The sacrifices of any entrepreneur are too numerous to mention. That, understandably, explains the attachment to the business, so much so that observers can’t see the difference between the business and the owner. In Nigeria, this is why so many businesses are referred to as ‘one man business.’ The extreme alignment between business owners and their businesses is one major reason some businesses just never grow. In fact, that is what kills a lot of businesses.
When a business is referred to as a ‘one man business’, it is not because the business is owned by a man but because the business is not allowed to operate as an entity separate from the owner. To begin with, business owners should realize that despite funding the business, the business is still separate from them as individuals.
For a startup, most businesses can’t be separated from the owners or founders. This is even harder when the founder has nothing else to depend on except the income this new business generates. The transport allowance of the founder comes from the business. The feeding allowance of the founder is from the business. Personal needs and the needs of spouses and relatives are all taken care of by the business. Huge sums are taken out of the business as loans to the founder but never returned to the business.
For any business to survive and serve the purpose for which it was established, the founder must be separated from the business. The failure to do this also signifies the impending failure of the business. All over the world, some businesses have been able to stand for several years while many more have been struggling and they just die with the owner.
If entrepreneurs will build businesses that will outlive them, one very important step to take is to try as much as possible to separate the business from the founder early in the life of the business.
What are those things that show a business is still not separate from the founder? Or how can you identify a business that is like to die as soon as the founder dies? Some of them are:
Unilaterally taking all decisions for the business even when expertise is required.
Taking decisions speedily without making wide consultations.
Spend all the money from the business with the excuse of being the one who funded the business at inception.
Viewing all cash flow as income.
Refusing to be placed on salary for the sake of the business, other employees and bills to pay so that the business can keep running.
Allowing spouses and relatives to come in at any time and make their demands on the business
Relatives must be given a position in the business as soon as they graduate regardless of their competence, experience or passion.
Sometimes it’s tough for business owners to stay back and let others decide what happens in their businesses. They can’t understand why some business owners use consultants or advisers rather than be the alpha and omega of the business. On the long run, everything stops at the desk of the entrepreneur, regardless of how many people have been consulted but a more informed decision would have been taken.
If entrepreneurs will be humble enough to take salaries from their own businesses rather than take it all, they will be able to preserve the businesses they started. The business owners will end up paying for all the frivolous demands of spouses and relatives from the salaries they have taken and not from the company. If the owner of the business dies, the people just keep thinking about how to take more and that’s all they do until there is no more money to take and the business also dies.
To give the business a strong footing, business owners should have written documents explaining how the business will run, the structure of the business and who is responsible for what. When all of that is in black and white and it is followed, the absence of the owner will eventually not mean anything to the business because it would have taken a life of its own. Now you know that the unholy alliance of the founder and a business takes the breath out of the business.