2000 bill corbin - entrepreneurial life - are you cut out to be an entrepreneur

Entrepreneurial Life:

Are You Cut Out For It?

by Bill Corbin

Corbin Group Publishinghttp://www.CorbinGroup.com

©2000 by Bill Corbin

All rights reserved. Except for brief review excerpts or quotations, nopart of this book may be reproduced in any form without written

consent from the author or an authorized representative ofCorbinGroup.com

Printed and bound in USAby UN Printing, Division of UN Communications, Inc.

Cover Design: Tim Tobias

ISBN #: 189345602-1

First Printing: March 2000

For Information:Bill Corbin – CorbinGroup.com.

1429 Chase Court – Carmel, IN 46032 – 317 800 222 0590 x330http://www.CorbinGroup.com

email: [email protected]

LEGAL DISCLAIMERAn entrepreneur is a risk taker. The purpose of this book is to help the readertoward a positive outcome. However, there are no words or ideas in this book

powerful enough to guarantee success. Therefore, Bill Corbin accepts nopersonal liability should your business results be unsatisfactory (nor will he

claim any credit for your success).

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Table of Contents

Entrepreneurial Life: Are You Cut out for It?

Introduction...................................................................................1This is a book that presents the good, the bad and the ugly ofentrepreneurial life. No sugarcoating. No get-rich-quicknonsense. The “15 Questions” asked in this book will challengeyou to look deep inside for the ingredients of entrepreneurialcontentment and success. (Author credentials are presented.)

Chapter 1: Can You Come Up with

an Idea “Good Enough”?.........................................................7Is your idea good enough? Will you subject it to criticalobjective analysis? Have you thought through the multipleavenues to start-up? Most importantly, are you committedenough to start?

Chapter 2: Do You Have the Right

People Support?... .....................................................................21Do you have the necessary moral/emotional support? Can youdevelop the operational support you’ll need? What about apartnership as a means of adding support—moral, operationalor both?

Chapter 3: Will You Risk and Can You

Deal With Failure? ...................................................................29The most fundamental question facing a prospectiveentrepreneur is simply this: Will you risk, and could you dealwith failure? The answer requires family discussion and intenseintrospection. It is a crucial issue.

E-Lifestyle for You?

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Chapter 4: Can You Face Fear? ...........................................33

Failure is an event. Fear can be an ongoing companion alongthe entrepreneurial journey. The ability to face fear and operateeffectively through it is vital.

Chapter 5: Patience, Perseverance, &

Willingness to Sacrifice...........................................................36

A growing business makes ongoing demands on your time,

energy and money. Will you wait, persevere and sacrifice as

necessary if your success comes more slowly than expected?

Chapter 6: Can You Take Bitter Disappointment?......42

Can you take bitter disappointment? The potential sources aremultiple: poor results, customer defection, employee or partnerbehavior. And disappointments sometimes come in clusters. Theentrepreneur must absorb and bounce back.

Chapter 7: Can You Be a Leader?.......................................46

Leadership does not require General Patton’s toughness, butinvolves multiple elements—among them are vision and theability to articulate and communicate your vision. You must alsobe a disciplinarian, teacher, coach and mediator.

Chapter 8: Can You Sell? ........................................................55

Even if you don’t personally sell to customers, an entrepreneurmust become skilled at leadership selling. This involves effectivecommunication and persuasion with employees, prospectiveemployees, financiers and others.

Table of Contents

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Chapter 9: Are You Basically Honest? ..............................60

Less-than-honest entrepreneurs can make businesses work, butthere are multiple risks including the possibility of legalrepercussions. In the long run, a dishonest entrepreneur likelycreates a culture of dishonesty that will be destructive.

Chapter 10: Can You Analyze Objectively?....................65

Can you, or will you learn, to carefully and objectively analyzeimportant issues? Many of an entrepreneur’s natural traits runcounter to careful analysis. A process must be developed forthorough, timely, numerical (when possible) analysis.

Chapter 11: Are You Decisive? .............................................72

The entrepreneurial experience may include nearly non-stopdecision-making. It is necessary to prioritize, analyze and reachdecisions within the relevant time window. Both attitude andprocess are important elements of decision-making.

Chapter 12: Do You Have Personal Discipline?.............79

Personal discipline is necessary as the entrepreneur invests thetime and energy necessary for effective launch. Organizationaldiscipline results from the entrepreneur defining and enforcingthe operational system necessary for smooth operation.

Chapter 13: Can You Delegate?............................................84

Can you delegate responsibility and authority? Delegating isdefinitely optional but has enormous impact on growth potentialand the entrepreneur’s life and lifestyle.


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Chapter 14: Are You Flexible ................................................91

Flexibility is not a requirement to start. It is likely a requirementto survive, involving willingness to adapt to changes in yourindustry or in the general marketplace. Flexibility along withobjective analysis and decision-making are the three-leggedstool of preparation for the future.

Chapter 15: Are You Willing to Learn and Grow?......96

As the business grows, the entrepreneur must grow. It is vital to

be an ongoing student on subjects from technology to trends

affecting the business. It is important to learn and grow to

overcome personal weaknesses.

Chapter 16: Why It Can Be Well Worth The Trip.... 101

The fruits of a successful entrepreneurial lifestyle.

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Introduction

The fact you are reading these words likely placesyou in one of three categories:

1. A person thinking about becoming anentrepreneur and wondering whether it's a goodidea; 2. A person whose loved one is thinking aboutbecoming an entrepreneur and you're wonderingwhether it's a good idea;3. A person who has made the entrepreneurialplunge and is wondering whether to hang tough ortry to find a real job.

I promise this book will speak to you; and it willspeak in an unusual way. Too much of entrepreneurialliterature is either get-rich-quick nonsense or sugarcoateddescription of the good life you’ll find as a business owner.

Anyone seeking fast and easy wealth shouldprobably use this book as fireplace kindling. Overnightsuccess visits now and then, but it is rare. After 25+ yearsof observation, I’m convinced that get-rich-quick schemesare designed to let the original schemer get quickly rich…and folks like you and me provide the cash. So I’m abeliever that entrepreneurial success comes from intenseeffort over a considerable period of time.

I can also state, from the trenches, that theentrepreneurial life isn’t all fun, freedom, glitz andglamour. I suppose there are a few charmed souls who start


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a business and experience smooth progress all the way tothe Promised Land. I'd confidently estimate that for everycharmed soul there are 100 people like me who havestruggled, fallen, struggled some more and (hopefully)eventually made it work. A book on the entrepreneuriallifestyle does you no favors if it sugarcoats the reality.

So here’s my promise. This book is reality based. Itwill challenge you. It will paint a realistic picture of theentrepreneurial experience, and it will ask you hardquestions about your capability, commitment andwillingness to learn and grow. Because it asks you toexamine core personal issues, this book might occasionallyremind you of the oft-told exchange between theparishioner and pastor: “I loved the first part of yoursermon, Reverend, but in that second part you reallystarted meddling.” It is tough duty to look inside andhonestly assess strengths and weaknesses. But it is crucial.So remember, I’m on your side. The purpose of this book isto help you make a good decision about the entrepreneuriallife. If you look at each of my challenges and decide toplow on, that’s wonderful. I welcome you as a fellowknight at the entrepreneurial roundtable. If the points in thisbook cause you to cancel or delay your launch, it’s likelythe correct decision. If you are truly ready to be anentrepreneur, nothing I can say here will dissuade you.

The Corbin Credentials

A book like this should only be written by a personwho knows of what he speaks. Here is a brief resume that Ipresent as evidence:

Intro

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1962–1968: A great deal of “higher” educationincluding a BSIE and MBA[Note: Formal education is a good thing, but you won’thear any more about it in this book. The community offailed entrepreneurs is full of MBAs. There are millionairehigh-school dropouts. A hunger for continuing increasedknowledge seems important. A wall full of degrees is A-OK,but doesn’t seem to be a crucial ingredient.]

1968–1971: Lower to maybe middle management,General Motors

1971–1972: Middle management, RCA1973–1974: Founder, Concepts 4, Inc. Failed

miserably, including loss of home and all personal wealth[In chapter 1, we’ll talk about why Concepts 4 failed. Forthe purpose of my credentials statement, suffice it to saythat Bill Corbin learned the hard way that America is aland where a person can dream a dream, invest his timeand money, and absolutely lose his shirt. In hindsight, thiswas an educational experience, but a major goal of thisbook is to help you avoid education by dismal failure.]

1974–1988: President, Unified Neighbors, Inc., alocalized consumer magazine spun from $100 of investedcapital that grew nicely and was sold profitably

1977–present: Owner, UN Printing & Mailing,originally developed to process the magazine but later spuninto an independent business called UN Communications,Inc., with revenue now in excess of $3.5 million

1984–1996: Co-founder and husband of thepresident of Carmel Publishing, Inc. Carmel Publishingdeveloped The Highflyer, a local magazine concept sold


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very profitably to Thomson Newspapers of Toronto andStamford, CT[The successful operation of Carmel Publishing by JanetCorbin brings important depth to this book. CarmelPublishing was a classic woman-operated business thatdeveloped an excellent operating system. Its primaryproduct was The Highflyer, a community magazine. It alsobecame a skilled consultant in direct mail projects.]

Miscellaneous:

1988, co-founder, Bereavement Publishing1993, founder, Beckett-Highland Publishing and co-

author The EDGE Resume and Job Search Strategy, still innational distribution Additional failures include The Printing Place (early1980s), Unified Neighbors of America (early ’80s), CarmelHappenings (early ’80s), UN Fulfillment (early’90s). More obscure efforts include a “To Your HomeAuto Service” business, a “Family Photographer” business,and a firewood cutting and distribution business; all closedshortly after launch.

Other Corbin-Family Ventures:

ProSound Entertainment operated by daughter Lisaand her husband Jason; Kim Corbin Communications,iSkip.com, and related personal growth ventures operatedby daughter Kim; UNWebDesign and multiple dot combusinesses operated by son Brandon.

Intro

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The Bottom Line:

Bill Corbin has seen all kinds of bottom lines, redones, black ones, little ones and pretty decent ones. Thefailures were a tremendous education. The successes havebeen hard earned, delivering knowledge that can be helpfulto fellow entrepreneurs. And along the way, he’s observedand counseled scores of start-up operations. I submit thatthis book is written by a cowboy who has earned his spurs.

Before we dive in, there are a couple of importantcautions.

The book asks you questions such as “Can YouLead?” or “Can You Delegate?” Some readers don’t knowthe answer because they’ve never had a chance to try.Others would give a qualified “no” answer because theydon’t feel comfortable with their skill. These are notnecessarily reasons to abandon the dream. Theentrepreneurial life should be viewed as an ongoing growthprocess. So the relevant interpretations of my questions are“Can You Visualize Yourself as an Effective Leader?” and“Are You Willing to Do the Work to Become an EffectiveLeader?” (delegator, etc.). In many respects, effectiveentrepreneurial leadership is like public speaking. It maynot come naturally. It may be very uncomfortable. But itcan be learned.

Other issues in this book are related to yourpersonal goals or philosophy. For me, “Can YouDelegate?” is a key question because I believe long-termgrowth depends on building a team of empoweredemployees. I also enjoy the idea that, someday, mybusiness will run profitably without my direct daily


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involvement. But there are successful entrepreneurs whochoose to be extremely hands-on, delegating almost noauthority. This kind of issue is essentially philosophical,and you can rightly discard my approach when your goalsor philosophy differ from mine.

One more intro item: The last chapter of this bookdiscusses why, on balance, I am a committed lifetimeentrepreneur. Between here and there is some pretty toughsledding. You are welcome to flip to the back of the bookwhenever you become fearful that dog-catching soundspreferable to many aspects of business ownership.

And a brief style-note: This book does not include achapter titled Do You Have a Sense of Humor? but manyveteran entrepreneurs would argue that it should. Humor(or at least an attempt at it) has been very important to mepersonally and is so much a part of my communicationstyle that—for better or worse—you’ll find it scatteredthroughout this book. Sometimes, in this entrepreneuriallife, there is nothing better to do than shake your head,chuckle, and move on.

Well, enough introduction—let's dive in.

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Chapter 1

Can You Come Up With an Idea

"Good Enough"?

Not everything in this book is positive, but we candefinitely begin on a positive note. YES! You can come upwith an idea good enough to support a successfulentrepreneurial launch. In fact, the role of “the idea” is lessimportant than you might think. Too often, potentialentrepreneurs sit and wait (and wait and wait) for thatspectacular brainstorm—something like plastic or thepersonal computer, or maybe a great gimmick like hula-hoops or pet rocks. Unfortunately, the years will becomedecades before most of us hit on a brilliancy.

At the risk of sounding like a double-talker, Icontend that the real key to starting your own business isstarting your own business. The operative word is start.Tonight, in pubs across the land, people will talk aboutstarting a business. Many of them will talk about an ideaplenty good enough to support the launch. But tomorrowthey’ll be back at Acme Corporation working for the man(or woman). Why? Because they didn’t make the firmcommitment to start.

Once a genuine start decision is made, you canbegin looking for opportunities that fit your interests, skills,goals and lifestyle. The opportunities are there.

The next several pages discuss some of the issuesrelated to a sound start-up idea.


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Full-time or Part-time Launch?

There are several reasons to consider a part-timefirst business, the strongest being experience. You canbegin climbing the entrepreneurial learning curve beforegiving up your regular income. If your idea is “markettestable” on a part-time basis and turns out to be a stinkerlike my Concepts 4 launch, you can gracefully exit withoutsending your loved ones to the street to beg for food.(Actually, I must confess to a bit of melodrama here. WhenConcepts 4 tanked, we sold our house and moved to adecent apartment. Our kids, then about 5 and 3, were elatedbecause we gained a swimming pool. Janet, though, wasn’tnearly as pleased.)

If you do elect a part-time launch, the idea must becompatible. If your part-time business requires full-timeenergy, you will soon be in trouble with the boss. Ideally itis an idea strong enough to eventually support full-timeeffort. If so, you can transition smoothly from part-time tofull time. Some part-timers, though, are aiming solely atexperience—time in the entrepreneurial saddle—beforemaking a full-time commitment. If so, the part-timebusiness may be in an arena entirely different from theeventual full-time effort. For some, this book may lead to ano go decision about the entrepreneurial life. For others, theconclusion may be “part-time makes a great deal of sense.”If this book’s 15 questions suggest weaknesses that shouldbe worked on, a part-time business may be an idealpersonal growth opportunity.

An argument against the part-time launch wasillustrated by that legendary military leader who landed his

Good Enough Idea?

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troops on the shore of an island he meant to conquer andordered his aides to sink all their landing craft. “We arecommitting ourselves to success” was his clear message tothe troops. A full-time business launch is definitelymotivational, especially as car payments, grocery anddental bills come due.

As is true throughout this book, the right answer isup to you, depending on issues such as skill, risk-aversion,available capital, and the relative familial power of yourmother-in-law.

Inside or Outside Your Direct Skill Base?

An attorney or accountant who leaves the big firmand hangs out her shingle is classically inside her skill base.An attorney who buys a bagel franchise has moved a mileand a half outside it.

While it makes sense to be as close to skill base aspossible, opportunity often knocks elsewhere. In myexperience, flexible people who are willing to becomeserious students of new fields can develop and/or hire theskills necessary to operate a variety of businesses. Mypersonal path led to publishing, printing and mailing, fieldsin which I had zero prior expertise.

Purchase an Existing Business or Start a New One?

In theory, purchasing an existing business helpsassure success. Issues like location, market acceptance andoperating system are proven. This may be true, but I advisegreat caution. A sizable percentage of “businessopportunities” are for sale because the present owner isoperationally sick of the whole mess, losing his shirt, or


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both. Too often, it is a game played among you, the sellingbusiness owner, and the selling broker to see whether youcan find the weenie before you become the not-so-proudowner of the seller’s headaches.

Here are steps I’d take before purchasing abusiness:

Find out the real reason for the sale. Retirementis a good reason. Sometimes genuine life change (spousemoving to a distant city, for example) is a good one. “Justtired of doing it” or “seeking opportunities elsewhere” arecaution flags deserving careful scrutiny.

Be sure the purchase price makes sense. Thismay require serious study of methods of evaluation invarious industries. The purchase price should be consideredin three ways: (1) Is it fair, given industry evaluationmethods? (2) Can I make an adequate return on myinvestment? and (3) Could I take the same amount and startmy own business from scratch?

Look at a minimum of three years of actual

financial statements and have a person knowledgeable inthe field review those statements. Consider, but besuspicious of, claims of “fabulous owner perks” such ascash, vehicles and trips that are not…um…exactly clearlyshown on the financial statements.

Carefully review and fully understand any

negative trends affecting the business: changes in fashiontaste, technology, competitive activity, availability ofskilled employees, community growth and shoppingpatterns, and the like. Remember that an intelligent sellerwill try to sell at peak value. It may not be intelligentbuying to buy at peak value if things are likely to go south.

Good Enough Idea?

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Physically watch the business run for several

days. Talk to key employees if this is acceptable to theowner. Observe them, in any case.

Invest in a carefully crafted purchase agreement

that spells out both the assets you are purchasing, the sellerrepresentations that were key to your purchase decision,and your recourse if the business’s value has beenmisrepresented.

Escrow a sizable share of the purchase price withrelease based on your learning that “things are as they’resupposed to be” once you’ve assumed operation.

Of course, starting a business from scratcheliminates the risk of buying a turkey, but it brings its ownset of risks and potential gremlins.

Franchise Vs. Independent Start-Up?

Franchising is immensely popular in America,primarily because it blends the best features of a newbusiness and buying an existing business. You have yourown ribbon-cutting ceremony but are utilizing a (hopefully)proven business system. There are a bevy of issues relatedto this decision. These are among them:

You pay well to become a franchisee. There arealmost certainly an initial fee and ongoing royaltypayments. There may be assessments of various kinds.Understand these fees well and be absolutely sure theymake sense in terms of value you receive. You should bereceiving substantial benefit in terms of trademark,marketing support and ongoing operational support inreturn for your payments. The alternative of “going it


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alone” should be considered when value doesn’t matchcost.

Some franchises are so operationally restrictive

that you’ve really bought a well-defined job. This may beOK, and profitability may justify the giveaway offlexibility, but free-spirited entrepreneur types may chafeunder franchise regulations.

Some franchises carry a risk similar to

purchasing an existing business. An entrepreneur sets upshop in Peoria. The business has some glitz andglamour—maybe even an article in the national businesspress and a mention or two on talk-TV—but isn’t workingwell enough in Peoria for the owner to support his family.So he decides to sell franchises! The logic flaw is hopefullyobvious. I would not consider a franchise purchase unless Icould visit two or more randomly selected locations ofexisting franchises. While there, I would speak directly andfrankly with people who are actually operating thebusiness. Government regulation requires franchisors toprovide considerable “disclosure” detail. Read carefullyand skeptically and seek analysis help from knowledgeablesources.

Enough Investment Capital?

When fledgling businesses expire, the autopsyreport often names “inadequate capital” as the primarycause. This is likely true for reasons obvious or subtle.

Obvious Reasons: Start-up capital must coverinitial costs of getting organized; equipment, facilities andfurniture; inventory; announcement marketing programs;and overhead, including labor costs until revenue reaches

Good Enough Idea?

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break-even levels. One of business’s wise old sayings is“Your start-up will take twice as long as you think...andcost twice as much.” While the math may not be preciselyright, the sentiment usually is. A very large number ofentrepreneurial start-ups simply don’t have enough capitalto survive until sales revenues are adequate to support theenterprise.

Less Obvious Reason: A closely related, but lessobvious need for capital is “the learning curve.” Someideas, especially highly creative ideas, cannot be fullyvisualized on spreadsheets or in written five-year plans.The idea must go to market, be tried, be fine-tuned, be triedagain, etc. until we get it right. An enormous advantage ofgiant companies is their resource base. They can afford thetime, talent and money necessary to test and refine.Experienced entrepreneurs build contingencies into theirbusiness plans. Many first-timers don’t have a clue. Butwhether vet or rookie, having the cash to support thelearning curve can be a tough challenge.

Investment Capital Continued: What Source?

The majority of start-ups are financed with personalsavings often supplemented by some family loans. Thisapproach is simpler than most of the following discussion.It also leaves you with 100% ownership of your business.

If you need capital beyond family needs, the issuesquickly become complex. In general your bank won’tadvance a loan based on a start-up idea. If they think youcan repay the loan whether or not the business works,you’ll get the loan. Hardy souls willing to battle throughSmall Business Loan application processes (SBA) have a


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decent shot at securing a start-up loan beyond theestablished ability to borrow and repay. Some states andcommunities have business development funding available.

If loans are not available, sale of equity—apercentage of your company’s ownership—may berequired. Here are some possibilities:

Individual Investors: Most towns have a wealthyperson or two willing to invest in good-looking start-ups.The search can be long and the turndowns hurtful, but thisis a possible source of funding. As a wildly rough estimateof cost, you may need to give up 20 to 40% of the businessfor meaningful capitalization. Some start-ups may includean informal consortium of investors, perhaps five or evenmore, who share the opportunity and risk.

Venture Capitalists: This avenue is similar toindividual investors except the industry is established. Youcan find prospective investors in the yellow pages or on theInternet. Application procedures are more formalized. Thepercentage of control you relinquish is probably similar tothe individual investor scenario, but the “oversight” afterconsummation of the transaction is likely to be more formaland more intense.

Partnership: Individual investors and venturecapitalists, along with legal entities such as generalpartnerships, are variations of the silent partner concept.The partners provide money but are not actively involvedin day-to-day operations. The possibility of one or moreactive partners, involved in day-to-day operations, isanother potential source of revenue. This concept isdiscussed in the next chapter.

Good Enough Idea?

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If you consider any form of equity sale, it is crucialto understand the pros and cons in terms of cost of capital.Let’s wade into some numeric analysis. Let’s say we need$100,000 to start a business and we sell 35% of thecompany to get the $100,000. If the business fails—hardlyour plan, of course—we made a good decision, at least inregard to raising capital. The investor made a high-risk playin our idea and, regrettably, lost his money. But let’s bemore optimistic. The business goes well, and five yearslater has annual earnings of $100,000 that can bedistributed to shareholders. You get $65,000. The investorgets $35,000. We continue this happy outcome for 20years. You’ve received $1,300,000; the investor hasreceived $700,000. You decide to sell the business and areoffered a million bucks. You receive $650,000; the investor$350,000. While this is an essentially happy scenario, andlooks particularly good while you’re dreaming instead ofdoing, it looks a lot less good when you realize you’veshelled out over a million dollars to secure that initial$100,000. If the $100,000 had been secured by debt vs.equity, you would have long since repaid the loan, and thelater fruits would be in your basket.

The above example illustrates a solid business,probably local, with good earnings but limited growth. Ifyour business has immense growth potential the mathprobably changes. Typically, rapid multi-geographicgrowth cannot be funded by the entrepreneur or the cashgenerating capability of the business. In this case, sale ofequity—perhaps venture capital, perhaps public stockofferings at appropriate points—may be the key to growth.You face the entrepreneurial dilemma: Would I rather own


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100% of a midget or 25% of a giant? My personal path hasincluded 100% ownership of various businesses, but when Iread the proxy statements of small public companies andnote that President Mary Smith owns 800,000 shares of hercompany’s $15 stock, I realize that 100% ownership is adebatable strategy.

Creative or Competitive Business Idea

Creative businesses tend to be entrepreneurialinspirations—an invention, a brand new service, pet rocks,pet sitting, golf balls that beep in the rough.

Competitive businesses slug it out for existingmarkets: bakers, printers, restaurants, gift shops.

There is more glamour in creative businesses. Thereis probably more chance of big bucks in creativebusinesses. But there is a vastly higher risk of failing increative businesses.

My Concepts 4, Inc. adventure was a classiccreative concept. Long story short: I had learned that large-company R&D departments generate “inventions” thataren’t suitable for their distribution channel. RCA, forexample, had developed a wristwatch with built-intelevision in the early 1970s. They also had a TV-calculatorcombination that looked amazingly like early personalcomputers. But they correctly analyzed that their dealerorganization wasn’t geared to sell or repair watches orcalculators. So the products (along with others) gathereddust on R&D’s shelf. I talked to friends in other industriesand learned that this “mismatch of product and establisheddistribution channels” is a typical big-company dilemma. Iwas a restless entrepreneurial spirit at the time, and

Good Enough Idea?

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assumed, almost certainly correctly, that there werethousands like me around the country. Eureka! We’ll builda national network of aggressive entrepreneurs and makeourselves available to RCA, other large companies andsmaller inventors. We’ll become the distribution systemthey need to exploit new inventions. Still sounds prettygood when I write it, but I totally missed its “chicken-egg”problem. I couldn’t interest RCA if I didn’t have a network.I couldn’t interest entrepreneurs if I didn’t have products.After a forlorn 15 months—the highlights of which were aweak novelty greeting card line and a $49.95 grandfatherclock made of cardboard (which could be crumpled by anypassing 3-year-old on a Big Wheel)—Concepts 4disappeared beneath the waves of the entrepreneurialocean.

The idea was novel. It made sense to a lot of people.But it was unproven and apparently unexecutable, at leastwith my resources and skill base.

I next invented Unified Neighbors, a localizedconsumer magazine that would tell you who to call to fixyour washing machine or roof. Again, the concept wasbrand new. Making sales was like carving granite. But thistime the idea worked.

Because the magazine required printing, I securedsome equipment, originally just to save a few dollars on ourown printing costs. Since the magazine was monthly, ourequipment sat idle much of the time. I notified readers that“we’ll be your printing company.” It was wonderful! Theycame, with budgeted money in hand, and suddenly Iunderstood the advantage of a competitive business. Thedollars are there! They’re already flowing to somebody.


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Sure, I need to find ways to be distinct and offer real value,but I don’t need to carve granite.

On balance, as a long-time veteran of both kinds ofstart-ups, I’d vote for competitive businesses, but there aregreat successes and unhappy outcomes in both categories.

What about a Dot Com?

As I write these words, Internet ideas areeverywhere. Some are extremely creative. Some use thepower of the Internet to deliver traditional products orservices. There are business-to-consumer ideas, business-to-business ideas, even business-to-pet ideas. Only foolsare confidently predicting the direction of e-commerce as itapplies to the small business entrepreneur, but all thischapter’s cautions apply; and there is one more caution.Many Internet start-ups are based on “appeal of the idea”not whether the idea can demonstrably make a profit. Theapparent hope is that “website traffic can eventually beturned into dollars – somehow.” Unless your pockets areextremely deep, this is very risky thinking. The good olddays when ideas were tested by their clear ability to earn aprofit provided a much firmer foundation.

The KEY Step Regarding Your Idea

Whatever idea you decide to pursue, take this step.Find people, knowledgeable people—maybe even peoplewho don’t like you very much—and ask them to brutallyanalyze your idea. What’s wrong with it? What might bewrong with it now? Later? Beat it. Smack it. Give it yourbest shot.

Good Enough Idea?

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If the idea is good, it’ll survive this scrutiny.Defending it will be good practice for you (usable againwhen meeting with people like bankers).

If the idea is bad, better to have it exposed beforeyou’ve invested your savings and much of yourself.

In hindsight, I think Concepts 4 was a demonstrablybad idea that would not have survived serious scrutiny. Buta combination of excitement, ego, and “don't mess up myenthusiasm with negativism!” kept me from seeking toughscrutiny.

Don’t make that mistake!

Each of our chapters includes a section called “To

Ponder and Discuss.” The purpose of these questions is

to challenge you personally and to provide discussion

points with others.


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To Ponder and Discuss

1. Why, for many people, is starting the elusive first key tostarting a business?

2. What is the key advantage to a part-time start-up? Thekey disadvantage?

3. What are the pros and cons of creative vs. competitivebusinesses?

4. What are the pros and cons of starting a business vs.buying an existing business?

5. What are the pros and cons of buying a franchise?

6. What are the pros and cons of using your own money vs.seeking investors?

7. Would you rather own 100% of a small business or 20%of a national business? Why? What are pros and cons?

8. Is it smart to risk discouragement by having a negative

horse’s fanny analyze and maybe beat up your business

idea?

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Chapter 2

Do You Have the Right

“People Support”?

Two kinds of support are vital: moral andoperational. It is important to understand both and notconfuse one with the other.

Moral Support: As we’ll see in the next severalchapters, the entrepreneurial life includes some toughtimes. You may work harder than you thought you’d work.Success may take longer—and involve moresacrifice—than you dreamed it would. As you faceoperational trials, tribulations and disappointments, you’llbe affected in ways that impact both your business andpersonal life. This reality should not be sugarcoated.

As I look back to 1974, the number-one criticalsuccess ingredient has been support from my family. Theyrealized how much I wanted to be an entrepreneur, werewilling to share in the sacrifices, and gave me vital moralsupport in the tough times. I can’t imagine a happyoutcome without that kind of support, and I would stronglyadvise you to secure it in advance.

Operational Support: Your operational support isthe network of employees and associates who help operatethe business. Especially in the early going, it is tempting toconfuse operational and moral support. As president of


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your own company, you soon understand the phrase “It’slonely at the top,” even if your top isn’t very high yet.Before you are comfortable with the process, you must dothings like set strategy, make decisions, and patch theproblems caused by not-so-good decisions. You may bepersonally involved in business details for which you feelpoorly qualified. For example, many entrepreneurs, meincluded, were jolted when they first realized they weretheir own bookkeepers.

For these reasons, it is tempting to consider anactive business partner. You gain someone to share theburdens of leadership and someone to fill in the weak spotsin your skill base. The whether and if so who questions ofbusiness partnership are remarkably similar to whathappens in the marriage decision.

For this discussion, partner is (1) a person (orconceivably more than one person) who owns a substantialpercentage of the business and (2) is an active day-to-dayparticipant in the business.

When I was younger and more rash, I advisedagainst all partnerships, saying, “A partnership has all thedrawbacks of marriage with none of the advantages.” Thereis a kernel or two of truth in the statement. Indeed there isenormous pressure on business partnership relationships.They tend to operate on an “equal-in, equal-out” premisethat is rarely true in practice. They require compatibility ofgoals that is difficult to achieve. As a simple example, let’ssay the business has been quite successful and couldfinancially afford a dividend of $200,000—$100,000 toeach partner. One says, “This is great! I can finally affordthe cabin in the woods I’ve been dreaming about.” The

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other says, “This is great, but obviously we should investthe $200,000 in another part of the business so we can growthe business faster.” That kind of goal difference is tough toreconcile. Because spouses and families are often involved,the difficulty multiplies.

When businesses are struggling, partners, beinghuman, tend to blame the other for problems. Both tend tofeel they’re working harder and sacrificing more. Conflictcan be intense.

Over the years, though, I’ve seen partnerships workgrandly. So my old never is now a qualified maybe. Hereare some of the issues:

Fear (Moral Support) Is a Terrible Motivation

In Chapter 1 we discussed those timid souls whosebusiness start-up planning is done at the pub, over a beer.Fairly often (especially after the beer has worn off), theparticipants still like the idea of owning a business, but arefearful to take the plunge alone. So our pub buddies decideto become business partners primarily for moral support. Itmight work out, but the challenges of business partnershipare vastly different from the challenges of swapping goodstories or golfing and bowling together. The odds ofpartnership incompatibility are extremely high, and theensuing conflict can destroy friendships. Fear of going italone is simply not a good motive. Entrepreneurs can findcomfort and fellowship among key employees, inentrepreneurial clubs, even in Internet chat rooms.


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What If You Need Money?

As discussed in Chapter 1, the source of start-upcapital is a key issue. You may need to give up someownership to raise enough capital for a sound start. If so,it’s probably best to divide the issue of cash from the issueof operating talent. The phrase “silent partner” denotes arelationship in which the partner is involved as an investoronly, NOT as a day-to-day participant in your business.

If your primary goal is raising capital and yousecure that cash by adding an active partner who happens tohave some cash, you’ve essentially allowed someone tobuy a job in your business. Your partner will assume thatjob is his—bought and paid for—and will be inclined tocontinue feeling that way even if his job performance ispitiful. As you realize that a doofus is permanentlyentrenched in the office next to yours, the significance ofhis initial investment soon pales.

Fairly often, active partners do invest substantiallyin the business. This is A-OK if the primary goal of theoriginal partnership was addition of key capabilities asdiscussed below.

What About Key Skills You Lack?

Let’s say you’re working on a restaurant concept,but you’ve never owned a restaurant and you’ve nevercooked anything more complicated than Pop-Tarts andfrozen pizza. This reality would definitely inspire thethought, “Maybe I should add a partner who knows howthis business works.”

As mentioned, it’s extremely common for anentrepreneur to lack one or more of the critical success

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skills: marketing, accounting, whatever. Without doubt, itcan be tempting to consider seeking a partner who bringsthe skills you lack.

As a general rule, it is not necessary or wise to addspecific skills by giving away ownership in your business.The reason you hire employees is to add skill. In my owncase, I’ve successfully operated a sizable commercialprinting operation (complete with thousands of gears,pulleys and electrodes) with no prior background and withpitiful personal mechanical aptitude. Our key employeesmake it possible.

If your start-up is on a financial shoestring, yet youfeel the need for a marketing VP and can’t afford one, it isparticularly tempting to offer a partnership position. Iwould enter such a partnership only as a last resort. It’sbetter than becoming paralyzed and never starting yourbusiness, but all possible alternatives should be explored.

[I should pause here, in the interest of balance andobjectivity, to say that not all successful entrepreneursagree with the idea of maintaining ownership to the extentpossible. There are strong success stories built around theconcept of achieving teamwork, loyalty and dedication bysharing ownership with key employees. This kind of issueis discussed in more detail in Book 5, EntrepreneurialSavvy. I would argue that most first-time, start-upentrepreneurs are not ready to deal with the complexities ofthis kind of equity distribution, but I sure wouldn’t say“stop” to an E (our time-saving abbreviation forentrepreneur) who is philosophically dedicated to thisapproach.]


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What If There's One Person Crucial to the Business?

A few business concepts are built around a singleperson’s persona or skill. Examples might be celebritieslending their name or artists bringing a specific talent. Inthese cases, as your business would be an empty bagwithout that person, you may need to consider a partnershiparrangement. Even then, consider all possible alternativesfirst—for example, an attractive royalty arrangement thatwould assure ongoing participation in the business.

What If You Lack Key Entrepreneurial Qualities?

There is a crucial difference between business skillsand entrepreneurial qualities. If you can’t successfully adda row of numbers, you lack a meaningful business skill. Ifyou are paralyzed by quick decision-making, you may lacka critical entrepreneurial quality. The next 13 chaptersdiscuss key entrepreneurial qualities. Some of thesequalities are core—you really need them. For example,willingness to face risk and accept the possibility of failureis fundamental. A well-chosen partner might bring othersof the qualities to your enterprise—for example, objectiveanalysis and decision-making. You still need to clearlydefine roles, goals and expectations. You still face multiplepressures. But that person may be key to your comfort withentrepreneurial life and, accordingly, deservesconsideration as a partner.

Securing Equal Commitment

Business owners often say, “No one cares about mybusiness like I do.” This is usually true and, for some,carries the high price of being yoked—physically and

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emotionally—to the business. Vacations become too rare.The vacations that are taken can be interrupted by crisis inthe business. The entrepreneur may be unable to fully enjoyrelationships and activities because of mentalpreoccupation.

In some cases, the problem is workaholism and willlikely continue for a lifetime unless addressed at a corelevel. A partnership won’t help.

But in other cases, the business is so demanding thatbreaking free from the physical/emotional yoke islegitimately difficult. If by entering a partnership, youachieve a fellow soldier willing to carry an equal burdenand willing to fully cover for you while your family enjoysthe fruits of your hard work, the partnership may be wellworth it.

Choose Carefully with Complete Understanding

This book cannot detail all considerations of aneffective partnership, but find books or people who can.Take the time to make a very good decision including theissues of personal compatibility, business philosophy,skills, approach to risk, and both short- and long-termgoals. Invest in an excellent “buy-sell” agreement. Thisdocument covers the what-ifs of a partnership: What if apartner dies? Is disabled? Wants to sell his interest in thebusiness? What if the business cannot support bothpartners? Who stays? How much does the surviving partnerpay the departed partner? When? A buy-sell is crucial to asound partnership arrangement.


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1. Why is the support of family and loved ones soimportant?

2. Why do partnerships rarely achieve an equal-in, equal-out equilibrium?

3. Why is partnership goal conflict so difficult?

4. Does it make sense to secure a partner’s money as wellas his/her capability? Why yes? Why no?

5. When do partnerships make sense?

6. Is fear of a poor partnership reason to postpone yourstart-up?

7. When should you take action if it’s clear yourpartnership is not sound?

8. What is the role of a buy-sell agreement? Why is it soimportant?

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Chapter 3

Will You Risk,

and Could You Deal with, Failure?

This chapter covers, with zero sugarcoating, theleast pleasant issue facing a prospective entrepreneur. Thesword has two edges. Your business may succeed; you mayprosper grandly. But your business may fail.

Our purpose here in Chapter 3 is not to discussfailure avoidance. Sure, you will do everything possible tosucceed. You will do good prior research; you will planyour start-up capital and working capital well; you willdevelop a sound business plan; and you will carefullyexecute that plan. All these things reduce the odds that youwill face failure. But the ugly truth remains: there is achance that your business will not survive.

As already discussed, your author knows of what hespeaks. The tragedy called Concepts 4, Inc. was failuremost grand, including the symbolic and literal loss of oursecond-mortgaged house. I might have failed lesscatastrophically, perhaps by pulling the plug earlier whilethere were still resources to finance a reasonably gracefulexit. But even that would have been clear failure. I wouldknow it. My friends would know it. My enemies wouldknow it. My wife’s mother—not to mention her bridgeclub—would know it. All the skeptics who told me Ishouldn’t have tried would know it. There is no way toduck a humiliation bath when a business fails.


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Let’s be deadly serious for a moment. In periods ofAmerican history like 1929, it was apparently rainingbodies on Wall Street. The market had crashed. People hadlost fortunes. Some, no doubt, lost their own fortunes andthe fortunes of clients who had trusted them. So, in severaltragic cases, people said, “I cannot live with this collapse,”and quite literally ended their own lives.

I do not relate this story to be melodramatic. Icertainly am not predicting some dire end for you if yourbusiness fails. Here is the key point. Those defeated soulsof 1929 had entered a business arena that had a huge upsideand corresponding downside. They knew it. Theyundoubtedly talked about it, maybe even joked about it,over coffee or cocktails. But when the potential downsidebecame reality, there was not enough personal resilience toabsorb the defeat and move on.

The resume of many successful entrepreneursincludes at least one failure. Viewed philosophically, thefailure is highly educational and an important, thoughcertainly traumatic, step toward eventual success. Even ifthe outcome is a life-decision to return to a non-entrepreneurial career, the correct philosophical view is “Atleast I tried. I won’t be sitting in my rocking chair somedayregretting that I never even stepped up to the plate.”

These are the key issues:• You must understand and accept—intellectually and

emotionally—that failure is a potential outcome of yourdecision to become an entrepreneur.

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• You must accept the possibility of a substantialfinancial setback along with loss of the time and energyyou invest.

• To the extent that your self-worth is defined by theopinion of others, you must be willing to face thepossibility of failing in full view of those people. Somewill be disappointed in you. Others may laugh, cry orsimply shake their heads at your folly.

• Your immediate family must be willing to face theagony of defeat and its potential impact on lifestyle andreputation.

• You must have the personal emotional stability toabsorb failure and move on.

This subject requires intense introspection and opencommunication with those who might be affected. A usefultechnique is “scenario projections.” Visualize the completeexperience, making a worst possible set of assumptionsabout outcomes. Your start-up costs more than expected.The market demand is weaker than expected. There is morecompetition than expected. There is a run-up of key coststhat you didn’t anticipate. And the ship sinks.

Can you, and those you hold precious, deal withthat possibility? If not, the entrepreneurial life is a highlyquestionable choice for you.

If so, you can lay claim to a vital entrepreneurialquality. Then, make it a point not to think about this issueagain. There is immense wisdom in the quote, “That whichyou fear will come upon you.” Put the thought of failurebehind you and concentrate on success.


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1. Have you accepted at the intellectual and emotionallevel that an entrepreneur is a risk taker and risk involvespotential negative outcomes?

2. What is the role of family and loved ones in the risk-of-failure issue?

3. Are you tough enough and secure enough as a person toabsorb failure and rebuild?

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Chapter 4

Can You Face Fear?

The ability to face fear is a close cousin to theability to risk failure. Failure, though, tends to be anevent—a grim moment when the business must bediagnosed as being in a hopeless condition and removedfrom life-support.

Fear is more like a nagging condition than a singleevent. Hopefully you won't face it often, but I'd bet heavilythat every entrepreneur faces more than enough.

Here are just a few of the challenges and dilemmasthat might inspire a bit of justified fear:

• Business is not growing at anticipated rates; workingcapital is running out; bank is running out of patience;not clear where more cash will come from.

• Major new competitor enters the market.• Key customers begin defecting to new competitor.• Major new technology or market trend threatens to

make your approach to business obsolete.• Key employee gives two-week notice.• Key ex-employee then opens competitive business.• IRS notifies you of impending major audit.• Some key financial records are not in quite the audit-

worthy state they should be.• Your business is targeted by a consumer or political

group. Unfavorable media coverage results and youface interviews.


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• You uncover dishonesty among employees and aren'tyet sure the extent of your losses.

• Key customer who owes you a great deal of moneydeclares bankruptcy.

This list could be vastly longer, but I'm sure you getthe idea. There are several topics in this book to which our“it's lonely at the top” phrase applies. Fear is certainly oneof them. In our personal lives, fear is buffered by supportfrom loved ones. In our “corporate career,” fear is usuallyshared among supervisors and other employees. Theentrepreneur tends to face fear alone. Worse, theentrepreneur must often suck it up, put on a happy face, andconvince employees and customers that all is well. A leaderwho has assumed a figurative (or literal) fetal position inthe corner of the office will not inspire confidence.

Note an important distinction. This chapter is notabout feeling fear; it is about dealing with fear. World-classentertainers, reportedly including Barbra Streisand,experience intense stage fright before performances. Youwill experience a bit of “business fright” when first the IRSvisits or other calamities befall. The issue is what you dowith the fear. If you are paralyzed, depressed, or otherwisereduced to a less-than-effective state, that is bad. It willimpact the situation you face, your self-confidence, and theconfidence of those who rely on you. If you take a deepbreath, square your chin, and plow ahead, you are doing thejob that a leader must do.

Note, too, that you can grow personally in yourability to deal with fear. With luck, your challenges will besmall while your business is small. As the business grows

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and you gain experience as a fear-processor, you will beable to face bigger issues.

However, if the entire notion of facing fear andfighting through it is extremely…well…frightening,entrepreneurial life may not be for you.


1. Envisioning yourself in an entrepreneurial role, whatkinds of problems or issues seem frightening?

2. How do you deal with fear in general?

3. How well do you hold up under pressure? What kind ofexample would your attitude and behavior provide foremployees in your business?

4. If fear is a problem, can you imagine growing in yourability to handle it?

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Chapter 5

Patience, Perseverance &

Willingness to Sacrifice

This book includes several irritating chapters. Thismay be the most irritating one of all. The entrepreneuriallife of fiction and fantasy includes an initial financialinvestment and some hard work to get things going. Thenit’s supposed to generate excellent profits that will supportthe good life: cars, boats, trips, lake cabins, pursuing yourspecial life-interests, whatever.

It might happen that way, but most veteranentrepreneurs would recommend you not bet the familyfarm on that scenario. Here’s the problem. It is widelyunderstood that start-ups take cash and hard work. It is lesswidely understood that growing businesses take cash andhard work.

Let’s look at cash first. The reasons your growingbusiness will need cash depends on the kind of business. Itmay be more inventory, supporting higher receivable totals,new equipment, new store locations, ongoing hiring andtraining of new employees. There are many reasons. Butthe bottom line is this: The need for capital tends to suckthe money your business can put on the bottom line. Ifyou’ll pardon the double pun, taxes do some significantsucking too. When the sucking is done, the puzzledentrepreneur often sports a good-looking P&L and anempty billfold.

Patience, Perseverance, Sacrifice

37

A clear road to entrepreneurial ruin is impatience. Ifyou say, “I’ve worked hard, I deserve a much betterlifestyle,” and prematurely begin funding boats, cars, etc.rather than growth, something has to give. The only othersources of growth capital will be selling equity orincreasing debt. As already discussed, equity is anextremely expensive source of capital. Excess debt is alsoexpensive and can make your business vulnerable to aneconomic downtown.

Very often, the right answer is patience. As I writethese words, I am still driving my 1990 Acura Legend. Thereason is not entirely sacrificial. It has been a great car thatruns today pretty much like it did when I got it. It looksfine. So my Scottish ancestry tells me to drive on. Butanother reason is habit. Over the years, I’ve learned to fundmy business before my pleasures. The printing business hasnonstop need for new equipment. Much of our equipmentbase has been internally financed through company profits.This is good for growth and good for the market value ofmy company, but not good for my line-up of boats and carsand such.

This subject clearly involves your loved ones aswell as yourself. If a spouse, for example, is not fully on-board your entrepreneurial ship, the potential need for long-term financial sacrifice will become a source of conflict. Inapproximately 1979, I first said to Janet, “If I just get a_______ (fill in name of piece of printing or mailingequipment), we’ll be all set.” I meant it. She believed it.But the business grew, so in approximately 1980, I said toJanet, “If I just get a ________ (fill in name of a largerpiece of printing or mailing equipment), we’ll be all set.” I


38

meant it. She didn’t quite believe it, but was hopeful.Eighteen years and maybe a hundred pieces of equipmentlater, I don’t say and she doesn’t ask. As will be clear inChapter 16—Why It’s All Worth It—we haven’t missedmuch that we feel is important; but, along the way, therehave been many sacrifices, and family support has beencrucial.

The ongoing investment of time andenergy—physical and emotional—is somewhat similar tothe need for more cash. A growing business sucks time andenergy. You must serve a growing clientele while makingthe plans that will support future growth. You likely havemore people to train and supervise. Your problem count isup. For a host of reasons, you will probably work harder inthe growth phase of your business than you did in the start-up. Willingness to make this kind of ongoing sacrifice isimportant to the entrepreneur. Again, family support isvital.

It is important to be clear that “willingness tosacrifice time and energy” does not mean forever. Ifbecoming an entrepreneur meant eternal forced labor inyour own sweatshop, it would be a highly debatable choice.As we discuss in Chapter 16, you can build toward anenterprise that supports your desired lifestyle, includingtime outside the business. It may require team-building,delegation, even willingness to forego some income infavor of other perks, but it can be done.

A less obvious, but highly relevant, area of sacrificeis ego. To illustrate, allow me to replay a phoneconversation from a day when I was doing president andreception duty.


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BC: Hello, Bill Corbin here.Caller: Hey, Corbin. Wow, I’ve reached the

president of the company!BC: Well, that’s true, but you’ve also reached the

janitor.I do not relate this tale to suggest entrepreneurs are

doomed to latrine duty. But I will suggest that it reflects animportant attitude. You need to say, “I’ll do what it takes.”If funding supports a hired janitorial crew, that’s great. If itsupports hiring a necessary sales person or a bookkeeper,that’s great. But if you can’t afford to hire for it, and it’sgotta be done, guess who’d better do it?

Another ego blow relates to one of the fundamentalgoals and misconceptions, of entrepreneurial life. “I want tobe my own boss!” shouts the new entrepreneur. “You’regonna have more bosses than you’ve ever had!” respondsthe grizzled veteran. This issue is subtle. I left corporateAmerica because I wanted more control of my destiny. Ididn’t like political games and I wasn’t confident that mysuperiors had my best interest at heart. They were clearlytoo concerned about their careers to worry about mine as ahigh priority. For me, the “more control of destiny” goalhas been attained and is important. But the idea thatentrepreneurial life generates a mini-kingdom in which yourule supreme is just plain not true. My earliest clear lessonwas a summer day in 1977 when, unannounced, an IRSagent walked in to conduct “a routine field audit.” I spentmost of a week jumping through hoops at the command ofthat boss. Many entrepreneurs become so dependent on keyemployees that, as a practical matter, the employeesbecome bosses in multiple ways. This is to be avoided, and


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is the subject of Chapter 7, but it can happen. The clearboss for most entrepreneurs is the customer. If youestablish a customer-oriented enterprise, you will soonrealize that key customers have major power. Entrepreneurswho don’t grasp and adapt to the need to share andsometimes relinquish power will face tough sledding.

Perseverance

The willingness to sacrifice—money, time, ego—islikely essential to entrepreneurial success. Now let’s turn toits equally important first cousin: perseverance.

In preparing this book, I conferred with manyentrepreneurs. “What’s the most important quality?” Iasked. The answers were many but the single mostcommon theme was perseverance. In various ways, itimpacts most of this book’s chapters. Simply stated,entrepreneurial perseverance says, “I am going to make thisenterprise a success. I will work as hard as it takes and aslong as it takes. If there are things I don’t know, I’ll studyuntil I know them. When times are tough, I’ll be tough. I’llfight my way through the bad times with faith andoptimism that problems will be solved and good times areahead. I will be a winner!”

Here’s a recommended exercise. Buy lunch for asuccessful entrepreneur. Explain your business concept andask for a realistic worst-case scenario of what you might gothrough to make it a success: How long? How much work?How much money? If you survive that lunch, withoutlosing yours, that’s a good sign.


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1. Why do growing businesses require cash rather thangenerate a great deal of cash for the entrepreneur tospend?

2. Is your primary goal as an entrepreneur to (a) build yourbusiness or (b) support your lifestyle?

3. Do you have the kind of patience required to sacrificeuntil the business is on sound footing?

4. Are you prepared to invest the time necessary to buildyour business even if it means foregoing favorite interestsand hobbies?

5. Can you suspend your ego and dive in at any level ofyour business?

6. Can you accept that customers, governmental regulators,even employees will sometimes feel like “the boss”?

7. Are you tough enough and patient enough to perseverethrough tough times on your way to success?

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Chapter 6

Can You Take Bitter

Disappointment?

At the risk of having you declare me a total gloom-meister, let’s look at another of the real negatives ofentrepreneurial life. Now and then, you will bespectacularly disappointed. We’re not talking here aboutthose wee issues like “darn it, sales are 4% below forecast.”We’re talking about punched-in-the-gut-seriousdisappointment.

While I am writing this book without benefit of acrystal ball, I’d predict disappointment of one or more ofthese types for 99% of entrepreneurs:

Result Vs. Expectation

Say you come up with a new business idea ordevelop a major program for serving a new account or anew market. You’re sure you’ve done everything 100%right. You are 100% sure your efforts will be rewarded.You execute your plan, proposal, seminar, and things don’twork out as planned. Perhaps you receive a combination ofboth business and personal rejection. For example, anindication (subtle or blatant) that not only was the idea bad,but whoever dreamed it up was an idiot. That kind offeedback can be very hurtful to the psyche. If your

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company’s business plan relied heavily on a successfuloutcome, it can also be very hurtful financially.

Customer Defection

If your business depends on repeat activity fromloyal customers, you will likely develop closecorporate—perhaps even personal—relationships with keyaccounts. Veteran entrepreneurs know that the great ebband flow of business includes gaining new accounts andlosing some existing ones. But the losses can carry aboatload of emotional and financial implications. If yourmaturity level is well developed, you will take theseactions:

• Learn immediately why the loss occurred.• Try to save the account by appropriate remedies.• In any case, learn as much as possible about the

cause and thoroughly analyze your business systemfor flaws that need fixes.

• Take decisive action.If your maturity level isn’t well developed—or if

the account was central to the plan for financing yourchild’s college education—you may feel tempted to curl upin a little ball and cry. Again, this is not productive and isnot inspiring to employees or other customers.

Employee/Partner Disappointment

There is no body blow worse than learning of amajor breach of trust on the part of a trusted member ofyour business team. Breaches can include these:


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• Out and out theft• Negligence so severe that the result is similar to

theft• Blatant lying about matters on which the truth was

important to you• Breaches of confidence that destroy internal

harmony or aid competitors• Sexual harassment

This list could be extended ad nauseum. The resultis the same; you have a trusted team member who bitterlydisappoints you. In smaller businesses, it is quite possibleyou view this person as a friend. It may be a relative. Yetjob termination may be necessary.

Problems in Clusters

When entrepreneurs gather to exchange war stories,a recurring theme is the multiple body blow. “We nosooner got those OSHA boys out of our hair when the damup yonder broke and flooded the whole dang warehouse.About that time, Mildred announces she’s suing because ofwhat Freddy said to her, and the bank got wind of that andcalled our loan. Man, that was a tough three days.” OK,you may never face quite the multiple blasts of thisfictionalized account, but problems will likely befall you inclusters.

Whether one at a time or in groups, disappointmentwill enter your entrepreneurial life. You must be able toabsorb the jolts, take necessary action, and move on.

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1. In general, can you absorb disappointment and bounceback in a reasonably short time frame?

2. If bitterly disappointed by another person, can you setaside the emotional issues well enough to continueoperating effectively?

3. If battered by multiple problems at the same time, canyou absorb and bounce back?

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Chapter 7

Can You Be a Leader?

When you first select a business idea, youconsciously or unconsciously(!) make a secondarydecision: Will the business have employees? There are one-man or one-woman shops, usually service enterprises,involving the owners’ energy and personal skill. There arebusinesses that succeed nicely without staffing beyond areceptionist and a part-time bookkeeper. However, themajority of growing entrepreneurial efforts will require ateam of employees. The roles of good employees areimportant:

• They allow you to multiply your efforts—the keymathematical concept stressed by many books on“how to become wealthy.”

• They bring skills that you may lack.• They are the best chance you have to take a two-

week vacation before your 80th birthday.• They can be part of a business family that becomes

an important part of the fabric of a satisfying career-life.

On the other hand, our entrepreneurs trading warstories might be overheard to say “You know, I’d loverunning that business if it weren’t for two things: customersand employees.” Customers can be demanding and

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unreasonable. Your employee group can give you closeidentity with the lonesome cowboy whose herd isbellowing loudly and running in all directions.

If you have selected a non-employee businessconcept, this chapter is not key to your success. If you willhave employees, read carefully

The concept of leadership is complex andsubjective. Some important points:

Effective leadership does not require a gung-ho,

General George Patton style. It does not require animposing physical presence or high-level oratorical skills.There are extremely effective leaders who are reserved andsoft-spoken. Many weigh in at 125 pounds or less.

Effective leadership often involves honest

recognition of leadership weakness. If your businessrequires strict cost accounting and you are a wild and crazyrecord keeper, you must hire and empower leadership inthat area. If your sales team will require ongoingmotivation and your own mother occasionally dozes offwhile you are speaking, you’ll need to hire and empowerleadership in this area.

There is ongoing debate about whether leaders

are made or born. For entrepreneurial purposes, I believethey are made. You can learn to be an effective leader evenif you never won a high school election, served as captainof the team, or were voted queen of the May Festival.HOWEVER, learning leadership requires hard work andwillingness to step outside—perhaps far outside—your


48

comfort zone. This willingness involves personal courage,one of the key qualities for entrepreneurial success.Courage is necessary to start in the first place; it is the realsubject of Theodore Roosevelt’s tribute to the man who iswilling to enter the arena rather than sit in the bleacherswith life’s timid souls. Courage and toughness are requiredto face and overcome the disappointments that will surelycome your way. But these qualities, like muscle, will getstronger with practice. As we discuss various examples ofentrepreneurial leadership, you need not say, “Yes, I’mfully prepared in this area.” But you do need to say, “I canvisualize myself, through practice and hard work,becoming effective in that area of leadership.”

I will now attempt to list on-the-job entrepreneurialleadership requirements:

Vision: You must correctly define a market andenvision your new company’s products, services, marketingmethods and administrative systems. This strategic visionmust be correct for the present and must extend far enoughinto the future to allow ongoing business success. It mayinvolve the need to anticipate and navigate rough seas,things like intense competitive reaction to your moves andfluctuating economic conditions.

Articulation of Vision: Attracting employees in thefirst place requires that they believe your company is soundand will be successful. Employees will pull together, in thesame direction, only to the extent that they buy into yourstrategic vision. They will remain energized and excited to

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the extent you continue to paint a picture of success andprogress. As your business grows, you will need aleadership group, perhaps department heads. These leaderswill delight you if they are able to articulate the company’sstrategy and value system. They will disappoint you if theyarticulate their own or someone else’s strategy and valuesystem. It is your job to communicate the vision. Devicescan include newsletters, company meetings and staffmeetings. However the primary device should be short,ongoing, one-on-one discussions.

Disciplinarian: This area is so important it has itsown chapter. We’ll talk about the need to develop andenforce procedures such as quality control and accurateaccounting. We’ll also talk about the need to communicateand enforce the “culture” of your company.

Tough Decision-Maker: This area also has achapter. You must be able to (1) identify problems thatmust be addressed; (2) objectively analyze alternatives; (3)make firm decisions on a timely basis; and (4)communicate and enforce those decisions. This process, inmany businesses, is daily and intense.

Fearlessness Regarding Employees: Asmentioned, many entrepreneurs experience an early bubble-burst related to the notion that “I’m the boss.” It is quicklyapparent that customers—particularly the demanding, high-maintenance customers—are the big boss. Less obvious,but more painful, is the possibility that one or moreemployees become your boss. “Hey, how can that happen?”


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you might ask. Well, they aren’t really the boss on anorganizational chart, but if they become so important to youthat you literally fear the possibility that they would leavethe company, they gain a power that can be very boss-like.Real-life examples include these situations:

• A highly skilled employee whose personal skill iscentral to your ability to provide the company’sbasic service;

• A computer-literate person who installs andbecomes the only truly trained person in complexcomputer applications;

• A sales person who is bringing in a large percentageof your business but could likely take that businessto a competitor;

• A popular foreman who has built a cult-likeadmiration among his/her employee group, causingyour to fear the loss of multiple employees if theirguru departed.

Genuine entrepreneurial happiness is impossibleunless you can reach a position of fearlessness regardingthe possible loss of any employee. This doesn’t mean youmust be hard, cold and indifferent. Positive personalrelationships are enjoyable and improve the chance that keyemployees will remain lifelong employees, but you mustnot fear their loss. This fearlessness is required to maintaincontrol of your business, to be able to negotiate reasonablyduring salary-increase discussions and to sleep peacefullyat night. It also requires a dose of courage (a recurringtheme in this book for sure). You must be willing to

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say—and believe in your heart—“If this key persondeparts, the company will be just fine. It may be bumpy fora few weeks, but we’ll be just fine.”

Note that your courage level can be helped ifyou’ve developed a corporate discipline that all employeesare to be “backed up,” through systematic cross training.This helps, but you will still have key employees whosedeparture would hurt. Can you be tough enough to riseabove fear and remain firmly in control of yourorganization?

Problem/Crisis Handler: Every seasonedentrepreneur has numerous “when it hit the fan” stories:someone dropped a pipe wrench into a machine running atfull speed; a customer rejects a huge job and demands thatit be redone immediately; a lightening strike sizzled thecomputer system and the phone system; a fire destroyedvaluable inventory; the IRS auditor paid a surprise visit;three key employees departed in the same week; three keycustomers declared bankruptcy in the same week; a keyemployee was conducting his marijuana marketingcompany on company time and on company phone lines;one key employee was showing nude photographs ofhimself/herself to another key employee who really didn’twant to see them. The list could fill several pages. Theleader has two key roles: (1) Absorb the crisis personallyand operationally; and (2) avoid chaos or panic in the ranks(usually involving employees, but sometimes, dependingon the nature of the disaster, customers). It requires genuineleadership to calm your own fear, attack the problem, andcommunicate—usually by observable behavior—that the


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ship will be patched and will sail on. It is not good if thecaptain is standing on deck sobbing loudly or throwingwomen and children out of the lifeboat to make room forhimself.

Mediator: Some sections of this book may or notapply to you. This one is 100% assured. As the employeegroup grows, there will be conflict. Some conflict is rootedin personality conflict. Some is rooted in honest differencesof opinion; some is politically motivated; some ishormonally motivated; some seems to come from nowherewhen the moon is full. Whatever the source, there will beconflict and the entrepreneurial leader must be strongenough to mediate differences and get people back to workon a positive basis. Our company operates with a mandateof “professional cordiality,” the idea that employees neednot like each other but must operate cordially in theconduct of company business. This approach, ifsuccessfully instilled in your corporate culture, helps, but itwill not eliminate conflict. It does give you a basis to bringpeople together; to make it clear that the purpose of theenterprise is to serve customers, not to provide employeesan opportunity to practice for the Olympic debating orfencing teams; and to demand, then help facilitate, swiftresolution of conflict. Sometimes you feel like a counselor;sometimes like a referee. But you must be able to handlethis area effectively.

Teacher: The role of teacher is extremely importantand often neglected. If growth requires a growing numberof employees, it is crucial that they have (1) technical

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skills; (2) administrative skills to the extent they areinvolved in record keeping of any kind; and (3) “cultureknowledge”—awareness of the goals and value system ofthe company. Department heads must have these skills andthe ability to communicate and lead. Formal and informaltraining is a key element of entrepreneurial success.

Motivator/Morale Builder: There are severalparallels between the entrepreneurial life and marriage. Oneis this: It sounds exciting and glamorous to a newcomer andit is, in fact, exciting and glamorous in the early stages. Butit lasts a long time. If time and familiarity lead to boredomor conflict, the bloom is soon off the rose. Entrepreneurialleaders must consciously work on maintaining the moraleand attitude of employees. One method is activities orprograms. These are fine. The best way is leadership byexample. If the leader’s attitude is good and the workingatmosphere is positive, even fun, the odds of a positiveemployee team are much higher. The leader must also beaware of factors, from rumors to disruptive employees, thatthreaten company morale and must be willing to moveswiftly to eliminate those negatives.

The leader must wear many hats. Many are crucialto success.


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1. Can you visualize yourself as an effective leader?

2. Are your communication skills good? If not, are you willing tofind ways to improve them?

3. Why is vision so important as a leadership quality?

4. Does it make sense to you that “the boss isn’t really the boss”in many situations? Regarding customers? Regardingemployees? How/why does this happen?

5. How do you handle crisis problem solving? Mediation ofdisputes?

6. Are you, or can you become, tough enough to make difficultdecisions such as disciplining or terminating employees?

7. Are you an effective teacher, including having patience as

required?

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Chapter 8

Can You Sell?

Entrepreneurial selling has two broad categories.You can probably survive without handling one of them,but probably not both.

1. Marketing-related selling. This processinvolves advising prospects of the existence of yourbusiness, drawing them close enough to potentially transactwith you, then inspiring them to part with their cash. It maybe as simple as locating your hot dog stand near a crowd. Itmay be as complex as national advertising, a website, 800phone inquiries, and face-to-face selling. There are athousand variations and, for the most part, the skill-setrequired to conduct this kind of selling can be hired. So apotential entrepreneur who “couldn’t sell water to a thirstycamel-owner” can probably develop a business idea and/oran employee group that allows a talent gap in selling to beminimized. (As an aside, it is my personal advice tobecome a good salesperson within your own business, evenif you’re uncomfortable with the process. It is the best wayto understand the client’s needs and the competitivemarketplace. It allows you to directly gauge yourcompany’s ability to fulfill customer need. But, again, anintelligent entrepreneur can probably survive without directcustomer selling.)


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2. Leadership-related selling. The previouschapter discussed leadership. It may go without saying thatleadership is a form of selling, but in case it doesn’t, let’sstress it. When you sit down with a potential investor, youare selling. When you interview a high-potential prospectto fill a key employment role, you are selling. When youtell the IRS auditor that your intentions were pure eventhough certain aspects of your bookkeeping system fellbelow his standards, you are definitely selling. When youdiscuss a new project with your banker, you are selling.When you explain a sub-par financial report to your bankeror investors, you are selling. The previous chapter’sexamples, such as guiding your employee group through adark period, certainly involve selling.

The list could go on, but hopefully the point is clear.The entrepreneurial life, in the vast majority of venture-types, involves ongoing selling.

If this notion is frightening, there is good news. Thenecessary skills can be developed if you work hard enoughat them. Here are some of the elements:

Knowledge: If you are a true student of yourindustry and your enterprise, you have the first ingredientfor leadership selling. Know the trends, and the technology.

A Well-Defined Strategy: If you combine industrysavvy with an articulate company strategy, you areprepared for many of leadership-selling’s challenges. Yourbanker, for example, will forgive a mismatched suit andnecktie…maybe even some “uhhs” and “aint’s” if it is100% clear you understand your industry and your

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company’s emerging role. At a minimum, this strategyshould include a written mission statement and a writtenmulti-year plan.

Reasonable Communication Skills: Leadershipselling does not require great good looks or high oratoricaltalent. It does require the ability to communicate clearlyand it is helped mightily by smaller touches such as a firmhandshake and good eye contact. These skills can bedeveloped by practice and by programs such asToastmasters. For many entrepreneurs, the best teacher is atrusted mentor. Accept honest assessments and constructivecriticisms and work hard to improve.

Positive Attitude: Perhaps by definition, a positiveattitude is a key ingredient in leadership selling. If youconvey doom and gloom, who will follow? If you maintainand communicate a buoyant, positive outlook, your attitudewill be infectious, whether you are dealing with investors,prospects, employees or bankers. (Grizzled entrepreneurswill quickly point out, particularly in regard to bankers, thatbubbly optimism will go only so far. You’d best have afolder full of good information as well. But good bankershave a sixth sense for negativism. So, even in that arena,your attitude is a key.)

One of American business’s great examples ofleadership selling was the Lee Iacocca turnaround ofChrysler. He first convinced a virtually defeated employeegroup that they could be winners again. He convinced thegovernment that bailout money would be a great


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investment in America. He went on television andconvinced consumers that buying a Chrysler car madesense. (And no one ever accused Lee of having the suavegood looks and mannerisms of the typical TV pitchman.) Itwas an amazing piece of leadership selling.

As I write these words, Bill Gates, foundingentrepreneur of Microsoft is proving that leadership sellingcan be a key role for the E. He probably started businesslife assuming himself a techno-person. As he faces themultiple challenge of communicating with lawyers, judges,clients, shareholders and TV commentators, he is certainlyselling today.

Successful entrepreneurs almost certainly cannotavoid—and should become good at—leadership selling.

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1. What is the difference between marketing selling andleadership selling? Can you do both? Can you leadershipsell, or envision learning to handle it?

2. What are other examples of leadership selling beyondthose covered in the chapter?

3. Why is knowledge so important in leadership selling?

4. Which is more important: communication skills orattitude? Where do you stand regarding both? Will youtake steps to improve if necessary?

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Chapter 9

Are You Basically Honest?

I considered not including this chapter for tworeasons.

It is not the purpose of this book to discuss (or topreach) business ethics or corporate responsibility. We’rehere to discuss whether you are cut out for theentrepreneurial experience, not whether you will donate10% of your profits to charity.

There are, undeniably, financially successfulentrepreneurs who don’t get hung up on old-fashionednotions like honesty. Therefore, I can’t argue that, unlessyou have it, you shouldn’t become an entrepreneur.

Despite these reservations, I include this chapterbecause it has practical implications you should consider.

The subject of honesty applies to many parts ofentrepreneurial life. Probably the most obvious issue is taxcalculations. Your business may be required to collect andremit sales tax. It will definitely be required to reportrevenues and expenses for income tax calculations. There isongoing opportunity to under-report income or overstateexpenses. Business cartoonists routinely depict a sweatingbusiness owner trying to explain that the fur coats weredoor prizes for the Cancun sales conference. I will notmoralize on this subject, but there are definitely reasons toconsider the business habit of 100% honest taxcalculations.

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You don’t have to expend mental energy

developing the systems required to conceal the truenumbers.

You don’t live in fear of an audit. If you do havean audit, you won’t have to go through convoluted stepslike a guy I knew who took the washer and dryer out of hishouse and installed them at his retail shop the night beforehis audit.

You don’t live in fear of doing jail time or beingrequired to repay hefty tax obligations plus interest andpenalty.

You don’t live in fear of an “in-the-know”

employee becoming disgruntled and turning you in. We’lltalk more about the employee impact of dishonesty in amoment.

In many businesses—printing as a classicexample—there are ongoing honesty issues in customerinteraction. Examples include sub-par quality, which mayor may not be noticed; under-delivery of expected quantity;accidental over-billing; and receipt of overpayment due tocustomer error.

Every business faces the issue of “what to say to anirate customer.” If an employee runs into your office andsay, “Holy cow, boss, I just found this work order behindthe Coke machine, and the job was promised for deliveryyesterday,” you have an interesting dilemma. There is noquestion that you’ll fail to hit the deadline. There issubstantial question about the way you explain theproblem. One option is to call the customer and out-and-outlie: “John, I can’t believe it, our material supplier’s truckwas hijacked and is being held hostage in the Everglades. I


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can’t get a new shipment for at least two days.” The otherextreme is unvarnished truth. “John, one of our employeesis such a meatball that he dropped your work order behindthe Coke machine. The only good news is that somebodyfound it at all.” Again, we won’t moralize, but out-and-outlies carry a very real risk, namely that they will bediscovered to be lies. In a purely statistical sense, acompany that allows a culture of lies will be caught inthose lies occasionally. The downside in terms of lost trustand potential liability can be immense. On the other hand,common sense says that an aspect of leadership selling is toexplain the situation in its best possible light. “John, I’mpersonally embarrassed about this. We had a mix-up in ourscheduling process that is going to delay your job for atleast two days. Is there anything I can do to help you untilthen?”

Note that both the tax issue and the customer issuelikely involve employee knowledge of untruth. Even ifthere is little risk of employees revealing deception, there isa powerful danger in employee awareness. Simply stated,dishonesty begets dishonesty. If the boss lies, theemployees will lie. If the boss cheats, sooner or later theemployees will cheat. And if the corporate culture allowsdishonesty, eventually the company itself will be theexploited rather than the exploiter.

In my experience, the most powerful argument forentrepreneurial honesty is the example it sets foremployees.

Let’s look at one final honesty issue that is againrelated to employees. There is a nonstop tug between youremployees’ goals, particularly for more compensation and

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benefits, and your goal of keeping the business afloat andprofitable. Many entrepreneurs slip into the habit of“promises” that temporarily resolve the conflict by assuringthat something will happen at some point in the future. Ifthose promises are sincere, they are survivable, even if theycan’t be kept for mutually understood business climatereasons. But employees have long memories, and a habit ofbroken promises will ruin attitude and eventually lead tolost employees. It is far better, though tougher, to be frank,open and honest in the initial meeting: “Mary, I wish Icould assure you that you’ll get that raise within 3 months,but I just can’t right now. We’ve got to get some toughproblems that must be solved. There’s definitely a chance,but I just can’t promise anything right now. Can you workwith me on that basis?”

To summarize: For most entrepreneurial ventures, aculture of honesty is important. Your company’s culturewill reflect your personal beliefs and practices. Examinethem carefully.


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1. Why does a habit of dishonesty involve stress and hardwork?

2. Does it make sense to you that “dishonesty begetsdishonesty”?

3. Does it make sense to you that the law of averages worksagainst the dishonest?

4. If caught in a difficult situation with a customer, is yourinstinct to tell the truth tactfully or to hide the truth as bestyou can?

5. Is there a difference between unkept promises casuallymade and out-and-out lying? In your mind? In theemployee’s mind?

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Chapter 10

Can You Analyze Objectively?

This chapter and the next are closely related. Herewe’re talking about objective evaluation—the process ofgathering information and reaching correct conclusions. Inthe next chapter we’ll talk about decision-making—theprocess of taking your conclusions and implementing themin the day-to-day operation of your business. To illustratethe difference, let’s consider a couple of examples we canall identify with.

It’s about 1984. The personal computer revolutionis gaining momentum. You hear about a company calledMicrosoft. You study the industry. You study Microsoft. Ifyou concluded that Microsoft had its finger on the pulse ofthe market and would experience explosive growth, youcan lay claim to being a good analyst. If you picked up thephone, called your stockbroker, and picked up a fewhundred shares, you can claim to being a good decisionmaker.

I had a similar personal experience at Graph Expo,wandering around in the basement of Chicago’sMcCormick Place in fall 1984. I discovered desktoppublishing. Soon I discovered a little company calledApple. I returned home and announced, “I’ve seen thefuture of typesetting in the printing industry” (greatanalysis). However, I didn’t buy Apple stock (pitifuldecision making).


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There are hundreds of examples of the difference inentrepreneurial life.

You suspect that an employee is not doing the job,but is skilled at covering up his weaknesses. You gatherfacts through observation, study of performance sheets, anddiscussions with customers and fellow employees. Indeed,your suspicion is confirmed (good analysis). But threeyears pass, and somehow the employee has not been firedor forced to make major changes and improvements (poordecision-making).

A single customer calls you and says, “I’d definitelybe interested in your widget if it was available in limegreen.” She further suggests that others might feel the sameway. You quickly conclude that this customer’s desirereflects the wider marketplace. You add lime green to yourline and fill a substantial corner of your warehouse with thenew selection. Three years pass and the lime has turned todust (poor analysis, goo —or at least emphati —decision-making).

For the entrepreneur, there is good news and badnews on the subject of objective analysis. First the badnews: Many of the traits that are typical of successfulentrepreneurs lead down the path of poor objectiveanalysis. The person who is, for example, daring, bold anddecisive, is often a bit opinionated and overly confident.Opinionated and overly confident are, of course,euphemisms for what acquaintances and employees willdefine as something like “pompous, know-it-all windbagwho doesn’t give a hoot what anyone else thinks.” (Theirdescription may be even more colorful than that.) The good

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news is this: With concentrated effort, it is relatively easyto modify pompous windbag behavior. You can—andprobably MUST—improve your objective analysis skills.

There are two main keys.First is simply an attitude that creates a process.

Too much business analysis takes place in 100% violationof the principle of scientific method. Let’s use our exampleof the employee we suspect to be under-performing. Alarge percentage of entrepreneurial cowboys will mentallydecide that the employee is underachieving, then set aboutconfirming the suspicion. The process is prosecutorial, notanalytic, and likely wastes whatever time and energy itconsumes. The correct attitude is something like this:

• It is a one of my jobs to evaluate employeeperformance.

• It is critical that I analyze performance that Isuspect may be sub-par.

• But, in a fair process, I will learn one of threethings: performance is actually above expectation;performance is at expectation; or performance isbelow expectation.

• Here is a fair process for discovery: (a), (b), (c).• Here are fair, non-leading questions I’ll ask of those

whose opinions I need.• Here is a fair process of receiving direct input from

the employee involved.

Revisiting our warehouse full of lime greenwidgets, the analytic process was nonexistent. A customerplants a seed in an opinionated entrepreneurial mind. The


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seed somehow grows and becomes 10,000 non-marketablewidgets. The right attitude is this:

• I wonder if other people want lime green widgets. Ifso, it might add excitement to our product line. Ifnot, we sure don’t want to tie up dollars in poormerchandise.

• Here’s a market research process that will let medecide (a), (b), (c).

In my opinion, the second key is willingness to

involve others in the analysis process. In my earlyentrepreneurial career, I was a classic lone wolf—chiefanalyst, decision-maker and day-to-day manager. As ourbusiness grew, it became necessary to develop a set ofdepartment heads. Their original purpose was to assist inday-to-day operational management. In the late 1980s andearly ’90s, I made a few strategic errors which caused meto say, “Hmm, Mr. Lone Wolf, if you know so much, howcome you’re losing your fanny on the last three majorprograms you’ve launched? I wonder if the input of othersmight help?” So I declared our department heads to bemembers of “staff” and pledged to present all key strategicinitiatives at weekly staff meetings. I also empowered staffmembers to bring their concerns and observations aboutmatters I might be overlooking. The results wereremarkable, leading to bold changes and majorimprovements. Note these key points.

The involvement we’re talking about here is notnecessarily decision making. As entrepreneur, you havelikely borne far more financial risk and carry more long-term responsibility than any other member of your

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company. Most high-level strategic decisions should beyours. But the involvement of staff can be an importantcontributor to objective analysis, helping you better see thekey issues from multiple angles.

Empowering staff requires you to relinquish someego. You must say, and mean, “Team, if you think I’m fullof hot-air, you are now duty-bound to tell me so. I may notlike it. I may even argue with you. I may even pout for awhile. But I’ll respect you for challenging me and willnever hold your openness or honesty against you.”

Three final points on objective analysis:To the extent possible, it should be numerical.

Good entrepreneurs don’t need three semesters of calculus,but it sure helps to be comfortable looking at numbers.Over the years, I’ve heard horror stories like the restaurantthat, as it was being closed, was declared to have had “somuch overhead there was never any hope of making aprofit.” That issue should have been analyzed, numerically,before the multi-thousand dollar chandeliers were everpurchased. You will need good numerical analysis to planwhere you’re going and to measure how you’re doing.

The analytic process must be consistent with the

magnitude of the decision. Some entrepreneurs are sofearful of making an error that they often over-analyze.We’ll talk more on that subject in the next chapter. Ingeneral, you should never spend more on the analyticprocess than you might lose if you err.

You must not spend more time than the relevant

“window” for your decision.


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Again, of all the chapters in this book, you’ll findnone more important, nor more learnable. A pattern of pooranalysis will likely assure entrepreneurial shipwreck,eventually; but if you will, you can learn to become a goodobjective analyst.

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1. What is the difference between emotional and objectiveanalysis? Between opinionated and objective analysis?

2. Why are many entrepreneurs temperamentally unsuitedfor objective analysis?

3. Does the idea of “pre-defining” a process of objectiveanalysis make sense to you?

4. Are you comfortable enough with numbers to find wayshelp your objective analysis?

5. How can employees help the process of objectiveanalysis?

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Chapter 11

Are You Decisive?

The entrepreneurial experience is an ongoingexercise in decision-making. Some decisions are large,most are small, but they come at you nonstop. Here is arepresentative sample:

• Does this new product idea fit our business strategy?• As conditions change, how will our strategy change?• What vendors will we use?• When do we change a vendor? Under what conditions?• What new vendor should we use?• Is this customer complaint reasonable?• If the complaint is valid, how much financial

adjustment is the customer due?• If the complaint isn’t valid, how will we diplomatically

discuss it?• What advertising media should we use?• What frequency of advertising?• Should we do our own creative work or hire an outside

source?• Should I intervene in an employee squabble or let them

fight it out?• Should I reprimand this employee?• Should I fire that employee?• A competitor is trying to lure my employees away.

What should I do?

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• How much authority should I delegate to employees?• What quality control system will resolve recent

problems?• Our competitor is offering special discounts. Should we

match them?• We can only meet one of two deadlines. Which

customer’s wrath am I willing to risk?• How should I prioritize my

—Day, week, month or year—Investment dollars—Employee resources

• Should I have an employee dress code? If so, what isreasonable?

• Is it time for an employee manual? If so, what will beour key policies?

• Is the behavior of an employee too close to harassment?What shall I do?

The list of issues will vary by type of business, butcould be enormous.

Entrepreneurs leave big companies for manyreasons, but a common gripe is “Our decision process wasso long, it drove me crazy. I want to be able to makedecisions and get on with it.” That motive is fine, but itcarries with it a premise that better be true: “I am a gooddecision-maker.” Some people are brought to theirdecision-making knees by a two-page restaurant menu or asizable assortment of neckties or scarves. That’s not a goodsign. The entrepreneurial experience will be absolutely nofun, and likely unsuccessful, for the person who is


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paralyzed by decision-making or, worse, breaks out inhives during the process.

As in most categories throughout this book, you canlearn and improve. The best way to improve decision-making is to practice; and, without question, through timeyou can improve the speed, accuracy and comfort level ofyour decision-making. However, if decision-making islikely a major problem for you, I’d suggest finding ways topractice before launching an entrepreneurial career. Onepossibility is a part-time business. There are also sports,board games or computer games that involve decision-making. It is crucial to become comfortable with thisprocess.

One key is attitude. People tend to run from

decision-making because of fear. I’m no psychiatrist, butI imagine much of the fear is rooted in insecurity, probablycaused by the reaction of parents or friends when early-lifedecisions weren’t so good. If can be hurtful to your self-concept if mental tapes replay “Billy, the forecast was for18 inches of rain...I’ll bet you were the only kid at schoolwithout a raincoat,” or “What in the world were youthinking about when you put that shirt on with those slacksand socks?” Even if fear isn’t rooted in distant scars, thereis the practical issue that most decisions carry thepossibility of being wrong. Wrong can be embarrassing,expensive, even fatal if the issue is large enough. Fear canparalyze the decision-making process.

Although the “Babe Ruth” analogy (pretty fairhome run hitter but also strikeout king) has been overused,it is highly relevant. It is 100% necessary to realize that

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playing the entrepreneurial game will involve hits, runs,strikeouts and errors. You try to improve your average, butyou don’t make a hit every time and, occasionally, youswing and miss by a mile.

The concept of "timeliness" is an important

element. Many entrepreneurs recall early days when thebusiness was small, the phone wasn’t ringing, and thingswere “slow.” During that period, you can get away with atwo-hour meeting to select office wallpaper. But don’tmake it a habit. As your business builds, the decisionscome faster and become bigger. You must analyze anddecide within the relevant timing window of each decision.Sometimes this means deciding before you are able tocomplete all the analysis you’d like to have. As a real lifeexample, let’s say a customer calls for a price quotation andmust have your number by tomorrow morning. It’s a good-sized job, but it involves knowing some material costs.Your vendor can’t give you a price until tomorrowafternoon. Clearly the window of opportunity is short andkey information isn’t available. You select your decisionfrom these:

• Call and ask for more time—it is probably forlornbut perhaps worth a try.

• Let the customer know you must pass because thejob is too large to quote without material pricing.

• Make an educated guess about material pricing andhope for the best.


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Entrepreneurs in busy businesses may make tensimilar decisions between lunch and tonight’s PTAmeeting. The attitude must be this:

• I’ll understand the decision and its timing window.• I’ll prioritize this decision with others I must make

in the same time frame.• I’ll gather all possible “objective analysis” data I

can within the timing window.• I’ll make a decision, and I’ll move on.• This decision may be right, may be wrong, or may

be somewhere in between. If it’s wrong enough thata problem is created, I’ll deal with that problem.Hopefully, though, it’ll be OK and I’ll move on tothe next decision.

It is arguable that a key difference between trulysuccessful entrepreneurs and their lesser counterparts israpidity of corporate decision-making (your decisions plusthose of all empowered associates). If one company makes20 decisions, 17 of which are right, in the time anothercompany makes four decisions, I’d bet on the guy with 17right.

An underlying theme of both objective analysis anddecision-making is priority setting. A busy entrepreneurcannot finish every task on the “to do” list, cannot secureevery fact that would be helpful, cannot take as long ondecisions as would be ideal. In many respects, prioritysetting is the most important decision you make. Shouldyou deal with an established account’s minor problem orprepare an involved job proposal for a prospective newaccount? Should you solve an employee’s problem before a

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customer’s problem? Can you find time to make key long-term decisions despite the nonstop barrage of short-termdemands (the tyranny of the urgent)? Effective prioritysetting—particularly assuring a balance between long- andshort-term issues—is a key attribute of the effectiveentrepreneur.

As you consider an entrepreneurial life, the questionis this: “Am I, or will I work to become, a solid objectiveanalyst, a sound decision-maker, and an alert prioritysetter?”


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1. What is the difference between analysis and decision-making?

2. Are you a comfortable decision-maker in general?

3. Are you able to make decisions without all theinformation you wish you had?

4. Does the concept of “maximizing your company’sdecision count” make sense?

5. Can you prioritize decision-making and attack theimportant ones first, even if they're much tougher tohandle?

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Chapter 12

Do You Have Personal Discipline?

Discipline is a tough issue for many entrepreneurs,partly because they are, characteristically, rebels against it.Typical sentiments are these:

• “I absolutely hated someone looking over myshoulder from 8 to 5.”

• “In fact, I hated having to be there from 8 to 5 in thefirst place.”

• “My former company had enough proceduremanuals to stock a good-sized library.”

• “I had a boss who was so ‘by the book,’ I swore I’dnever pummel employees with a bunch of strictrules and guidelines.”While these kinds of sentiments might motivate you

toward the entrepreneurial life, here is an annoying truth:Unless you have considerable personal discipline and canenforce discipline on your business operation, you’ll havemajor ongoing problems.

Personal Discipline

The requirement for personal discipline operates atseveral levels—some obvious, some not. One of the greatentrepreneurial fantasies is that “I can set my own hours,work when I want to.” In a literal sense, that’s true, butmost business start-ups require an immense infusion oftime and energy. If not yours, whose? Many business start-


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ups require the doors to open at a certain time. Othersrequire considerable detail work before or after thecustomer contact period. Almost every start-up requiresintense study of methods and procedures, monitoring ofeffectiveness, revision of things that aren’t working well.There is likely a strong need for involvement in themarketing process. Unless you are one of a very fortunatefew, your start-up will take a great deal of concentratedwork and effort. And the hard-work news may not getbetter. As most businesses grow, they require more, notless, attention. It is likely crucial to have the personaldiscipline to start early and work late, even when you’re theboss.

A related personal discipline issue is the exampleyou set. As your business adds employees, they will look toyou for leadership. They will be greatly influenced by yourstyle, work ethic and business ethics. I have greatadmiration for entrepreneurs who can golf three afternoonsa week while their employees work mightily back at theshop. There are some who reach this milestone, and aswe’ll discuss in the final chapter, one of the benefits ofentrepreneurial life is the chance to define and construct agoal-lifestyle. But this opportunity is usually earnedthrough intense hard work, including instilling—byexample—a strong work ethic in your organization.

Operational Discipline

In my entrepreneurial life, realization of the needfor operational discipline arrived later than it should have.The problem related to personal weaknesses, specificallythat I dislike administration, rules and procedures. My goal

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structure definitely included freedom from the regulationbook. I wanted to soar like an eagle, not be bogged down ina thousand humdrum details. The problem, of course, isthat successful businesses soon generate a thousandhumdrum details. It may be acceptable for the entrepreneurto say, “I’m not going to do all that detail work personally.”But the leader must say, “I realize that excellent executionof detail is crucial. I’ll hire people and build aninfrastructure which will assure this excellence.” Eachbusiness has a unique set of critical details, but likelyamong them are these:• Accurate preparation of invoices with some kind of

double-check for accuracy• Careful handling and accounting of incoming cash• Accurate logging of receivable and intense monitoring

of overdue accounts• A well-controlled purchasing system with careful

checking of invoices• Secure, tightly controlled inventory and supplies• Quality control of production process• Accurate and thorough shipping capability with filed

proof of delivery• Monitoring of employee time records and all aspects of

payroll• Excellent tax compliance procedures• Excellent financial reports including performance vs.

plans and budgets• Auditing procedures that would detect theft by

customers or employees• Control systems that have considered the possibility of

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• A clear, complete employee manual that coversphilosophy of doing business as well as operating rulesand disciplinary procedures.

• An appropriate new employee training system• An employee evaluation system that encourages growth

but clearly identifies unsatisfactory performance

It is not important that you personally have thenecessary skill to develop and oversee these functions. It iscrucial that you have the personal discipline to realize theirimportance, to secure the talent necessary forimplementation, and to absolutely insist that procedures bedeveloped and followed. It’s probably fair to say that thedegree to which you enjoy (long term) the entrepreneuriallife will depend on your success in instilling operationaldiscipline. A “loose” organization will provide ongoingterror as you struggle with crisis, wonder where the moneyis, and generally try to ride herd over employees who maybe running a hundred different ways. A well-disciplinedteam will work together to serve customers according toyour philosophy and control the business operationaccording to your guidelines. When you get that team puttogether, you can definitely think about a few rounds ofgolf.

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1. Why does the entrepreneurial spirit often rebel againstorganizational discipline?

2. Do you have the personal discipline to invest the timeand energy needed for successful start-up, particularly ifthe time and energy requirement is much more than youanticipated?

3. How does building “infrastructure” fit into the processof building a successful business?

4. Do you have the kind of discipline and toughness toassure that procedures are developed and followed?

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Chapter 13

Can You Delegate?

The subject of delegation-skill is similar to ourchapter on honesty: You can definitely be anentrepreneur—even a highly successful entrepreneur—anddelegate relatively little authority. However, the subject hasenormous impact on your lifestyle, both inside and outsidethe business.

In simplest terms, delegation is the process ofempowering employees to make certain decisions. Duringthe first days and weeks of a business start-up, theentrepreneur is likely involved in major strategic issues andoperating details such as the brand of corporate toilet paperand air freshener. As the business expands—and the dailydecision-count expands—you begin facing the question ofwhether to hold tight to all decision making or to delegate.

In my company, the decision to establishdepartments (customer service, graphic design, pre-press,printing, bindery and mailing in our case) withcorresponding department heads was the point-in-timewhen a great deal of formal delegating began to happen.Here are examples of authority/responsibility that shiftedfrom my office to the department heads:

• Daily production scheduling• Execution of quality control procedures• Approval of vacations schedules• Recommendation of equipment purchases

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• Coordination of routine maintenance programs• Development and execution of training methods• Evaluating employees—both daily performance

analysis and annual reviews

An entrepreneur who elects to delegate often goesthrough two stages. Phase one involves continuing topersonally set up policy and procedures, but delegatingtheir implementation. In phase two, empowered employeesare allowed to both develop and implement the policies andprocedures.

For example, in my early days of delegation, Iwould likely decide on our quality controlprocedures—issues such as percentage of press sheets topull, inspection protocols, and documentation requirements.The department head was expected to execute theprocedure without my direct involvement unless there wereunusual difficulties. Today I expect our productionmanager to both establish and implement quality controlprocedures.

My personal choice has involved a great deal ofdelegation. However a roomful of successful entrepreneurswould likely debate fiercely the whether, when and how ofdelegation. Here are some of the issues:

“I want to know that my plans are being

executed and my standards maintained.” This conceptargues against delegation and is the strongest point ofhands-on entrepreneurs. A good friend of mine became avery wealthy man building a publishing business in whichhe was extremely hands-on: personally selecting book


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titles, cover designs, rollout strategies, etc. I’m not sureabout their brand of air freshener, but I wouldn’t beastounded to learn he was on the approval route. He admitsto occasionally slowing down decision processes (vs.employee desire), but he argues that the quality ofcorporate decision-making justified the slowdown. Hisfinancial success is undebatable. Obviously he was willingto work long and hard to execute his strategy.

“I just don’t trust people to do the job like I

would do it.” This notion also argues against delegation.Every entrepreneur can tell war stories of employees whodid spectacularly stupid things. Others have been bitten byemployee dishonesty. But distrust is an uncomfortableemotion, and an entrepreneurial lifestyle centered arounddistrust will likely not be much fun. To counter thisargument philosophically, you must say, “I knowemployees will occasionally let me down, but I have faithin my ability to find, train and build a quality team. I’mwilling to absorb the occasional problem, knowing that, inthe long term, I’ll be surrounded by a group of strongprofessionals.”

“People cost money. I’d rather work a little

harder and keep more of the money for myself.” Thisargument makes some sense and, depending on thedemands of things like kids, clothing, braces and college,has likely inspired every entrepreneur now and then. Thedownside is longer hours, more pressure and limitations oncorporate growth.

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“I’m going to delegate so I can play golf and

party.” This is delegation’s weakest argument if it reflectsan underlying laziness. It is fine if the entrepreneur isrealistic about the team-building effort that lies betweenhere and the country club—hiring, training,communicating, and monitoring.

“I must delegate to minimize the impact of my

personal weaknesses.” This is the most straightforwardargument on behalf of delegation. If, for example, anentrepreneur is a pitiful detail man whose desk looks likeHurricane Hortense spent the afternoon on it, he is illserved to cling tightly to the execution of minute detailssuch as bookkeeping.

“I must delegate to grow the business.” The issueof delegation is related to corporate strategy. Hang on tightwhile we navigate a complex thought. My friend’spublishing business got considerable leverage from hishigh-level decision-making. When a book is conceived andits production and marketing strategy are finalized, a set ofwell-understood procedures follow, many of them providedby vendors and other independent businesses: type-houses,printers, publicists, and booksellers. A successful bookinvolves excellent leverage of management’s time andeffort in terms of dollars in the marketplace. Otherbusinesses have extremely high transaction counts perdollar in the marketplace. My commercial printingoperation, for example, has something like 100 active jobs


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at all times. Average revenue per job is about $600. Eachjob may pass through as many as five departments. And theaverage turnaround is less than one week. In my case, atleast in my opinion, it was imperative to delegate in orderto grow. If I chased detail for each of my 100 active jobswith the same intensity that my publishing friend chasedeach of his titles, I would soon lie exhausted atop a skid ofpaper I was checking for defects while ordering ink on mycell phone. In other words, our leverage of managementeffort is extremely low on a “per-project” basis. Yourstance on delegation will be impacted by your business’sstrategic attributes. (Feel free to email CorbinGroup.com ifthis thought could use a bit of clarification!)

Some businesses, as they grow, create a physicalrequirement for delegation. For example, multiple locationsmay be involved. Others create an organizationalrequirement. If, for example, your business has a salesteam, you may be able to manage eight sales people. Toeventually grow to 80, you’ll almost certainly need todelegate.

“I must delegate for lifestyle and peace of mind.”

This argument relates to a hidden danger of entrepreneuriallife. Some entrepreneurs become addicted to the adrenalinerush. Some are, or become, workaholics. The bottom linecan be long hours and mental preoccupation. Sadly, ourroomful of entrepreneurs may fall into an “I haven’t had areal vacation since...” discussion, and you might well beappalled at what you’d hear. A related danger is burnout.People looking at the entrepreneurial life from the outsideoften say, “Wow, it must be exciting every day compared

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to my boring job.” For many of us, that is true, but beingshot at by machine guns is also exciting compared to theirboring jobs. Over time, excitement—which is often intensepressure and problem solving—can lead to burnout.Building an employee team that can run your business likeyou would run it provides the best chance for a bit oftranquility, not to mention two weeks in Cancun.

“I must delegate to eventually get out of here.”

This issue is much longer term, but is relevant to anybusiness that is (or even appears to be) tied to the talents ofone person. It’s obvious that Renee’s Interior Design willstruggle some without Renee. It’s less obvious, but likelytrue, that Acme Widgets and More will be useless if itsowner has made every decision in the last 35 years and itsemployee team would collapse like a house of cards if shedeparted.

Of course, you must weigh this issue against yourphilosophy and lifestyle goals. If you are a non-delegator,then you must be willing to pay the price of harder work,longer hours, less flexibility and impact on your life outsidethe business. If you are a delegator, you must be sure yourmotives are right and you must be willing to pay the priceof fully training and equipping employees to handle theresponsibility you give them.

A non-delegating control freak who also insists onfour weeks of vacation a year is likely not cut out for theentrepreneurial life. A casual, basically lazy delegatorprobably isn’t either.


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1. Is your basic style “hands-on” or will you prefer todelegate?

2. When does delegation make sense? When is it risky?When is it wrong?

3. If your style is hands-on, are you willing to adapt yourlifestyle to the demands of a growing business?

4. If your style involves delegation, will you carefullyassign responsibility and authority and patiently teach asnecessary?

5. Are you willing to absorb inefficiency and financial lossduring the learning curve of employees to whom youdelegate?

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Chapter 14

Are You Flexible?

Flexibility is not an entrepreneurial start-uprequirement. It is likely a long-term survival requirement.A working definition of flexibility is the ability to identifyemerging trends that will affect your business and adapt,through necessary changes, to those changes. Flexibilitymay be necessary at several levels:

Strategic: Corbin entrepreneurial roots go back to1902 when my grandfather founded his small-town grocerystore. He built a thriving business and became a leadingmerchant in his community. In the 1940s, relatively late inhis life, the supermarket came to town in the form ofKroger and A&P. Across the country, thousands ofindependent grocers were forced out of business by thechain store’s combination of buying power and marketingclout. Some businesses survived by forming alliances; IGA(Independent Grocers Association) was one example. Mygrandfather survived by adopting a niche strategy,converting his focus to supplies for farm and garden.

Emerging competition is the most likely trendentrepreneurs must fact. Changing consumer taste isanother example. Products such as western wear, athleticapparel, entertainment, or food and drink experienceenormous popularity shifts through time. It would be fair tosay that an entrepreneur basing a start-up on a current fad


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had better be extremely flexible or should hang onto thatday job.

Technological: Some businesses are vitallyaffected by the latest changes in computer speed or Internetaccess. Others feel little impact. Usually the key issue iscompetition. If there is emerging technology that willgreatly affect efficiency or customer service, you need to beaware and involved. A simple example is the fax machine.In the mid-1980s, the fax was a novelty. By the early1990s, it was an absolute necessity for many businesses andan important sign that a business wasn’t clueless for almosteveryone. Internet access and involvement is following asimilar path.

Social: From the mid-1960s on, America hasexperienced powerful social trends. Some, such as thelength of hemlines, have simply been interesting to watch.Others have had profound effect on entrepreneurs. Themost obvious examples are equal rights and sexualharassment. There are grizzled old entrepreneurs who arefiguratively (maybe literally in a couple cases) behind barsfor behaving in 1999 pretty much like they did in 1975. It isdefinitely not the purpose of this book to moralize aboutwhether the good old days or the turbulent new days arefairer or better. This book simply says, if the times change,you must (1) recognize the change and (2) adapt yourpersonal and business behavior appropriately.

Flexibility needs to be tempered by good judgment.Entrepreneurial knee-jerk can be as destructive asinflexibility. If the company rushes off toward every new

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trend, buys every speculative piece of new technology, andissues brand-new dress codes every time a firebranddelivers a political speech, you will have chaos, confusionand likely ruin.

Flexibility is an interesting combination of personaltrait and intellectual exercise. If my wife and I eat out,she’ll try something new just to try it; I’ll choose somethingI like because I know I like it. I tend to keep old cars andclothes. She likes new things. At some psychological level,she is probably much more flexible than I am. My old-shoetendencies, if applied to my entrepreneurial life, could havebeen fatal. But at the intellectual level, I understand the100% requirement for flexibility. An early business mentortaught me “the power of the trend” and I have become astudent of trends. I’ve also personally experienced powerfulforces of change at all three levels: strategic, technologicaland social. Through an analytic vs. emotional process, Ihave become entrepreneurially flexible.

Whatever it takes to find flexibility—find it! Thisone seems 100% crucial.

Note the powerful interaction of three of our lastfour chapters. Successfully building for the future involvesthese qualities: objective analysis, decision-making, and

flexibility. Flexibility is involved first, and then last—thewillingness to consider change followed by the willingnessto implement change. Objective analysis is clear-headedstudy of the trends that will shape our company and ourmarketplace. Decision-making is the process of turning thattrend analysis into concrete plans. An oft-told example isthe buggy whip industry circa 1908. The horseless carriage


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had arrived. Some ignored the issue totally: “We are buggywhip manufacturers. Always have been. Always will be(inflexible).” Some misread the trend: “These loud, smelly,unreliable chunks of iron will never replace the horse (poorobjective analysis).” Some thought they’d be OK. “OK,even though the auto will play a role in transportation, therewill always be a buggy whip industry (poor decisionmaking coupled with inflexibility).” But some said, “Ourfuture is changing. We are really in the business ofproviding accessories for people-moving vehicles. Let’slearn to manufacturer spark plugs or tires or shockabsorbers.” Great fortunes were lost or made!

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1. Are you flexible in general, and able to adapt to change?

2. Are you willing to make difficult decisions today,potentially involving considerable time and expense, to beready for emerging changes tomorrow?

3. Does it make sense to you that there is tremendousinteraction among (a) objective analysis, (b) decisionmaking and (c) flexibility in preparing for the future?

4. Give examples of companies that floundered bymishandling one or more of these steps in preparing for thefuture.

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Chapter 15

Are You Willing to Learn & Grow?

Most of us left that last class of high school orcollege and heaved a major sigh of relief. No morehomework, studies, or tests!

Many, maybe most, successful entrepreneurs findthemselves constantly back in school—not a school ofbrick, mortar and frowning professors, but rather a schoolof ideas, knowledge and personal growth.

The most obvious need was discussed in the lastchapter. You must be a student of the trends that affectyour business. Some trends are obvious; some requireintense study. You may be studying to gain competitiveadvantage. You may be studying to assure the survival ofyour business. But you must study trends.

Some of your learning requirement will betechnical, from how-tos in your specific business tolearning new computer software to learning to read afinancial report and numerically analyze various parts ofyour business.

Some of your learning and growth relate toentrepreneurial skills and qualities discussed in this book.You can become a better leader, communicator, anddecision-maker. But the first requirement is strong desire

to improve and the second is willingness to learn and

grow, even if the journey takes you outside your presentcomfort zone.

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There is both comfort and challenge in the idea of alifetime of entrepreneurial education. It is comforting toknow that you can start your own business even though youhaven’t yet acquired the skillbase necessary to run a $5million enterprise. As discussed early in this book, the firststep is just to start. Take a decent idea, get some businesscards and marketing materials, add a major dose ofexcitement and determination, and START! But thechallenge is equally clear. If someday you’d like to run a $5million enterprise, you’ll likely need a $5 millionentrepreneurial skillbase (or risk feeling like a dirt-trackdriver suddenly racing on the Formula One circuit).

Willing to Listen?

The fact you are reading this book is a good sign,suggesting openness to the thoughts and experiences ofothers. This is not a universal trait in the entrepreneurialcommunity. Several of our chapters have touched on ego,usually related to the need to get ego out of the way inanalysis and dealing with others. There is no more tragicexample of excess ego than a new entrepreneur paddlinghis canoe straight toward the waterfall and ignoring allwarnings from those who know better.

Here are some typical examples (there could behundreds!):

• E (the entrepreneur) invests heavily in facilityand product development but has a weak marketing planand little marketing budget because funds are alreadycommitted.

• E spends immense time and energy in very minordetails of the business—squandering precious time that


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should be spent in aggressive sales and marketing.• E has hired a manager whose style is driving off

customers and employees, and he fails to heed warnings.• E has adopted customer policies that are clearly

not competitive in the marketplace…stubbornly clinging tothose policies despite evidence that they arecounterproductive.

• E is a sales type who isn’t oriented toadministration or production; she fails to hire talent thatfills in her personal weaknesses.

Part of the challenge is that business is not science.In science, we can say with virtual certainty that conditionA coupled with condition B will yield result C. Business ismuch less certain. Managers who might reasonably bejudged totally obnoxious sometimes deliver great results.Products such as pet rocks defy all reasonable analysis andbecome blockbuster successes. Clever marketing programsfail. Annoying, in-your-face programs succeed. Businessdefinitely isn’t science. But here’s the trap—an opinionatedentrepreneur can close his ears and mind, because “it’s alljust opinion anyway,” and ignore fundamentals ofbusiness. It is fundamental that a new business have aneffective marketing plan and the dollars necessary toimplement it. It is fundamental that start-up resources,especially time, be carefully invested to assure maximumlift-off for the new venture. It is fundamental that managershave qualities consistent with the beliefs and expectationsof the company and its customers and employees.

Veteran entrepreneurs have a far better grasp ofthese fundamentals, often for the simple reason they’ve

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fallen flat on their fannies a few times by ignoring them. Akey attribute of the new entrepreneur should be an attitudeof open-minded listening to the counsel of those who havegone before.

Looking back over my career—and considering theitems covered in the previous 14 chapters—I wouldnominate personal education and growth as the mostimportant ingredient for long-term success. Indeed, some ofthe education is provided by our old friend Experience. Butshe is a slow teacher. Much of it must be provided byintense effort to improve both skillbase and personalqualities.


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1. Why must skills grow as a business grows?

2. Why can the Peter Principle (people will be promoted totheir level of incompetence) apply to an entrepreneur and agrowing business?

3. What are potential ways to gain skill?

4. Are you oriented to ongoing education in general?

5. Can you listen to others with your ego suspended?

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Chapter 16

Why It Can Be Well Worth the Trip

This book, as promised, presents the entrepreneuriallife without sugarcoating. We’ve discussed risk, challenge,fear, disappointment, and the need to identify andovercome personal weaknesses. We have attacked myths asfundamental as the notion that “I’ll be my own boss.” Whythen would anyone—you or I, for example—become adedicated, lifelong entrepreneur? It’s a fair question, andI’ll do my best to answer it. (I utilized the experiences offellow entrepreneurs throughout the book. Their input wasparticularly important here—helping assure balance vs.100% author-opinion.)

Interestingly, several of the motivations, that inspireus to start entrepreneurial life, aren’t the ones that aresustaining over the years. Let’s look at some of the ideasthat fall by the wayside.

“I’m sick of doing all the work and having

someone else get the profits. If I do the work, I should

get the profits!” There is both emotional and mathematicaltruth in this argument, so it is relevant. The opportunity tobuild a profitable business and enjoy fruits of those profitsis real. But the motivational power of anger about“someone else getting the profits” is short. In fact, manysuccessful entrepreneurs still have the same anger, but thevillain has changed: “I’m sick of working my head off and


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having all the profits wind up with the government or thebankers.”

“I’m sick of a thousand rules and regulations.”

Again, this emotion is relevant, and you can work hard tolimit rules and make them fair, but it is not a sustainingmotivation. Moreover, if you build a substantial business,you’ll probably need a pretty substantial set of rules andregulations to keep it under control, in OSHA compliance,etc. You may even suffer the angst of learning that one ofyour empowered department heads has generated severaldepartmental policies, which sound exactly like the onesyou hated at Big Company, Inc.

“I’m sick of meetings. I’m an action person not a

‘sit around and make politically correct comments by

the hour’ person.” Again, relevant but not sustaining. Infact, I’ll bet that in a few months or years, you’ll have somekind of meeting structure of your own aimed at assuringthat you confront key issues and make key decisions. And,unless you are smarter than I am, some of those meetingswill wander aimlessly for far too long.

“I’m sick of the politics.” This one is highlyrelevant and is related to one of this chapter’s importantsustaining motivations. Corporate politics, disrobed, is theattempt to gain advantage in ways other than objective on-the-job performance. It carries the threat that someonemoves ahead of you, maybe even tramples on you, byclever meeting performance, memo writing or means morefoul. An entrepreneur, almost by definition, selects a career

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path that will be judged by performance. The sales grow orthey don’t. The profits are there or they’re not. You canvirtually eliminate the impact of politics on your personalprogress, but even this topic has an irritating truth: As soonas your employee count hits about three, you’ll havepolitics. You can and should establish a corporate climatethat maximizes the importance of performance andminimizes the role of politics, but you’ll probably havepolitics in your operation, and pretty soon you’ll be “sick of‘em.”

So what are the sustaining motivations? They seemto boil down to four categories, and we’ll look closely ateach one:

• Living your passion• Controlling your own destiny• Building something of permanent, ongoing value• Building toward your ideal lifestyle

Living Your Passion

The possibility of living your passion is a keymotivator for many entrepreneurs. It is barely relevant toothers who have selected businesses that offer more profitopportunity than passion opportunity.

The best possible situation is an entrepreneurialendeavor that is built around a passionate life interest. If achild who loves horses can open a stable and build asuccessful business, she enjoys the possibility of living herpassion. A person who loves teaching may find a wonderfulentrepreneurial career in some aspect of consulting. Ifsports or creative design or the great outdoors is a passion,


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it may be possible to find a business opportunity that allowsyou to live the passion.

Even if your business choice does not directlyinvolve a passionate personal interest—and, of course,most don’t—it is possible to be passionate about theentrepreneurial process. The E process involves elements ofbringing new concepts to life that are extremely rewarding.In almost every meaningful sense, creativity and itsrewards are realized. The day-to-day businessoperation—while sometimes harrowing, frustrating anddisappointing—can be nonstop exciting in a way that addsreal zest to life. Some entrepreneurs confess to a bit ofadrenaline addiction. Others report the same kind ofexcitement that gamblers find at the tables. Hopefully thepassion we can gain from the E process rises aboveaddiction and raw gamblers’ excitement, but it is certainlytrue that few entrepreneurs come home at night and declare,“Well, it was just another boring day at the plant.”

Controlling Your Own Destiny

This motivation is important, and somewhatcomplex. Ideally it would simply involve starting abusiness and building to the point you are a person of suchwealth and power that no force—personal, political orcompetitive—could harm you. If you reach that point,congratulations! Most entrepreneurs never do. In fact,controlling your destiny is a motivation and an objective,not a promise. Here are the key issues:

When we work for someone else, we are part of

someone else’s corporate goal structure. We may have akey ongoing role, but there is some chance that our division

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will be sold or closed or that we will be personally“restructured” to the Dubuque plant or out the door. Ourboss may be a great person of pure motive—or might be apolitical animal who would steal credit for our ideas andhold back potential promotions to keep us working in thedepartment. As an entrepreneur, you establish both apersonal and a corporate goal structure. There are noguarantees that the goal structure will become reality, butyou control the corporate agenda and can assure thatcorporate energy is focused on that agenda.

Entrepreneurs have strategic control as well as

day-to-day control. A simple analogy shows why strategiccontrol is a mixed blessing. Would you rather cross thestormy Atlantic on the Queen Elizabeth or the HMS BillCorbin? Probably the QE, right? But if we substituteTitanic for Queen Elizabeth, the HMS Corbin starts lookingbetter. In my personal career, I’ve definitely seen big shipshit the proverbial iceberg. The Frigidaire Division ofGeneral Motors was almost literally sold for parts. RCA’sConsumer Electronics Division has been on a decades-longcorporate odyssey, bought and sold to various multi-national corporations. At least in terms of ownership andstrategic stability, my entrepreneurial ship has had arelatively smooth voyage since 1975.

But the statistics aren’t comforting on this issue.Something around one-half of entrepreneurial start-upsdon’t survive for five years. Big company numbers areobviously better; and many entrepreneurial failures call toserious question the ability to “control your destiny.” Agiant anchor store leaves the shopping center affecting themany smaller stores that relied on the anchor’s traffic; Wal-


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Mart comes to our little town, affecting the entiredowntown merchant community; the highway is re-routedand traffic by our store plummets; a major technology shiftchanges our marketplace; we are hit by flood or fire. Ifdisasters such as these can befall the entrepreneur, how canwe claim strategic control of our destiny? Because wecontrol the corporate agenda. Again, there are noguarantees, but we can control the effort. If a big companysuffers a fire at a local plant, the headquarters staff maysay, “Well, let’s collect our insurance money and apply theproceeds to the Tennessee plant. This one was sub-paranyway.” The entrepreneur can decide to rebuild. If we arealert to market shifts or technology changes, we can adaptour business to capitalize rather than be defeated. Manysuccessful entrepreneurs have reshaped major parts of theirbusinesses in the time it takes giant companies to call aboard meeting. It’s not easy. It can be frightening andexpensive. But you control the strategic agenda.

Building Something of Permanent, Ongoing Value

This motivation has both financial and emotionalaspects. The financial issue is something like the argumentfor buying a home rather than renting. If you’re going toinvest a career building someone’s business, why not yourown? There is also the possibility of building an enterprisethat will support you through retirement and be passed onto future generations.

Most successful entrepreneurs report personalsatisfaction at having created something that providesincome for employees and value to customers and thecommunity. To some extent, ego satisfaction is involved;

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but I believe the root motive is deeper—something akin toa farmer who works hard all year and brings in a bountifulharvest in the fall, or the architect-builder who completesan excellent project that will bring great benefit to thecommunity.

Building Toward Your Ideal Lifestyle

This idea is likely to gain maturity as your businessmatures. Initially, entrepreneurs may simply intend tobecome rich! (The problem with rich undefined seems tobe that you can never quite get there. This year’s successsimply becomes the floor for next year’s ceiling. You neverknow when to declare yourself a winner and startcelebrating.) Often the first refinement of lifestyle goalsetting is a list of specific lifestyle additions:

The “Things” that Enhance Lifestyle: As I writethese words, I’m looking out the window of our lakesidecabin, nestled in the woods of Brown County, Indiana. Idrove here in a decent car, from a nicer home than I everimagined I’d live in. There’s a nice boat by the dock. Theentrepreneurial life has provided the creature comfortsimportant to Corbin lifestyle. We’ve enjoyed wonderfultrips, sent three kids to college without breaking the bank,and can show a pretty decent personal financial statement. Imention these things not to boast (certainly manyentrepreneurs make me look like a poor cousin) but ratherto verify that, with dedication and hard work, your businesscan indeed provide a very adequate set of materialcomforts.


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Your Involvement with Family: Mostentrepreneurs work long hours, especially at the start. Butthose hours are largely under your control. If there are keyfamily activities, you can be there. The boss will not springa sudden project on you or require you to be in New Yorkon your son’s birthday. One of my clear memories of big-company life was a Las Vegas sales meeting where a groupof executives were trading war stories about the key familyevents they had missed: “That’s nothing, I was in Hawaiion my first anniversary and Singapore on my second!” Idecided, then and there, I didn’t want to work in a placethat made family disappointment a red badge of courage. Inthe entrepreneurial life, there can be similar pressures:usually intense deadline requirements that require longhours to meet. But the choice is yours, and with discipline,you can prioritize your family ahead of other demands. Asyour business grows, you can choose to involve family invarious ways. All Corbin kids worked in the businessduring their high school years. After college, daughter Kimhelped launch our publishing division. Son Brandon helpedlaunch our Internet service division before moving toanother career opportunity. Wife Janet has been in and outof the business several times including her successfuloperation of her own company. Entrepreneurs vary in theircounsel on whether family involvement is a good thing, butthe choice is yours. Whether your motive is education,money or family bonding, the business can provide avehicle.

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Your Leisure Time: Here we want to use the termleisure in its broadest sense—the time you are not working,sleeping or involved with family. This may meanrecreational activity. Certainly the stress-relief of activity isimportant, so a bit of golf, tennis, boating, skiing, mountainclimbing or whatever, can be important. It may mean purerelaxation in your favorite chair, hammock or nap spot. Butit can also mean service to your community, perhapsthrough your church, in the political arena, or through afavorite non profit organization. As your business builds,you can develop an organizational structure designed toprovide the leisure time that is important to you. Ourchapter on the role of delegation is highly relevant here.You will probably need to “let go” of variousresponsibilities to increase leisure time. But it is definitelypossible. (I am writing this chapter on a Friday morning;I’m 65 miles from the office, and I have every confidencethe business is running just fine.)

Your Retirement: A successful entrepreneurenjoys happy choices in regard to retirement. Some sell thebusiness and use the nest egg to support a golf and fishinglifestyle in Florida. Some pass the business to the nextgeneration but receive enough ongoing income to support agolf and fishing lifestyle in South Carolina. Others declarethemselves Chairman of the Board, and remain involved atthe strategic level while turning over day-to-day operationsto the employee team. Others just keep chugging on,declaring retirement to be the stuff of wimps. Someimmerse themselves in community service. Others startfledgling businesses just for the fun of it. Again, the key


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point is choice. The entrepreneur can set lifestyle goals,including the approach to retirement, and build the businessin ways that make those goals reality.

So, in summary, Bill Corbin and thousands like meare entrepreneurs primarily because we can set life goals,shape our corporate agenda, and work to make the businessfulfill the life goals. It takes time, effort and dedication.Patience is an absolute key. There are also no guarantees.But if we succeed, we achieve a wonderful harmony amongthe important elements of life: family, career and outsideinterests. We enjoy the satisfaction of building somethingof permanent value. We have the satisfaction of enhancingthe careers of employees and providing an important part oftheir families’ income. The life goals we set include bothour active working years and our retirement alternatives. Ina personal sense, I find the benefits well worth the sacrifice.I would definitely do it all again.

From the heart, I hope this book has been helpful. Ifyou choose not to become an entrepreneur, that decision isA-OK. It’s not for everyone. If you do elect to proceed, Iwish you the very best. Work hard, hang tough. Learn.Grow. Succeed!

2000 bill corbin - entrepreneurial life - are you cut out to be an entrepreneur

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