Top 10 Reasons NOT to Start Your Own Business

Although I spend most of my time evangelizing about the benefits of entrepreneurship, I do want to throw a little reality out there for those who may look at it only through rose-colored glasses. Here are ten reasons why you may NOT want to start your own business:

#10: You can’t blame your lame boss for your problems. As much as you might have complained about your boss or “Management” in your corporate job, you might find yourself missing the person who takes the heat for big decisions. Whichever success or failure your company experiences is squarely on your shoulders.

#9: YOU are all the departments in your business. You must take care of product development, sales, marketing, accounting, customer service, information technology, legal, procurement and shipping. Most of us do not have strengths in all these areas, so you must quickly learn what is necessary to stay within the law and in business.

#8: No free office supplies. Did you really ever think about how much a paper clip or manila folder costs? How about a desk, no-glare monitor or printer toner? All of a sudden you will become aware of all the “hidden” expenses when you have to do it all yourself. And no, I don’t suggest sneaking out the back door of your corporate job with a big box of supplies. Bad karma! (I will sheepishly admit to taking a pad or two of post-it notes in my time, and I am sure I paid for it somehow)

#7: No safety net of a regular paycheck. Even if you do well in your business, most orders do not come in an orderly, timely manner as your paycheck does. Paying bills can be much more of a juggling act when you first start your business, unless you are sitting on a huge cash reserve for expenses.

#6: No one gives you goals and objectives. Many new business owners can get paralyzed trying to figure out what to get done in which order. Should you develop your product? Start talking to prospects? Invest in infrastructure? Build a website?

#5: You can’t pass off irate customers to Customer Service. The buck stops with you, and you have to deal with all conflict related to your business.

#4: No paid sick days. For many businesses, if you don’t work, money doesn’t come in. If you wake up with a stuffy nose and a headache, you can’t tap into one of your 20 days of paid sick leave and sleep in.

#3: Self employment tax. Or just taxes in general. Instead of delighting at a refund most tax years, as a self-employed person you have to pay self-employment tax. You also must keep excellent accounting records to make sure you run a clean operation and in case that you are audited by the IRS.

#2: Self-funded benefits. You must piece together and pay for a decent benefit package to ensure you and your family are protected against risk. You don’t have the volume discount afforded by large corporate programs, so often they are more expensive.

#1: No zone-out weeks. Although most of us would never admit it, we have all had weeks (some months!) of “zoning out” where we act like we are busy and doing important things, but in reality are shopping online, or planning a wedding or playing fantasy sports. If you zone out in your own business, nothing gets done and no money comes in. Simple as that.

If you are still charged up to become an entrepreneur after reading this list, you may just have what it takes to succeed.

Copyright 2006 Pamela Slim

Is Six Sigma Worth the Investment For a Small or Medium Sized Business?

First let’s define Six Sigma in terms we can all understand. It’s a quality control process that is data driven What that means is the result is measured in numbers, in particular, numbers of defects . To achieve Six Sigma you should have less than 3.4 defects per million opportunities. Opportunities for what? I guess a million opportunities to screw up.

The list of big companies that are utilizing Six Sigma is huge. But is it right for the small and medium business? GE and Motorola will find it hard to gain any more market share thany they already have. The best way for them to increase profits is to decrease costs. But is that really true for a small or medium sized manufacturer? Anything that strives to reduce the number of defects and increase customer satisfaction is a positive for your business. That’s a no brainer. The issue is more how deeply do you immerse your business, and your employees in to a process that can take the focus off of what they enjoy doing.

Let me state that in another way. Many of your employees are employees because that’s what they want to do. They don’t want the headache or the associated risk of running a business, or being a manager or director. Six Sigma is a very disciplined and detail oriented process. Because of this it can drastically alter the nature of an employees task. In some cases, this will be a positive. The employee may feel energized by the change and the challenge. Others will boost productivity simply due to the Hawthorne effect. A significant number will however see this as an unwelcome change to the job they want to do.THERE IS NOTHING WRONG WITH THIS!

We simply must accept the fact that not everyone is dedicated to advancing his or her career and embracing all challenges and changes. Most people work because they have to. They work so that they can support their families and enjoy time away from work with other pursuits. This is not a character flaw or a sign of laziness. It’s just the decision they’ve made, nothing more and nothing less. When we try to impose radical change on the work portion of their lives they have the freedom to move on to another company. And that’s the best case scenario. Generally what happens is the employee becomes disenfranchised and productivity suffers.

Obviously our goal isn’t to decrease productivity so what’s a small business to do? Like everything else you need to take it slow at first. The best advice is to decide what you want out of it before you even begin. Then you can make a better decision about using a Six Sigma consultant, and whether or not you need one. You should also set a realistic goal for what an acceptable defect rate should be and what the cost is for a given range of defects. Six Sigma has this process as part of it but many of the Black belt consultants seem to get caught up in reaching that magic number of zero defects. That’s a nice goal but if the cost of reaching it is ten times the cost of the defects, who cares? Go with the defect rate you have and keep cashing the checks. In short, don’t fix what isn’t broken. Fine tuning to keep or gain market share is one thing, reorganzing your entire business in a risky pursuit of a 1.5% profit increase is quite another.