Archive for August, 2012

Launching a Small Business: Motive and Measuring Success

August 4, 2012

In these tough economic times, more people than ever are launching small businesses.

The reasons are many and varied.

We repeatedly hear: “I never worked so hard, but it is for me.”

But, no matter how much effort, the hard data is four out of five small businesses close within the first five years.

Most people view these closed firms as failures.

But if one looks deeper into the numbers there are many reasons some good and some bad for this happening.

  • Small businesses close because the proprietor decides to do something else.
  • He or she is lured away into another opportunity.
  • The business is acquired or merged with another enterprise.
  • Sometimes, businesses are deliberately designed to last a short time.
  • Some of the bad things that happen are not in the control  
  • He or she dies.
  • The economy goes bad.
  • Suppliers fade away.
  • Markets, customer segments change radically in a short space of time.
  • Planned financing dries up or never materializes.
  • The original premise or funding assumptions are flawed.
  • Among other reasons.

Whatever the reason, launching a small business, particularly in this environment, is a formidable undertaking.

What is often overlooked in examining business success or failure is the personal goals of those enterprisers who start and lead a new venture.

This prolonged recession has made many people reevaluate their personal and professional goals.

Often termed “the quality of life” syndrome, many new small business leaders we talk to put this point as a key component in the launch equation.

Yes, a small business leader works longer, has more worries (financial, family life, success factors) but also greater control of his or her life and success.

Recently, a veteran corporate executive shuffled out in another corporate downsizing had the opportunity to go back into corporate life at a position equal to his previous responsibilities.

Instead, he opted for creating his own consulting company.

“The hours are longer, the outcome less sure but in the end it’s my life and I can control more aspects of it.”

Then too, there are women who are finding it easier to blend family and work responsibilities in an independent company rather than toil in an organization.

Or, retired people that are bored, needing to replace reduced nest eggs, or financing other family members that go back to work by starting their own companies.

Based on these factors, one might argue that success needs to be measured more than in dollars and sense but equally as important in the personal rewards a small business leader gets from his or her own enterprise.

There is the saying, success has many fathers but failure is an orphan.

For a small business leader, success comes from driving the enterprise to success and also building a happier life through ones own efforts.