The hidden truths of small business ownership

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.

11 thoughts on “The hidden truths of small business ownership

  1. Tom, you are so right on all counts. I always appreciated your excellent counsel as we were growing the Colophon Cafe. It IS hard owning your own business and everything you mentioned is true. Aysa always greeted me at IHOP for breakfast and we talked about just how much work restaurants are. He envied that I had sold it and didn’t have that stress anymore. Business can be exhilarating and it can also totally wear you out! I will miss him and his welcoming smile. Taimi Dunn Gorman

  2. Thanks, Tom. I appreciate your saying what many business owners wish they could explain to those around them. I think your point about franchisees being local small business owners is especially important for us to remember here in Bellingham.

  3. Tom, this is a well written and extremely accurate article. Working in commercial real estate, I frequently see the same truths that you have described. We certainly find that many owners keep everything to themselves. It is typically the case that businesses appear to be doing well on the surface, but are struggling more than people realize. I believe your findings to be especially true in the restaurant industry.
    This would be an excellent article to share with some of our lawmakers.

  4. Tom,
    Thank you for your sensitive, thoughtful article. Restaurants ARE hard, and being a franchisee has its drawbacks, as well as its real benefits, especially in accounting, marketing and oversight. We were so fortunate to take over the Sunset Port of Subs and expand to three more Bellingham/Mt. Vernon stores because the local economy was doing really well, and we had great, supportive customers (like you, Tom!) and a cadre of wonderful employees. It was a thrilling ride for many years, but the truth is that bigger is not better- it’s tons more work that never stops. It wears business owners down, does not improve family life, and exposes our weaknesses as well as allow us to use our strengths. Sometimes, it felt quite lonely as we tried to “keep up a good front” when so many things were going wrong and we were too proud to go get help or accept good advice. That being said, we do need to support our local franchises, if the product and services are worth it, and if they’re not, don’t be afraid to let the owner know what’s going on. I bless the customers who told me my employee was sitting on the back counter talking instead of working. Feedback is critical to the local franchise owner who is trying so hard to “make it.” Benita Bowen

  5. Tom,
    Thank you for your sensitive, thoughtful article. Restaurants ARE hard, and being a franchisee has its drawbacks, as well as its real benefits, especially in accounting, marketing and oversight. We were so fortunate to take over the Sunset Port of Subs and expand to three more Bellingham/Mt. Vernon stores because the local economy was doing really well, and we had great, supportive customers (like you, Tom!) and a cadre of wonderful employees. It was a thrilling ride for many years, but the truth is that bigger is not better- it’s tons more work that never stops. It wears business owners down, does not improve family life, and exposes our weaknesses as well as allow us to use our strengths. Sometimes, it felt quite lonely as we tried to “keep up a good front” when so many things were going wrong and we were too proud to go get help or accept good advice. That being said, we do need to support our local franchises, if the product and services are worth it, and if they’re not, don’t be afraid to let the owner know what’s going on. I bless the customers who told me my employee was sitting on the back counter talking instead of working. Feedback is critical to the local franchise owner who is trying so hard to “make it.” Benita Bowen

  6. Thank you Tom, I want to copy this and send it to all of my relatives who think my life is so easy since I get to be my own boss.
    Eileen Gribble
    Yes massages

  7. Thanks so much for this article! Well done! We thought is was just us that went thru these struggles. It is good to know that we are not the only ones!

  8. I REALLY appreciate your words on business ownership. I realized even as a business owner, I was guilty of discounting franchisees as being local small business owners. What an eye opener, thank you. Rachel Riggs

  9. I REALLY appreciate your words on business ownership. I realized even as a business owner, I was guilty of discounting franchisees as being local small business owners. What an eye opener, thank you. Rachel Riggs

  10. I’m happy to see this blog entry revived in your May newsletter, for all the good reasons listed below. I’ll just add a comment about the tribute: here’s to Aysa. Visits to IHOP were a family tradition and it was nice to be recognized as a regular customer, to have him comment on my son’s constant change and development and to talk about business. He was a good guy and I miss him.

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