Confessions of a small-business owner …

Politicians love to point to how they’re helping small businesses. 

That’s usually a bunch of crap.

Let me rephrase that: It’s always a bunch of crap. 

After running a really small business for about 30 years now, I can’t think of a single instance when the Federal, state or local government has helped me with anything. Every time I think there’s something that might benefit me and my company, I don’t qualify because I either pay my employees too well, won’t hire people I don’t want, or buy equipment I don’t need.  

I don’t think I’m alone in this. 

There’s this enduring mythology about small businesses – the man or woman who tires of the corporate rat race and creates a thriving business from scratch while giving back to the community. Often they’ve developed a service no one knew was needed, and probably still isn’t, or they successfully converted a hobby into a money maker. 

The media loves this corny crap, especially if it’s a middle-aged divorced woman, or a convicted felon or illegal immigrant, who turned their life around as they turn a profit.

Honestly, I want to puke every time the local paper does a puff piece about someone with a sheet-changing service for college students, paints portraits on bowling pins, knits yarmulkes for dogs, sells ads on toilet-seat liners, or some other micro-niche business.  

It’s always the same story: annual sales are almost $10K and after a few more years they expect to be breakeven.  And it’s all because they followed their dream and had passion.

I’m pretty certain most other small business owners like me read that and roll our eyes.  Geez, is that all we have to do – follow our dreams and have passion?  Is that all there is to it?  And wow, a whole $10K in annual sales … imagine that; just think what you can do with $10K.  Sure, you could make that at Mickey Ds or driving for Uber, but now you’re your own boss. Woo-hoo!   

Why are we so dismissive of feel-good stories like those?  It’s because the writers have no clue what it’s like to run a real small business. They don’t understand that most small businesses that make it are short on cute and long on boring. Media writers work for someone else and probably always will.  So they – like many people – think the crowning achievement of the American Dream is to start with nothing but a neat idea and perseverance and end up building an empire.   

Trust me: for every Pet Rock there are a million failures.   

I’m reminded of something Robin Williams once said: He said he started at the bottom and clawed his way to the middle. That’s far more likely for a small business, if it manages to stay afloat long enough. And that’s a mighty big “if” since most new small businesses fail in the first three years.

Very, very few small businesses make their owners rich. The overwhelming number of small businesses end up making their owners broke. Most small business owners end up financially worse off than if they’d worked for someone else instead.

A lot of the time it’s the owner’s fault – they bought into the “dream and passion” spiel instead of doing their homework. You’ll find that often with franchise buyers and startups.

Other times they are just at the wrong place at the wrong time, got terrible advice, or didn’t realize how much they’d hate being their own boss.

The latter is more common than you imagine. In my younger years I acquired several publishing companies from people who grew to hate being their own boss. They were certainly smart enough to run the companies; they just didn’t enjoy it and wanted out. 

I was too young to understand fully why they felt that way. Granted, their businesses didn’t turn out to be the cash cows they’d hoped for.  And not everybody who is a killer salesperson for someone else makes a great business manager. 

But I think what really turned them off was how down in the weeds running a really small business can be.  When you’re accustomed to working in a big corporation, you don’t have to pay attention to a lot of the small stuff. Somebody else takes care of it. 

In your own business you suddenly discover that there are no more elves working behind the scenes.  Nobody else is automatically restocking the paper cups in the break room, making sure you don’t run out of toner or copy paper, or getting a broken toilet fixed.  

You are now solely responsible for everything and everyone.   

People always tell me it must be nice to own your own business. And how great it must be to be your own boss.  Must be all rainbows and unicorns.   

That’s because they’ve never owned their own business and been their own boss. You may think your boss is an idiot and anybody could do his or her job better. Until you try it yourself. You may discover that you’ve traded one idiot boss for another even worse. You. 

And that’s not all of it. 

Owning a small business is like being sentenced to be everybody’s daddy. 

Almost everyone who works for you thinks of you that way. Their paycheck is their allowance. Their jobs are their household chores. When they have some financial crisis and need money fast, they come to you. When they have some personal crisis they come to you as well and burden you with whatever disaster they now face – whether that’s a sick dog, car repairs, an abusive spouse, marital infidelity, a drug-abusing family member, personal bankruptcy, or anything else.

Their problem instantly becomes your problem. You’re the daddy. 

My wife and I never had children. But through my business we’ve always had kids. 

The only difference is that they don’t live with us and have all finished college.  But I am responsible for giving them money, and they’re all still on my insurance.

So what about the freedom you have as a business owner?  Another myth.  When you own a really small business you have far less freedom.   

You can’t just come and go as you please. You have to set a good example. That sucks.   

If you’ve got the brains God gave a gopher you know your employees follow your lead, good or bad. So if you usually breeze in at 10 and knock off at 3 after a two-hour lunch, don’t be surprised if your employees show up late and duck out early. If you spend your day on personal phone calls, so will they.  If you take smoke breaks every 30 minutes, they’ll be right by your side. 

Your parents may have said: “don’t do as I do; do as I say do” and got away with it because you were their kid. But the same rule doesn’t apply in small business.  Any bad work habits or questionable personal traits you have will be eventually be replicated by your employees.  It’s hard enough to keep them from developing bad work habits entirely on their own; every time you screw up they’ll notice and add that to their “to-do” list. 

Your employees also believe you are rich. They assume you are making a fortune in your business because – well, you own it. They have no idea how often you may have stopped paying yourself to make sure you had enough cash on hand to pay them.  If they knew some of them would panic, but a surprising number wouldn’t care. Money magically appears in their bank account every couple of weeks.  That’s all they understand. 

Despite what small-business employees think, most owners aren't making anywhere near what they think they are.  The same employees don’t understand that owning a small business doesn’t automatically mean you can buy yourself a new car whenever you like. You can’t pass your vacation expenses – much less your household bills – through the company. You can’t pull cash out the company whenever you like, or entertain all your pals at company expense.       

Well, you can, but you won’t be in business very long. Plus, you’re just begging for an IRS audit, which, no matter how squeaky clean you are will cost you in accountant or lawyer fees and time. 

One reason I've survived this long is because I treat my business like a business and not a credit card. Not everybody has that kind of restraint. I've also been lucky at times.   

So the next time someone says they’re thinking about starting their own business and being their own boss, wish them good luck. 

They’ll need it.  I say that from experience.