“I sure do miss the support, the accountability, and…oh yeah…the paycheck!”
Those who have worked for or owned a small business for any length of time are used to making it up as they go along and have a very hard time fitting into a corporate culture. Alternatively, those who have been used to thriving in a corporate environment with rules, procedures, and accountability often have a very hard time owning a small business.
As the president of SoCal MasterMinds we have seen an unexpected trend. A substantial percentage of our membership have spent the majority of their careers in big companies, but due to downsizing, mergers, burn out, and other life-altering changes, have ended up owning a franchise or independent small business.
In my recently released third edition of When Friday Isn't Payday: How to Plan, Start, Build, and Manage Your Small Business, I make the claim that most entrepreneurs are woefully underprepared for their venture. They commonly have low aptitude, training, and or experience in such fundamentals as accounting, managing others, marketing, and especially, sales.
These shortcomings are commonly somewhat balanced by passion, youth, low personal overhead, and few deeply ingrained business habits. The 35-year old who quits her job at the bakery to open her own shop is used to the small business environment and has had a chance to study at least some aspects of what it takes to survive.
The big company type who buys a business, a franchise, or starts their own enterprise from scratch is used to training, readily available resources of all kinds, and the need to wear only one or two hats.
Overnight they are thrust into a foreign culture where their new business depends on their ability to find prospects, sell those scary folks, establish proper books, collect receivables, establish procedures to ensure that products and services are delivered above expectations, price appropriately, and keep overheads in line. And all of this is done with the expectation of replacing that corporate paycheck and all the benefits…and soon.
What we are seeing in our MasterMind groups is extreme frustration, often a kind of paralysis, and life savings being wiped out in short order.
Here’s one story:
“When I worked for the company, I was required to make 100 calls per week. I am competitive by nature, so I would always make more calls than my team members. Those calls would result in five appointments, and I would close three. I was always a top producer.
“Now that I’m on my own, I have no pressure to make the calls, there is no competitive environment, and so I putz around with nonsense rather than get on the phone. I am far less productive now than I was.”
“I opened my practice after leaving a large firm. I am now faced with finding clients. I have never marketed anything and have no training in sales. Friends tell me that I need to go knock on doors. I’m petrified by that idea. I hate salespeople. Why would I want to be one?”
“I’m having a pretty good year, or so it seems. My customers seem to like what we’re offering. But about 70% of my income is from one client, and they are running about 90 days on my invoices. They now owe me $30,000. I don’t want to complain. They might stop doing business with me. Then what?”
The list of examples could go on for another 20 pages. In fact, I’ve decided to write a future book on this subject. But for today, what can these folks do?
- Become an expert in each of the disciplines that are problematic. Read When Friday Isn't Payday: How to Plan, Start, Build, and Manage Your Small Business, and other books that teach the basic principles of running a small enterprise. Then find book, online tutorials, YouTube videos, college classes, or other training to help go deeper into each area as needed.
- In particular, become an expert salesperson. There are hundreds of resources that can help. You will need to either sell or find someone to sell for you or you have almost no chance of success. In the beginning, it is usually a much better idea for you to do the selling. In this way you learn what is needed to get and keep great clients.
- Join a MasterMind group where you can get the expert opinion from peers who have done it before and understand what you’re going through. You also get the missing accountability.
- It can’t be done in 40 hours. You will need to work as many hours as necessary during the first few years. You won’t make your old paycheck until you have put in the sweat equity. It could take 3-5 years or more.
- If you are a franchise, lean heavily on the franchise management to help you with areas where you are weak. While it may sometimes be hard to believe, the do have a vested interest in your success. The original fee you paid was very nice for them, but it is the ongoing revenue stream they count on to actually keep them in business.
- If your finances are getting short, cut back every unnecessary expense until you have positive cash flow.
- A business manager or coach may be able to help you in those areas where you are weak. Make sure you see a clear ROI from their services.