled, controls must be implemented. Growth across state lines adds to the compliance and regulatory burden. Specialists have to be added to the mix like legal counsel, accountants, IT professionals, etc.
The False Security
The very essentials that can help grow and expand the business become challenges to the owners. Volumes and profits continue to rise. A false sense of security here can be deadly. A failure to admit the changes that are happening underneath and any inability to properly respond to those changes can, at any point hereafter, start the spin downward.
Really this stage represents the first major turning point for the founders. The biggest and most honest question that can be asked is “Am I capable of keeping this going or do I need senior management help?”
All too often ego may enter in and prevent the good hard look at the man (or woman) in the mirror. True Leaders with a solid track record behind them have been the first to ask this question and work with the right answer. And they do it with almost perfect timing.
Yet for the owner suffering a big ego, the right questions never get asked. The talk with the person in the mirror sounds more like this…
“Wow, things seem to be ramping up. You really did it.”
“Yes, I did.”
“It feels different now, but that’s nothing to worry about.”
“Just keep it going. We’ll be fine.”
Then one day the wheels fall off. The big accounts start to go elsewhere. Your pricing gets squeezed and you have no answer. The market shifts out from under you and you missed the warning signs.
Or worse yet, your team abandons you because they hate working with you. The few customers you have left eventually leave because the service is terrible.
It happens in all kinds of business. Every day. The tipping point is where the owner’s ego gets bigger than even the greatest of success.
A Cautionary Tale for Small Business?
Maybe so. But it doesn’t have to be. You can get help. You should get help. Is today the day? Business advisors or coaches can help you make sense of the new levels of growth and prosperity. They can help you see you way to even higher levels of success.
But you have to make the call. Don’t let ego stop you.