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The Four Cs of Business Ownership

By September 10, 2014Advice, Business

4 csWhy Do We Go into business?

This is a question I ask myself often, particularly during those difficult times (and we all have them don’t we?). On reflection, I’ve actually gone into business three times, each time for different reasons, though all underpinned by my “Why”.

For most business owners the reason can boil down to four “C”s

1. Clarity

A business owner usually starts out with a clarity of vision about how something ought to be done. They may have been working in a business where for whatever reason they felt that they could do it better, or they may have an idea which is so obvious to them that they don’t know why someone else hasn’t done it before them. They have a clear view of the way forward and decide that they can only pursue that goal by doing it for themselves. The vision inspires them and drives them to risk what they have achieved financially and personally in the past in order to follow the dream.

2. Creativity

Most business owners want the freedom to come up with an idea and then implement it without recourse to an employer, or a committee. This creative spark is what makes business so exciting. As the owner of a business, it is possible to “Just Do It” in a way in which no other manner of working allows. This is linked to control of course, but the ability to let the creative juices flow is what makes business for many the only environment in which they want to operate, rather than have that flow restricted by priorities set by others.

3. Certainty

I don’t know how many businesses I have seen come into being because the owner needed a certain outcome from their efforts, and this is not just about appropriate reward. It can be due to disappointment in doors closing in their current employment, or even unemployment. Many businesses arise out of lost employment in fact, with the owner deciding that they no longer want to be subject to the vagaries of someone else’s business. With their clarity of vision as a motivator, the potential business owner is so certain of the success of their nascent enterprise that they choose this route rather than be subject to what they perceive to be confusing or distracting outside influences.

4. Control

Certainty of outcome is required for most business owners, and in order to achieve it they feel a need to be in control of their own destiny. With their hands firmly on the reins, there is no way that someone else is in charge. Nearly every business owner I have ever met is in some measure a “control freak” (me included), and that is not a bad thing. After all when you are in control, you can pursue your clear vision, exercise your creativity, and do so in such a way that lets you believe you can be certain about the outcome.

The trouble is that for many business owners, the four “C”s can disappear quickly in the wild world that is the business environment. Clarity of vision becomes constrained by economic necessity, creativity is stifled by the need to just “do the doing”, there really is no certainty, and after a time everything seems out of control.

The solution to this is to have a clear plan, documented, structured with well defined outcomes, based on sound principles and which underwrite everything the business owner does. We are not just talking about a business plan here either, because nearly all successful business owners have one of those, either when they start out or when they decide they have a real business rather than having just bought a job. For everyone in business there is so much other “stuff” they need to think about. Risk management, wealth accumulation, retirement planning, debt management both personal and business, succession planning, estate planning are just a few of them. The trouble is that the business owner is so busy keeping the business going that these other things are neglected.

It is true to say that all of the above are interlinked, and that the absence of one undermines the stability of all of the others, no matter how robust in isolation they are. How many times have we all seen a business fail because the owner fell ill, or got divorced, or had a debt crisis? How can a business survive when the owner wants to retire and how is he going to maximise the outcome? Is the business the only asset the owner can rely on to feed him and his family if something goes wrong?

So if you can’t get to all of this “stuff”, if you haven’t got it all in place, then you can have no clarity, no opportunity for creativity, no certainty or control. Someone, either you or someone you Coffeetrust, needs to look at all of this “stuff” so you can go back to why you went into business in the first place.

As to why I went into business three times? Why, the four “C”s of course. There is a fifth “C”, COFFEE, and maybe I can tell you the stories next time we have one together.

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