string(8) "Tom Dorr"

The hidden truths of small business ownership

The hidden truths of small business ownership

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Filed on 08. Feb, 2011 in Contributors

In Memoriam: Aysa Saadat, 1953-2011, IHOP Franchise owner, entrepreneur, family man and mentor

Owning a business is challenging, more so than is considered or understood. One may value the opportunity to be their own boss or to have the freedom to create results. Often the compelling parts of owning a business trump the many challenges.

It’s often taboo to discuss the many misconceptions about owning a small business. So much so that these challenges often aren’t known even by spouses and trusted advisors. Some of these hidden truths are bearable and with hard work and perseverance can be overcome. Some truths can’t be overcome and cause the demise of the business, layoffs of valued employees, bankruptcy, embarrassment and hardship.

I have been advising businesses in Whatcom County for more than 14 years and working with thousands of business owners. It never ceases to amaze me how few people really understand the challenges of owning a small business and their value to our community. In an effort for increased awareness and appreciation of those business owners, I share with you some of the hidden truths of small business ownership.

1. At the CEV, we constantly remind owners to take care of themselves both physically and mentally. Owners often do not put themselves first.

2. The highest paid person in a business is rarely the owner. Many people think owners take a lot of money out of the businesses and live the high life. I know many business owners that can’t afford to pay themselves, have to take second jobs, and have to borrow money from friends and family just to make ends meet.

3. Owners work long hours and often get paid less than minimum wage. Owners aren’t rich.

4. Owners really do care about their employees, some even as if they were family.

5. Owners stay awake at night worrying about how to pay their bills, collect accounts receivables, and make payroll or the bank loan. They rarely think about how to make enough money to pay themselves until everyone else is taken care of.

6. Owners want happy, healthy employees. Owners want their employees to have access to health care. Offering health care has become a financial impediment for many owners and not being able to offer affordable health care is a burden many owners live with.

7. Owners don’t have time to be involved in politics, though they have opinions about how our government should be run.

8. Franchise owners are not independent business owners; they have to answer every day to corporate executives that tell them what they can and can’t do. Often franchise owners have to deal with the threat of lawsuits or loss of their franchise for failure to comply with franchise policies.

9. Owners collect the taxes for our government. Taxes include: Business and Occupation, Labor and Industries, Employment Security, Social Security, Department of Revenue, IRS, and miscellaneous others. Trying to just keep track of all the taxes is one of the challenges. Having the cash to pay them on a timely basis is even more challenging. Owners are often personally liable for tax debts. Failure to stay current with taxes yields penalties, interest on past due amounts and the threat of lawsuits and business closure.

10. Owners keep their problems inside and to themselves.

11. Owners don’t share all their problems with anyone, including their trusted advisors and spouses.

12. Owners see the glass as half-full. They are optimistic that tomorrow will be better, more customers will come in, the bank will approve an extension on their loan, that sales will pick up, that employees will be more productive and profits will improve.

13. Owners don’t see failure as an option until the bitter end.

14. Owners are embarrassed when they are struggling, can’t pay suppliers, the bank or employees that they work with every day. Owners take it personally when the business isn’t profitable or has cash flow problems.

15. Owners have feelings. Owners are hurt when they are criticized in the paper, social networks, blogs, and by word of mouth.  Rarely does anyone have all the information about the struggles and challenges owners go through.

16. Owners don’t know who to ask for support sometimes. Ironically being a business owner is a lonely job.

17. Owners hang onto the idea that got them started in the first place: the passion of owning their own business and controlling their own destiny, their future.

18. Owners are risk takers. They are willing to mortgage their houses, personally guarantee loans, and tap into their retirement savings and inheritance to pursue a vision, a passion. Rarely is the return on investment equal to the risk, but businesses still start up and thrive, driven by the owner’s passion and optimism.

19. Franchise owners are locally owned, locally operated and deserve our patronage as much as independent businesses. Discriminating against them is hurtful, divisive and just plain wrong.

20. For many owners, they are their business. There is little distinction between the two for them.  They often live, breathe and sleep their companies. Their identity is closely tied to the business.

I have learned these hidden truths after many years of working with entrepreneurs and being a business owner myself. I am honored to support many of our business owners in overcoming their obstacles and actualizing their dreams. It is hard work; there isn’t a formula that says if you do this you’ll make a million dollars.

Business owners help create our sense of place, that which we call Whatcom County, our home.  Consider what this place would be without the small business owners, without these risk takers.

The next time you patronize one of our businesses consider what it really takes to operate that business; inventory management and all employees that need managing and motivating to make the business run. Think of the challenges owners may be facing. Think of the smile and hello that greeted you and how important your business is to that owner.

I am humbled to share in the trials and tribulations that our clients share with us. I hear the challenges and hidden truths of business ownership every day. I feel their pain when they struggle and celebrate when they succeed. Every time a business closes, I know there is an owner grieving.

Whatcom County, I challenge you to give our businesses the best chance to succeed, to help them overcome hardships and create a business-friendly community. To all the business owners: Thank you for all you do. It is appreciated.

Tom Dorr is the executive director of the Center for Economic Vitality and a regular contributor to the opinion section of The Bellingham Business Journal.
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bGk+PHN0cm9uZz53b29fc2xpZGVyX2hlYWRpbmc8L3N0cm9uZz4gLSBSZWNlbnQgbmV3czwvbGk+PGxpPjxzdHJvbmc+d29vX3RoZW1lbmFtZTwvc3Ryb25nPiAtIFRoZSBKb3VybmFsPC9saT48L3VsPg==