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What's It Take To Run A Successful Business?

Written by: Adam Sonnhalter

Article Overview: I was reading an excerpt from a New York Times article that profiled a woman (Charlita) who opened a restaurant that failed after about 1 year. This is a woman who had spent 20 years in the legal field. A quote from the article that talked about her speaking to herself grabbed my attention: "How could someone with a law degree and as smart as you blow it this big?" I know that is a question that many small business owners ask themselves every day.

What's It Take To Run A Successful Business?

I was reading an excerpt from a New York Times article that profiled a woman (Charlita) who opened a restaurant that failed after about 1 year. This is a woman who had spent 20 years in the legal field.

A quote from the article that talked about her speaking to herself grabbed my attention:

"How could someone with a law degree and as smart as you blow it this big?"

I know that is a question that many small business owners ask themselves every day. We all make mistakes when running our businesses. The key is to learn from them and live to survive another day.

I want to highlight a couple of other comments in the article that caught my attention:

1. "Two of every three new restaurants close within three years of opening": as I mentioned in a prior post entitled "Why Do Most Small Businesses Fail", this high failure rate is not only true for restaurants, but for any small business. So the fact that Charlita chose to open a restaurant vs. any other business has nothing to do with why she failed.
2. "She always longed to run a restaurant that would feature her mother's recipe for gumbo": while passion is key to a small business's success, it's not enough to justify why someone should get into business. Sometimes this passion and emotional attachment can create blind spots when making business decisions.
3. "She did everything at the cafe, from making gumbo to scrubbing the floors and singing torch songs, while still putting in a full day as a magistrate": sound familiar to anyone? The small business owner wearing many hats (most of which are not very glamorous). And trying to do this while still working at a full time job. At some point when starting a business, you need to make the jump to full-time to give it a real go. I know I've tried the part-time thing for a bit as have many business owners I know. It rarely works out the way you'd like it to because as the old saying goes, "it's impossible to serve two masters."
4. "Missteps included relying on family encouragement more than financial planning": those well meaning family members, while still the #1 advisor to small business owners, can often create more problems. Your family obviously has your best interest in mind, and quite often they want to be your biggest cheerleaders, but that should not take the place of some sound business advice, especially from someone who's been there before.
5. "Borrowed $17,000 in a small business loan, fell into debt as crowds failed to materialize": again, another common challenge. Once you bring debt into the picture, you now have someone on the outside to answer to who will not be as patient as you or other investors. This ties in with #4 and the lack of financial planning. It's OK to borrow money as long as you can show how you're going to pay it back!

The article pained me because it really hit the nail on the head for why so many small businesses fail. A key for Charlita would have been to get some help from two people: i) someone with some experience in running a restaurant, and ii) someone with experience in running a small business.

It also sounds like she was struggling with a question that many folks we meet who are thinking about starting or buying a business struggle with: Do you want a job or a business? In Charlita's case, I'm not sure which one she was looking for, but based upon how quickly the restaurant closed (in about 1 year) and the fact that she's back working in the legal field with a job, my guess is she was looking for a "job"and that's what she found!

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Article Tags: small business owners, successful business



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