Retail Observer

RETAILOBSERVER.COM SEPTEMBER 2018 64 S o, you wanted to go into business for yourself, and become an entrepreneur. You believed that owning your own business would bring you independence and financial freedom. You thought that your technical success would translate to business success. How is that working out for you? Many of us who have gone the route of the entrepreneur have soon found out that just because you are an expert in a particular field, it does not mean you can successfully run a business. Let's go through the typical myth that many of us have justified to ourselves. "I am a good technician and have lots of friends, so I can easily open my own service business doing what I know best: fixing appliances. My friends all say that I should be in business for myself. If I were, I wouldn't have anyone looking over my shoulder all day, and I could keep all the monies I collect each day from the service work I do." So you say to yourself, "I'll open my own shop." First there is exhilaration, followed by terror, exhaustion, and then despair. Does that sound familiar? So why do so many professionals fall victim to the fatal assumption that since they are an expert in their respective field, they know how to run a business? Practically speaking, the most in-depth financial statement that many have probably seen prior to starting their business was a 1040 tax form. Fast forward a couple of years: as your business enters a more mature state, you wonder why you cannot keep your head above water. You bring in lots of money, but you can't keep any of it. As a matter of fact, you not only can't keep it, but you owe more than you bring in. What happened? The truth of the matter is that while you were so busy working in your business, you failed to "work on" your business. You failed to get the necessary education you actually needed to run your business. It takes a lot of time and effort to successfully run your business. How many times have you heard the statement, "If you fail to plan, you plan to fail"? How many of you have failed to create a plan for your business? What are your strategic objectives? What are your organizational strategies? What is your management strategy? Yes, it takes some time to strategically plan for the next three to five years, but if you set your goals now, you will have your road map for growth and success. And what about those nasty, confusing financials? Why can't you just leave them to your accountant to figure out? Accountants do not know your business. They know numbers and which side of the ledger to put them on. When your accountant gives you your profit and loss statement and your balance sheet, everything you need is right there in front of you. But do you know what to look for? Do you know how to determine trends? Is your business in a positive growth period? Are you on a cash basis accounting system or an accrual basis, and which one gives a better picture of your business? Are you bankable? What metrics does your bank look at to determine if you are worth the risk when you want to establish a line of credit? What is a common size analysis? What is a burden ratio? Okay, as I am writing this my own head is spinning with all those financial terms. Many businesses fail because, frankly, the business owner failed to educate themselves. The owner failed to acquire the skills necessary to successfully operate the business. The owner failed to work on the business, choosing to continue to do what was comfortable to him: being a technical expert and not a business expert. There are many resources available to help you succeed. Industry associations like PSA and USA are two very fine resourc- es. Other resources include the SBA, your local Chamber and a new program offered by Goldman Sachs called 10,000 Small Businesses (10ksb.com). I encourage you to ask the serious questions and find the right answers. YOU WANTED TO BE AN ENTREPRENEUR— SO NOW WHAT? S E R V I C E D E P A R T M E N T RO Ralph Wolff, Industry Relations, PSA Certified Service Center www.certifiedservicecenter.org

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