Entrepreneurial Education

I am often asked what dictates success in small business. Normally I respond that you have to have more income than expenses. Business is really that simple. That does not mean that it is easy. Income doesn’t just happen. Not only do you have to provide a market solution, you also have to let the market know, in terms they can understand, that you are the best choice for that market solution.

Managing expenses can be equally difficult. Getting the biggest bang for your buck out of marketing dollars is just one of the challenges. There are operating costs, productivity issues and distribution costs that can easily get out of control if the business is not tightly managed. Needless to say, small business owners have quite a lot to learn if they are going to be successful.

Personally, I’ve learned a lot about small business ownership over the years as the owner and operator of my own bagel stores. I also learned quite a bit by working as a food and beverage executive for some large corporations. Most large businesses started as small businesses and their larger scale success can be attributed to the best practices they implemented and trained their managers to follow.

I started my first bagel store when I was 23 years old, along with brother, who was 21 at the time. We made our share of mistakes and our lack of business aptitude was pretty apparent in the first few months of our operations. I still remember my grandmother calling me up to ask me how the business was doing. I told her I thought we were doing pretty well.

“What are your monthly sales?” she asked. I couldn’t come up with a number. After giving her my sales from the day before, she projected it out for me. Then she started asking about my expenses. “Food costs, rent, insurance, payroll, advertising?” she asked. I gave her some figures and before the conversation was over she computed a basic profit and loss analysis for me. The whole process opened my eyes to the fact that I was not paying attention to some critical data. Believe me, the next time she called, I was more prepared with answers.

Probably the most important lesson I learned as a small business owner stems from some frustration that I was having with my younger brother. He was complaining about a worker. “She’s horrible. She’s ruining our business,” he said. “You should fire her.”

I thought about this for a moment. Why was he putting this on my shoulders? He was a partner in this business. He should fire her. He is the one who hired her. I also thought that maybe she was horrible because he expected too much from her without giving her the proper training. But then I thought about it some more. Using that same rationale, I was guilty of making my brother a partner in the business without training him as a manager. He was only 21 and just graduated college. How was he supposed to know how to do these things?

That’s when I had an epiphany. If something goes wrong, it is probably my own fault. I started to use this train of thought every time our business was faced with a problem. I chose the path of self employment. No one forced me to open up bagel stores and it was my responsibility to face the challenges that go along with small business ownership.

The responsibility of owning a small business became a very humbling experience for me. It is tough to accept blame for everything that goes wrong. Over the years, I’ve had employees steal from us, seen my store get struck by lightning, had a windstorm blow out our drive thru window and dealt with a number of serious challenges in the aftermath of the terrorist attacks on September 11th. There were so many issues that seemed beyond my control when I was running my businesses. Yet, I kept telling myself, if I were to succeed, I had no choice but to accept the challenges and find the best solutions.

I do have to admit here that it was not always an immediate realization or Zen-like approach to problem solving. I would lose my temper, get frustrated or wallow in self pity just like many others when faced with difficult situations. But eventually I would remind myself (or have my wife remind me) to calm down, accept responsibility and just deal with it.

I found the key to my own entrepreneurial education – you have to develop the solution to every problem. Blame and self pity yield no results. If you are not prepared to accept responsibility, you are not prepared for self employment.

The road to business success is simple. Get more income than expenses. Just be prepared to drive around, jump over or crash through some obstacles along the way. Erica Jong once wrote, “Take your life in your own hands, and what happens? A terrible thing: no one to blame.”

It can be humbling being a small business owner, but it is also liberating. I choose to change Ms. Jong’s quote to, “Take your life in your own hands, and what happens? A beautiful thing: there is no one to blame.”