Lone Wolf, Family Owned Business, or Corporate Jock

I’m amazed and awed how fast the business world has evolved in the past five years. Some find frightening, others exhilarating.  It’s a great time to be in business, especially if you understand digital, how networks work, and are disciplined to tenaciously learn and study, and seek out new technologies and ideas. As the kids are just getting back to school and others find themselves embarking to get the JAY O BEE here are some learnings I’ve picked up along as one looks to go into business.

The Entrepreneur

I learned more in one week in business on my own than I did in four years while getting my MBA. There is nothing more humbling and more eye-opening than coming home to your wife and telling her a large corporate client was lost due to a restructure and that this coming Friday there would be no paycheck, no income coming in. Stark reality is the best way to learn the bottom line, to learn a balance sheet, to learn cash flow, to learn about credit, to learn about the stomach and courage it takes to go out on one’s own. Having your own business has two sides, one fuels the ego with power and control and the other side does the same where it may humble you and force you to look at your priorities and goals. If you have the itch, do it, even if it doesn’t work you’ll be better off and the insights you gain, even in failure, will help you. In the end it makes you a better businessman or businesswoman.

A word of caution – be prepared, have a backup plan and make sure your spouse/family is behind you and supportive. It’s going to take a lot. And also be cautious going into business with family and friends. One of the best pieces of advice I received from a law professor is when choosing to go into business with family and friends immediately view the partnership in legal terms, ie have the paper trail necessary BEFORE going into business. If you are setting up a LLC, a S Corp, or have an informal agreement how profits will be shared, make sure you hire a neutral third-party (a lawyer) and have a written contract. If things get strange later on in the business relationship and the odds are it will, having a written agreement set up when everyone was feeling all optimistic and cheerful will be invaluable. Make sure it’s black and white and no gray area. Doing this will help ensure you keep your friendship or family relationships in tact. Be warned going into business with family and friends has the potential to make things go sour. If your partner feels otherwise about signing an agreement, or it feels awkward to discuss, I would highly recommend to second guess the maturity and acumen of that party and move on.

People will inspire you and people are going to let you down, even those that are close. I know one colleague who was in business for over ten years with his best friend and that friend was siphoning funds from the business all along. When protecting your name, or your assets, it’s best to be overtly cautious and defensive.

The Small Family Owned Business

Maybe the risk and insecurity of being on your own is not for you. You search and find a job with a small business. By small business I would venture to say somewhere in the neighborhood of 10 – 150 employees and $20 – $100 million in annual sales. In this situation stay extremely focused and shrewd. In a small business it’s very easy to drink the kool-aid without knowing it.

The first thing to figure out is if it’s the means or the end. Is the job an end, are you doing exactly what you want or what you went to school for? If that’s the case consider yourself extremely lucky. Or is the job a means where you can pick up skills and experience? The means can even be that it’s a low stress job with not many hours that enables you to live the lifestyle you want or gives you time to pursue other hobbies and interests. Figure this out early on, you’ll be much happier. Whatever path you’re in always be aware it’s the companies’ bottom line that matters. It really is like The Godfather at the end of the day “It’s nothing personal, it’s business.” If the profits aren’t there you could be cut.

It’s crucial in the small business  you become invaluable. This will help you when cuts are necessary. Each business has its own culture and vibe but be warned, unless you have an equity stake you will never be allowed “in” and likely won’t be making important decisions. Time can race by in a small business. I was with one for eight years. Later, after I had moved on, I was in a job interview with a fairly prestigious executive recruiting firm for a fairly high level position. I received the best and most brutally honest comment I’ve ever received – “You obviously know what you’re talking about and are very passionate but at Company A you did the same thing for 8 years, I need to see more.” The comment rang and it was so true. Towards the end of my tenure at that company I confided with a friend about my frustration and he bluntly said, “Move on.” If you are not advancing in the small business it’s unlikely you ever will. Keep advancing.

 The Big Corporation

This one has surprised me and where I’m currently at. My past two jobs have been with big companies. “Back in the day” I was your typical post modern college hipster looking to study and change the various ISMs. You get it. When I ride the corporate elevators I laugh to myself because I never imagined I’d be doing that. Initially the corporate realm invited me with its stability and intrigue to try something different and see what life was like on the other side. I’ve come to appreciate it. There’s not a lot of dead weight. I found in the Small Business world you find many extremely comfortable people who’ve been there for over 15 years and just collect the paycheck. Ironically, people tend to stay and businesses keep them, maybe it’s because of the legal and personal sensitivities of letting people go.

I’ve found the corporate realm can be perceived to be intense and cold. You’ll stick out if you under-perform, people will talk, and it’s almost like a self-censuring thing of the team. You’ll get weeded out. The corporation will look to get rid of the dead weight. Some can view this as heartless, others can view it as striving for innovation and new ideas. As long as you are thinking, trying, and not afraid to think for yourself you’re fine. To me it’s been like being a freshman at a big university. You’re thrown into a situation with no oversight, nobody to really hold your hand, and you have to navigate it on your own. If you can handle the responsibility it’s quite liberating. You can focus on the work. In the small business, in retrospect, be wary of all the hand holding and coddling, it can be a way of control.

Each company is totally different and what I say about the small business may apply to the large company and vice versa. This has been my experience. What are your thoughts?