Entrepreneur Article One: Saving Our National Treasures

Entrepreneurial Success versus Small Business Failure

Copyright, Nicholas A. Bibby, all rights reserved.

What follows is totally new thinking regarding the nature of small business success and failure. Accept as a preface that this is neither an a
on more traditional thinking, nor a rebuke of agencies, educators, and other caring, accepted authorities on the subject of entrepreneurshi
Instead, this is a journey into the more personal aspects of entrepreneurship and a new perspective on solving a difficult problem.

There are two widely accepted reasons used to explain why small businesses fail. One is an inadequate understanding of the business; the
is insufficient capital to sustain the venture. Even though those are obvious contributors to failure, I believe there is a much more basic ca
failure; one that is far more powerful and important than knowledge or capital. Just keep in mind as we go forward that any venture can b
shoe-stringed financially, and the processes required to run almost any business can be learned. Therefore, accepted theory is not my rest
place.

Let’s begin our analysis with an often stated, yet unfortunately true, piece of information. According to government statistics, two-thirds o
new businesses fail before they are five years old. Like many of you, that statement had been drilled into my head to the point where I wa
made immune to its implications. And, even though I have personally experienced most of the wins and bruises associated with
entrepreneurship, I never took to heart, or fully appreciated, the true meaning of that statistic until I quietly pondered the numbers. Then,
the magnitude of the problem impacted on my thinking, I took up the Grail and set out on a quest to help entrepreneurs win more and suf
less. That mission is both the center of this article and the core of my work.

Percentages are often more meaningful when we consider the numbers they represent. For example, if we state, and accurately so, that o
5% of the total number of businesses in existence are start-ups, that is not terribly significant. But, that 5% represents 700,000 start-ups
year; a huge number by any standard. (Note: There are somewhere between 12 and 14 million total businesses in North America, ranging
General Motors to Pete’s Amway sales, whether white or black entrepreneur, women or men, or young and old. The percentages and the fa
are about every entrepreneur and every free enterprise.)

The next step is to calculate failures and see what kind of humanity we are dealing with. If my math is right, 66% of 700,000 equates to
roughly 455,000 failed or failing businesses at any given time. Friends, please focus on the size of that population for a minute. Four Hund
Fifty Five Thousand infant businesses are in various stages of dying! Think about it! If we just assume that the average “new” business em
a minimum of two people, and further assume that at least one family of three depends on the success of that business, I think we have a
population well worth saving. If all of Boston, Dallas or Detroit were in a death grip, a state of emergency would be declared and sufficient
forces would be mobilized to fix whatever was wrong. I am a conservative thinker on most issues, and I am not for more interference in ou
lives, from the government or any other source, but with those statistics, don’t you think some real help in the form of a solution for decre
failures is in order? With such a high loss rate, you would think that general subsidies to truly fix the problem would be a shoe-in, but
unfortunately, that is not the case. In most instances, the bottom-line medicine given to most failing owners is, at best, a heavy dose of
empathy.

Please think about how many bank accounts and life savings are wiped out via the carnage of 455,000 dying businesses. How many familie
torn up? How many health problems result? Literally, how many lives are lost? What is the net cost to society as a result of the problem? A
finally, what are we doing about this tragedy? When you take a hard look at the issue, the answer is little of real value. This is the true rea
entrepreneurial success and failure. This is the true reality of small business start-up statistics.

We support entrepreneurship because it is our economic lifeblood and the foundation of our hiring future. We strive to help businesses in
general, but on the individual level, those facing failure are courageous souls who basically face the world alone. We offer great assistance
the unemployed and the needy, and that is proper, but our entrepreneurs are also valued commodities that deserve care and nurturing. O
governments, workforces, indeed, our entire economic base depends on these critically important men and women, but we are woefully la
in assistance when they are in trouble.

Next time, we will take a look at the players involved and begin to flesh out why traditional thinking and support systems need refinement
 Entrepreneur Article Two: “Water, water, everywhere, nor any drop to drink.”
Reality of Entrepreneur Resources
Copyright, Nicholas A. Bibby, all rights reserved.

In part one of this article, the focus was on the plight of entrepreneurs facing business failure. This installment deals with most of the critic
players involved, and an initial glimpse into the truth about resources available for the entrepreneur.

The first important player is government. In general, North American governments do a quality job of providing educational and, in some c
financial assistance to entrepreneurs. This is great news for focused entrepreneurs who need technical business planning and financial guid
However, when it comes to businesses in trouble, we find that planning and financial guidance tend to disappear. Resources seem to disso
these cases in the same way that people in trouble seem to loose fair weather friends. Therefore, new preventative measures are required
will go beyond the scope of today’s responsive government. What can be done? Much more in the planning stages, and I will discuss that l
on. Naturally, if government understood the root cause of failure, it would fix the problem. Possible solutions lie ahead, but here is one ear
clue. Business failure is not generally a function of the business itself, it is a function of the person who owns and operates the business, a
that issue needs to be dealt with long before business plans are ever made.

When it comes to small business failure, many agencies, whose reason for being is to support small businesses, often find themselves help
They are equipped to help start-ups, not businesses in trouble. For example, if a loan is made to a sick business, which is often the case, t
cash injection will most likely just prolong an inevitable death. In spite of its desire to do so, an outside agency cannot affect real change i
individual business for several reasons. First, business failure cannot be overcome short of day-to-day corrective involvement in a venture.
Second, by dint of personality, entrepreneurs and other types of people, generally do not perceive the world in similar ways. Third, help is
focused on the wrong problems. Hang on, I will tell all before the story ends.

Now, just in case you are ready to jump down my throat because you or your uncle work for the SBA or volunteer for SCORE, please calm
down, I am not attacking the fine work of these agencies or their level of commitment to small business development. I am simply concern
with their ability to effect change. Here are but three of many reasons I feel this way. First, the people who work within these agencies are
primarily executives, administrators, managers and educators. Those are all honorable, required functions in our world, but their experienc
mindset and skills usually do not relate to the entrepreneurial lifestyle and personality. Working as an executive manager and owning a
business are not at all similar. Second, lest you think I am being critical, which is absolutely not the case, let’s just assume that we placed
ex-entrepreneurs in these agency slots. Even though that will never happen, if it did, the parties could better relate, but it still wouldn’t be
answer. Why? Because once again, small business is about living and working in the trenches, and only the small business owner does tha
day-to-day basis. The differences between living through a business failure and talking about it are simply like night and day. If you’ve bee
there, you know it’s true. And third, business failure begins long before the business is ever launched. It starts with a poor fit between the
entrepreneur and their venture. We don’t focus on that issue. Instead we examine systemic business problems, and those issues are simpl
the root causes of failure.

Next we have the banker. In terms of financial assistance the banker can be a great asset, but don’t forget, our focus is on troubled busine
Due to priorities and abilities, not out of lack of care or concern, the banker cannot champion the cause. In times of trouble, the banker wi
attempt to “work out” the problem, but be assured that ultimately, collection, in one form or another will take precedence over entreprene
counseling. In addition, bankers, like bureaucrats and managers, have and need specific skill sets in order to be effective, and those skill s
are different from those required of an entrepreneur. So once again, you will not generally find a mindset fit between an entrepreneur and
personalities.

Now consider schools. Educators teach us about business management systems, and today, we have many entrepreneurial courses of stud
well. However, knowing how to effectively manage a system does not equate to the demands of entrepreneurship. We are fortunate to hav
brilliant minds housed in prestigious academic settings, but as important as business principles and systems are to successfully running a
business, once again, those issues are not at the very heart of entrepreneurship.

Of course, we have to include the business owner’s family, friends and other confidants. As deeply concerned as they are for the welfare o
favorite entrepreneur, they are usually not effective resources if the venture is in trouble. Mostly, after listening tirelessly and offering
suggestion after suggestion, friends and family eventually have to get back to taking care of their own lives. Spouses, children, parents, fr
and trusted business advisors may feel the owner’s heartache as though it was their own, but usually they are helpless by-standers. When
business is in trouble, so is the owner; this creates a very “human” connection.

So, this all sounds rather bleak, doesn’t it? We have government agencies, banks, educators, friends and family all around, but really no o
help. Do you recall the Ancient Mariner by Samuel Coleridge? “Water, water everywhere, nor a drop to drink.” The analogy works quite we
our story. Just as a thirsty sailor cannot survive on saltwater, the foundering entrepreneur may be surrounded by caring souls totally incap
of providing needed sustenance.
Entrepreneur Article Three: The Entrepreneurial Personality

Copyright, Nicholas A. Bibby, all rights reserved.

Entrepreneurship has touched my entire life. The sum total of self-employed parents and grandparents, personal ventures, topped by an a
life of counseling and consulting with countless entrepreneurs made a profound impact on me personally and professionally. Because it is t
human side of business that I find most interesting, I have used life experiences as a foundation to form fairly strong opinions on
entrepreneurship and the personalities that drive it. What follows is a very abbreviated version of an earlier discussion published on
entrepreneurial focus, but it makes the point none the less about the personality of the entrepreneur.

If asked to define an entrepreneur, the words most often chosen are motivated, focused, confident, aggressive, dominant, leader, etc. Wh
these adjectives taken collectively may accurately describe some entrepreneurs, they certainly do not describe all entrepreneurs. In fact, s
of saying that all entrepreneurs work for themselves, it is as foolish to define them as one personality type as it is to say that all athletes,
students or employees are the same. A business owner need not be aggressive or dominant, although they might happen to have those tr

Answer the following questions and decide for yourself if entrepreneurs are essentially the same. Is a happy, successful franchisee the sam
type of entrepreneur as the franchisor from whom they bought their business? Is the consultant the same type of entrepreneur as the foun
of a high tech, innovative manufacturing firm? Is the grocer the same type of entrepreneur as the multi-unit regional franchise owner? No,
are all different. The concept of entrepreneurial type is a stand-alone discussion and I will offer it another time as a separate article, but I
to it here because acknowledging the presence of different entrepreneurial types helps us accept sub-sets of entrepreneurs. It is the first s
toward defining real differences among them.

For the general population with little or no interest in the subject, the fact that all entrepreneurs cannot be forced into one mold is really n
issue. But, for students of the subject, and especially for people considering, or actually pursuing an entrepreneurial lifestyle, grasping the
nature of the ownership personality can be critical to one’s success or failure.

OK, ask the obvious question. “Nick, are going to get to the point and define the entrepreneurial personality, or are you trying to say that
really can’t be defined?” Ah, good for you, you want to cut to the chase. Here’s the answer, at least as I see it, and frankly it is a very simp
one.

Of course there is an entrepreneurial personality, the rhetoric was to clear the air and allow us to start with a clean slate.

All entrepreneurs can be properly defined by one special trait, but that trait is not focus, confidence, aggression, dominance, leadership,
intelligence, integrity, or loyalty. Any or all of those traits can be found in hourly employees, corporate executives, teachers, or any other
population.

The one element that separates entrepreneurs from all others is their extra measure of “independent spirit.”

Further, you will find that the successful entrepreneur displays a natural executive talent in conjunction with their powerful need for
independence. Why natural executive talent? Because the need for independence must be accompanied by the ability to plan as well as ex
the plan. Without that, the drive for independence could not be harnessed and realized.
Let’s take a look at a couple of examples in which independence rules the day.

The owner of your locally owned auto repair shop is most likely an ex-auto dealer or service station employee. However, the need for
independence created the desire for ownership, and executive skills allowed the implementation of the ownership plan. The fact that the pe
is a skilled mechanic is irrelevant except that knowledge is required to operate the business. If this person were not driven by an independ
spirit to own a business, they would have stayed at the dealership, and at best, “dreamed” of ownership. Such is the independence of an
entrepreneur.

The owner of your local franchised print shop is most likely an ex-corporate manager who was downsized and decided to buy a job rather t
tempt the corporate roller coaster again, or a frustrated executive who craved independence. However, this person was probably faced wit
same problem that most corporate types face. Generally they do not have marketable trade skills that complement their administrative ski
The mechanic had knowledge of their business, but the corporate employee had to buy the required knowledge from a franchisor. Hail
franchising.

The list of examples goes on and on, but no more are needed.

Of course, there are varying degrees of independence and varying degrees of executive talent, but those issues are associated with the dif
Entrepreneur Article Four: Entrepreneurial Types

Copyright, Nicholas A. Bibby, all rights reserved

I have made the point that the one trait common to all entrepreneurial hearts is a drive toward “independence,” and I added that varying
of that independent spirit serve to create a scale on which we could find and define different types of entrepreneurs. I’d like to expand on
thoughts.

The notion of differing “types” of entrepreneurs is only important if one is in some way connected to the world of self-employment. And fra
unless a person has a direct use for this type of information, the subject is boring. But guess what? At least 25% of Americans are plugged
directly into the subject as small business owners, employees of those businesses, or family members of entrepreneurs. As stated before,
a broad brush to define the entrepreneurial personality will not work for serious entrepreneurs because it leaves too many possibilities to
examine, too many roads to travel that are unnecessary as one decides on their future. In a nutshell, it is neither forward thinking nor effi
to lump together, all the players and all the personalities. Making broad assumptions about the entrepreneurial personality can also lead to
danger and business failure.

Over time I have identified at least five distinct entrepreneurial types, and that discovery represents a major step up from the “quick fix” t
that claim to evaluate one’s entrepreneurial personality in a few minutes time. You know the tests I’m talking about. The ones found in pop
magazines. The multiple choice questionnaires that help puff up the ego and encourage us to think of ourselves as independent, entrepren
leaders with “all the right stuff.” Folks, not all of us have the right stuff for the entrepreneurial lifestyle, but then again, most entrepreneur
not possess the right stuff to make it as great corporate staffers at the highest levels. Why? Because they tend to upset the apple cart and
make other staff uncomfortable.

The question is not whether a test says a person can be or should be an entrepreneur. The issue is whether or not a person knows in their
what “type” of entrepreneur they are, if any, before the journey begins. There is little or no value associated with a 15-minute personality
that gives people a green light to buy a franchise. Could that test possibly provide better analysis than a system that allows a person to “th
through” ownership issues on their own? There is little value in those tests, and there is little value in pursuing an entrepreneurial lifestyle
based on what other people claim to be “hot” new opportunities. It is the opinion of the prospective entrepreneur that matters most, but
unfortunately we have been conditioned to accept salesmanship and promotion rather than thinking for ourselves. The more informed and
definite we become concerning our traits and objectives, the better choices we are able to make.

Determining entrepreneurial type is an integral part of the personal analysis process for anyone planning to succeed in the grueling world o
self-employment.

Now, here is a very abbreviated description of differing entrepreneurial types. Think of them as existing on a continuum spanning horizont
left to right with an increasing need for operational and concept independence as the list progresses. No one type is better, stronger, or m
capable than another; they simply have different personalities and styles.

First, is the Intrapreneur. Although tied to the “other owned” organization where they are employed, the intrapreneur enjoys independent
responsibilities where risk and reputation are part of the assignment. What kinds of assignments would those be? Heading up a take-over
merger. Implementation of a new business development plan.
Entrepreneur Article Five: The Root Cause of Entrepreneurial Failure
The Franchisee is next. The most comfortable person in this role desires full ownership, but needs/wants/sees the benefit of total systems

Copyright, Nicholas A. Bibby, all rights reserved.

At the beginning of this piece I called attention to the commonly accepted reasons for small business failure, and promised to offer alterna
thinking.

The two widely acknowledged causes of small business failure are 1) lack of knowledge about the business, and 2) insufficient capital to su
the venture through break-even and profitability. A far more powerful and important root cause of failure that I now accept after a lifetime
study and observation is poor fit. Therefore, for me, traditional explanations for business failure are too elementary and not equal to the
magnitude of the problem. Insisting that businesses fail due to knowledge and capital is tantamount to insisting that wind and rain cause r
to leak.
First is the issue of knowledge. I think it’s fair to say that, given proper instruction, most entrepreneurs can learn the basics of running a g
business. Information and learning can be obtained through traditional schools, franchisors, books, consultants, or on the job training as a
employee. Second is the matter of capital. With a modicum of intelligence and careful planning, a venture can be started with limited mean
and grown as finances, time and ability permit. For example, if one decides that a fast food operation is the goal, but only $2,000 can be
scraped up, one logical starting point is a portable grill and refrigerator that can be hauled to public events on weekends. You keep the day
and save the weekend money until a brighter, bigger day when you put four walls around a permanent grill and refrigerator. Sorry, I can’t
the lack of knowledge, lack of capital school of thought.

Here are a couple of questions that challenged me to see failure in a different light.

1. How many adults are unhappy with their work? Research tells us that more than two-thirds are unhappy. Pretty sad huh?
2. What is the percentage of small businesses that fail? About two-thirds.
3. Do you find it interesting that those numbers are very close? Yes, of course.
4. In what functions do we tend to do excel? Obviously, we excel in positions that we enjoy and for which we have an aptitude.
Entrepreneur Article Six: The Successful Entrepreneur

Copyright, Nicholas A. Bibby, all rights reserved.

Here we go again. The root cause of small business success or failure is not due to a lack of knowledge or capital, it is due to a poor fit bet
the owner and the chosen venture. The successful entrepreneur always enjoys a good relationship with the business.

Now, there are only two ways to achieve a "good fit" between an entrepreneur and a business. The first is pure luck (which is most often t
case). The second comes from consciously exploring who we are and how we might connect to the world of self-employment. It's really no
different than analyzing one's career options or choosing a mate. Oh boy, what an analogy; a true one. In reality, 75% of adults don't like
jobs, more than 50% of all marriages end in divorce, and three out of five businesses fail. All of which means we don't do a very good job
analyzing things that are important in our lives. Nevertheless, in business, if we spent half as much time getting ready personally to under
a venture as we do writing business plans and visiting with attorneys and accountants, we would succeed far more often.

When you reduce anything to its essence, the concept of fit is what life is all about. Why do certain marriages last while others fail? Why d
true heroes linger long in years doing what they do best, and all the while being observed with vigor and enthusiasm? It's simple. There ex
good fit. Albert Einstein and Mother Teresa most likely were not daydreaming about blissful retirements in the Bahamas. They found their
their mission, their purpose, and they stayed with it. Entrepreneurship is no different. You have to find out what you like to do, what you w
born to do, and then do it. It is a simple, but overlooked notion that people do better with activities that utilize their natural skills and talen
Understanding who we are and what we are good at will direct us toward more logical life choices. When we take the time to travel the roa
self-discovery and act on the things that we come to learn about ourselves, we simply live more productive, satisfying lives.

The very first step toward success as an entrepreneur is recognizing that we possess enough independence to leave the perceived safety o
traditional employment. The second step is giving ourselves permission to reflect deeply on what we want out of life and out of a particular
venture. As just stated, marriages, businesses and careers are failing all around us, and it is only in the "minority" of cases that we find
success. Shame on us for being so stupid when all that is required is forethought and gut wrenching self-analysis that simply ends with on
question. "Given all that I can find out about the business, career or mate I am considering, am I honestly excited about performing all the
tasks associated with that relationship?" If the answer is "NO", there is NOT a good fit. Let's assume that you want to open a restaurant
because you love to chop, trim, broil, bake and sauté. OK, apparently you are great in your kitchen, and all your friends insist that the wor
should have access to your culinary talents. But what happens if you are not blessed with people skills? Well, folks the restaurant business
first and foremost, a people business. If you don't enjoy interacting with them, you better take a hard look at catering. Get the idea?

Various members of my family have been involved with restaurants, manufacturing, real estate, insurance, building, printing, and consultin