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Going Into Business or Idea?


 
Are you going into business or going into idea?  These are two distinct approaches to entrepreneurship and different as cookies and cabbage.

When a person gets a new idea it’s not unusual for them to get lathered and think about a business. Say you formulated the greatest barbecue casserole (substitute any passion).  Everyone raves. Soon you think, “I should start a business.” 

Entrepreneurship is associated with new ideas. It is a part of it. But making a barbecue casserole and making a business are very different. Our cook knows little about maintaining a business whose ingredients are fluency in accounting, sales work, cash flow, customer management, hiring, inventory turns, paying numerous taxes, maintaining working capital and enjoying the stress and uncertainty of it all.

Understanding all that in the midst of casserole creation is a tall order and why business failures abound. You may be a great cook but burn the bacon as a businessperson. To me, it does not follow that every great idea must automatically be a business to live its passion. It could also mean hiring on somewhere to deploy it. Or license it. Or patent it. Or sell it.

Contrast that with how 90% begin ownership. I call it apprenticeship. A successful real estate agent opens his own brokerage. An engineer hangs a shingle after years as an employee. An experienced welder sets up his own shop. Joe the plumber becomes Joe’s Plumbing Co. Experience and expertise rule. These budding entrepreneurs have both so the market pays them for their skills.

In Memphis some 1,000 business licenses issue yearly to entrepreneurial hopefuls. Most are the apprenticing type using their own money. Newbie idea entrepreneurs gravitate to business incubators but their numbers are quite small, less than 100 a year, and they are heavily subsidized.

In each method generating new ideas, perhaps hundreds, is a constant necessity because solving business problems requires very regular creativity. Un-creative types do not do well with business ownership. But again, I stress the need to understand the skills of business ownership to succeed because you are a businessperson! It is not enough to have a great idea and think that carries you. You go into business and not into idea. You carry the business, it does not carry you.

As a metaphor I compare driving and flying. Say the degree of difficulty of being an employee is equivalent to driving. I assign business ownership as equivalent to flying.  Each requires two very different skill levels and objectives. Nobody can hop in a plane and fly it no matter how enthused. They certainly can train to do so, but they first must acquire the necessary skills so they don’t perish. Same with business ownership.

Both apprenticing entrepreneurs and idea entrepreneurs are about going into business and equally passionate. They share big passion. But passion can be misread which spells trouble. Consider the story of the passionate golfer. He loved golf and played even 36 holes a day. Practiced for hours. Played tournaments. Read about golf.  He lived golf. He soon bought a small golf course feeling it was his dream.

His days were filled cutting grass, fertilizing, keeping manpower busy, stocking the pro shop, organizing tournaments, keeping customers happy, scheduling lessons, keeping sand in the traps and meeting payroll.  But he was not happy. “I never get to play golf,” he complained, and wanted to sell. Why? Because his passion meant playing golf and not managing golf.  Following his real passion meant becoming a golf pro.

The rigors of business ownership call you to judgment on competence no matter your enthusiasm or uniqueness of idea. Ensure you are not behind on needed skills so you don’t become a statistic. The umbrella skills are revenue generation and the management of capital-- human and green. It all flows from those.

Tom Pease is a small business owner of an office equipment dealership called e/Doc Systems, Inc. He has also owned a full-line Kawasaki dealership as well as a document shop. He used 30+ years of experience in owning a business to author two books, including: 'Going Out of Business by Design: Why 70% of Small Businesses Fail' and 'Small Business Survival 101.' He also has published 85 columns in The Memphis Daily News as the Small Business Advisor.

Posted: 10/28/2015 7:30:00 AM | with 0 comments
Filed under: advice, big, business, e/doc, entrepreneurship, ideas, pease, small, systems, tom




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SMALL BUSINESS
Your business may be small, but that doesn't mean that your impact can't be huge! The Greater Memphis Chamber's Small Business Council serves to encourage, support, recognize and be a resource to small- and medium-sized businesses in the Memphis area. Here, our talented panel of contributors will present big ideas that could make a huge difference to your small business. And don't be afraid to ask questions ... no matter how small.

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