More than once, a successful entrepreneur has told me: “If I knew how hard it was going to be to start a business I would have never done it.” Consequently, when aspiring entrepreneurs ask what the key thing is when starting a company, I don’t tell them how hard it is, but do tell them that there is one big decision they need to make right up front: decide whether to “be a business” or “run a business.”
To be a business doesn’t mean you work by yourself, but it does lend itself to those who want to be in control, be hands-on and involved in day-to-day tasks. Most importantly, being a business is for those who get great satisfaction from serving customers and seek a great quality of life.
When my friend Raymond Ost decided to leave his executive chef position at the award-winning Julien Restaurant at Le Meridien Boston to start his own restaurant, he made a conscious decision to be a business. Unlike the $10 million catering and hospitality operation he ran at Le Meridien, he created a business that allowed him to do what he loved most: be a chef. Raymond named his new restaurant Sandrine’s after his daughter; created menus influenced by the Alsatian food of his youth and together, with a partner and a staff of almost 20 people, opened his new restaurant to great fanfare. More than 10 years later Sandrine’s is still a big success. Raymond still gets up at 4:30 a.m. to go to market and personally choose the produce for the restaurant and he is still winning awards, most recently knighted by the French government with the chevalier medal The Ordre National du Mérite Agricole. That, to me, truly represents what being a business is all about.
People who choose to be a business enjoy making the key decisions, and ultimately running the business the way they like to work. There is always a little creative tension in these businesses between the desire to grow revenue and a desire to maintain a respectable quality of life. The business owner’s desire to be in charge becomes the gating factor to growth. Understanding this tradeoff up front and getting comfortable with it can really help both the entrepreneur and any employees who join the business. Not making this decision before launching the business can mean chasing lots of opportunities that ultimately, even when successful, make you miserable.
For the entrepreneur who chooses to run a business, there are an equal number of trade-offs. Like a child who thinks making money is as easy as going to the ATM machine, we have all had the naïve notion when we were young that being the boss is easy because the boss can always hire someone to do all the jobs they hate. Unfortunately, just the opposite is true. Deciding to run a business means making a big commitment to building and motivating a team, in short, being a manager first. It often means doing all the dirty jobs, especially when launching a new business. I think the most successful attributes for someone who wants to run a business are the enjoyment of managing people, the ability to be strategic and building a strong leadership team. Those who run a business get the greatest satisfaction from growing it and are willing to do anything to serve the business first, even if it means putting the business’s needs before their own.
Tom Litle, CEO at Litle & Co., who recently sold his 12-year-old payment processing company for $361 million, told me recently: “it took many years through trial and error to build a great management team. Understanding the potential of a business and then putting a team together to fulfill that potential is not easy.”
Tom is always eager to give the lion share of the credit for the company’s success to his father Tim Litle, who is a proven entrepreneur, technologist, and a recognized thought leader in the world of payment processing and direct marketing. Though Tom’s father lead the development of the technology platform when Tom stepped into the business, he first focused on helping the sales team close business and the company skyrocketed to #1 on the Inc. 500 list, he also worked to bring costs in line, and all along he remained obsessed with becoming a better manager and building a terrific team. Best of all, his dad got to focus on the technology while he made sure that all the other parts of the business came together.
Although building a business is rewarding, Tom had a lot of sleepless nights dealing with personnel issues, managing the expectations that come from meteoric growth, and dealing with all kinds of legal and legislative challenges facing the industry as a whole.
The good news is that whether you choose to be a business or run a business you can always change your mind. In 1995 I started a $25 million CRM consulting business with a clear intent to run a business. After years of leading and managing consulting firms, I decided to open a small shop and be a business so I could get back to what I love most, which is solving sales and marketing problems. After five years, I was brought in to help turnaround an online insurance comparison shopping site and ended up running a team of 100 people. I fell in love with the possibilities of online comparison shopping and realized I missed managing a large team. Now I’m running a business that makes it easy, fast and free for small and medium businesses to finance the equipment they need to serve customers and grow.
So whether you choose to be a business or run a business, both can lead to a very successful career. But there are clear pathways involved with each route and it’s wise to know up front which way you want to go. Here are some questions you should ask yourself to help determine that answer:
Why are you starting the business?
- To be the boss
- To meet a big need in the market place
- To establish the perfect job
- To build a big business
What kind of work gives you the greatest pleasure?
- Practicing your craft
- Administration and management
- Serving customers
What kind of work do dislike?
- Staff issues
- Customer issues
- Administration and paperwork
What are you good at? There are thousands of heartbreak stories where entrepreneurs build a business and become increasingly miserable as they try to avoid making trade-off decisions. Ultimately these businesses collapse for a variety of reasons such as the entrepreneur becomes stretched too thin or because top talent exits the business for jobs where they can grow and have more authority. Building any business has its fair share of obstacles, but by really delving into your motivation from the get-go and where your passion lies, you can try and circumvent some of these problems before they even arise.
Being a business or running a business is a question that all entrepreneurs should ask themselves because finding the answer can mean the difference between success and failure.
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