I recently read the August issue of Inc Magazine and came across an interesting article about the psychology of entrepreneurs. The article talked about businessman Joseph A. Schumpeter (1883-1950), who’s been touted as one of the most astute business thinkers that ever lived.

Evidently Schumpeter broke with traditional thinking about business, suggesting the entrepreneur as the source of all economic progress. If you see our previous blog about the SBA’s recent findings, once could argue that his theory has been proven!

One of Schumpeter’s books reviewed the psychology of entrepreneurs and suggested we are driven by more than a simple wish to grow rich. He suggested we’re driven more by the need to conquer, the impulse to fight, and the need to prove ourselves superior (we are a scrappy bunch I suppose.) One of the defining characteristics of an entrepreneur Schumpeter claimed is the ability to take a punch, get up off the canvas and go on to win the fight.

He also mentioned we desire success itself, not just the fruits of success. And that’s where we often get into trouble. We want success but more often than not, aren’t managing to our personal goals of success. We took precious time to research and start a company based on our personal skill set but often feel that since we’ve crowned ourselves with the title of President, we’re supposed to have all the answers and know how to do it all, whether operations, finance, people management and so on.

Some of us handle this well and learn to put people around us with skills in areas we are weak in, while others go up in a fame of glory, attempting to be captain, ship and shipmate all at the same time.

I wonder which one you are? Let us know at contact@realbusinessmatters.com

In our last blog, we talked about businessman Joseph Schumpeter and a recent Inc Magazine article about him. He coined a phrase called “Creative Destruction” in 1942 to describe his consistent observation of how the same innovation that creates opportunity for one business destroys another.

In other words, change happens and we better be ready for it. Today’s internet and digital revolution are rapidly creating new industries, categories and millionaires. At the same time, many others are being destroyed as they shrink in size or influence or even worse, go out of business. Unless of course they are asking themselves ‘what do my customers really want’ then start looking for ways to reinvent themselves in order to meet new market demands.

It’s not easy to run your own business and most likely only someone that’s experienced their business imploding can truly appreciate an owners agony. We typically have good intentions but life kicks in and as author and business coach Robert Scott puts it, we end up just “going through the daily motions, reacting to the urgent and ignoring the important.”

Will you be the creator and developer of a new opportunity this year? Or will you find your business overtaken and destroyed by something (or someone) else? The goods news….we get to choose!

When we’re hired to help coach a small business client, it’s usually because they’re feeling ‘pain’ in running their business on some level. Once of the first questions we ask them; “What is it you really want out of your business?”

As you can imagine, the answer we hear most often is “make money.” But what does that mean? Make money and do what with it? More often than not, we don’t make it a priority to define what success looks like for us, because that takes time and we’re busy putting out fires. There was a time I certainly defined it for me, but then life happened. I got married, had kids, climbed the corporate ladder and ultimately started my own business. Why? So I could have “freedom.”

Somewhere along the way, I lost track of success as I had previously defined it and became a slave to my business. Now don’t misunderstand me, I loved the work, my clients and my employees. And one of the best ways to be happy (and make money) is to do the work you love. But it was sort of like that late night spicy dinner. I loved it but it didn’t love me. In fact it was killing me! I was pulled in all directions and the business became the 800-pound gorilla, forcing me to focus on nothing but feeding IT and I began to hate my life.

I’ve since realized it doesn’t have to be like that and many of the operational hurdles we experienced were basically my fault. The buck did stop with me. I was like many entrepreneurs and had a particular skill set that worked well for my clients, so I launched out on my own. But running the day-to-day operation was not something I had been trained for, nor did I have the right people around that could help walk that out.

Implementing what I now understand as “essential business management disciplines” was not something I was doing, although we had a management philosophy all right. It was called management by crisis. So what did I do? I found a small business coach to teach me how to properly run my business and live the life I wanted. That was over 10 years ago and I’m proud to say things are going great, I’m still happily married after 27 years and I love my life.

So what’s my advice to you? Start with defining what it is you really want out of your business. Manage to your personal goals. Ask yourself about your goals for the business, your relationships and your life. What are you trying to accomplish right now? Why? What is it that you dread or makes you frustrated? Do you really really really have to be doing those things? Do you really want to pay the price for the track your on? You just many find your answers (and your options) will surprise you.

For any of us that are feeling like we’re out there on a limb by ourselves, the Small Business Administration (SBA) recently came out with some interesting new statistics that may offer a glimpse of hope that you’re not out there alone.

In essence, they say there’s nothing small about small business. We’re important to the economy, both in job and economic growth as we represent 99.7% of all employer firms and businesses that have a staff of 20 or less employ about half of all private sector employees!

The number of new small businesses has even steadily grown over the past few years with over half being home-based. More than 45% of the total U.S. private payroll is paid by small business and I know what you’re thinking. Some days it feels like you’re paying for EVERYBODY!

Small business generates 60-80% of net new jobs annually over the last decade and they report that two-thirds of new employer establishments survive at least two years, and 44% survive at least four years (results were similar for different industries).

Forbes magazine ran a review of the report and offered this observation:

Will the good times keep rolling? The SBA won’t make predictions on small-business growth, though the massive sector, as a whole tends to track–nay, some say it leads–the economy as a whole. A recent survey by credit card outfit Discover, a unit of Morgan Stanley, reports that entrepreneurs’ spirits are high heading into the next six months.

Not that growth is on every entrepreneur’s mind. According to the National Federation of Independent Businesses, a conservative-leaning lobbying group, only about half of small firms want to grow–and fewer than 10% aspire to become “growth firms.”

Now that we’ve established you’re the backbone of the economy (well, at least a piece of it) we’d love to hear your thoughts about your growth plans. If you have time, email us at contact@realbusinessmatters.com