1. Inability to market effectively.
2. Unrealistic 1-5 year profit expectations (includes not factoring in all costs).
3. Unrealistic expectations of time commitment.
3. Ridiculous regulations, licensing, and taxes.
TPC
October 1, 2015 12:13 pm
A myriad of reasons, I’ll name the top three in my experience.
1) The owner/family treated it like a hobby or family piggybank instead of a business or long term venture.
2) Lack of professionalism. Either in service, quality, or target market, for whatever reason these “entrepreneurs” are the type that really should be followers, not leaders. My wife and I call them “serial-entrepreneurs”. They somehow manage to found business after business, but things never last more than 5 years, and as soon as one company folds they have another running. They can keep their own bills paid, but never hire any customers, and never do very good business.
3) Out-compete / Laws – I lumped these in together because they often run hand in hand. A large corporation moves in hurting all small businesses in a wide area, and then the local city/county councils pass onerous laws targeting small businesses but giving large businesses tax breaks, giving said large businesses a massive competitive advantage.
The third one hasn’t happened much in my area lately, it mostly took place in the 90s. The first two though, those happen all the damned time.
TPC
October 1, 2015 12:14 pm
#2, last sentence – “never hire any employees, and never have many customers.”
Sorry about that.
Persnickety
October 1, 2015 12:16 pm
Every reason under the sun. From what I’ve seen, most that fail, fail because some part of their product offering sucked, and they had no meaningful business plan. I am regularly amazed at the variety of small businesses that managed to survive while offering stupid and overpriced products and run by out-of-touch owners.
jamesthewanderer
October 1, 2015 12:20 pm
They usually start because someone had vision, and close because that person retired, couldn’t budget or lost the vision, and no one else on board had a better vision. Sometimes great trends (automobiles were invented, and blacksmiths eventually declined) intervene, and sometimes they are out-competed.
I’ve known a few that survived, and they are all scrambling now.
Dutchman
October 1, 2015 12:37 pm
First of all there aren’t many opportunities for small businesses. Big box stores and category killer stores have skimmed most of the profitable customers. And even the big chains are consolidating. As an example: office supplies. In 1990, I used to buy them from any number of small office supply places. Now Office Max has merged with Office Depot. There are now only two places to buy office supplies: Office Depot and Staples. All the little guy’s are out of business. It pisses me off that I can’t buy the same pens.
Also, many vertical markets have been franchised: Visiting Angles (home heath care), Blinds, Handyman services come to mind.
Small businesses are left to do the ‘pick up work’, that is unprofitable. This is usually grunt work. They do it for a while, and eventually fail.
For a business to be successful you need to have a steady stream of new customers, and it really helps if you have a product that has a ‘second sale’ from existing customers.
starfcker
October 1, 2015 12:43 pm
Gold star for dutch
NickelthroweR
October 1, 2015 12:59 pm
Greetings,
I am a small business owner. There are exactly two people in the partnership – myself and my long-time business partner. That’s it. Now, I could go on for days about the hurdles we face but I’d like to talk about one. Word Trolls.
In my industry, there are two big powerhouse trade shows that happen twice a year – AES and NAMM. It is at those shows that all the new toys get introduced to the public and it is fun to wander around and talk to other industry professionals or chat with the artists.
Now, the thing that most recently got me that I was unaware of was the Word Trolls. Word Trolls are hired to walk around and look at each and every new piece of gear to see if forbidden words are being used. Someone caught using a forbidden word can now be strong-armed into handing over lots of cash cause, after all, the product is already sitting there finished.
Oh, let me back track for just a second and explain something. There are companies that just buy up Trademarks the same way that that asshole bought up the rights to a 50 year old drug and then raised the price to $750 a pill. Words that are in common use today may not have been used much if at all at the time of the Trademark or patent.
Anyway, I got “caught” using the word “TILT” on the faceplace of my product because, well, I have a tilt eq on my product. There is no other way to describe it other than what it is. Of course, I was threatened with a lawsuit unless I handed over a bunch of cash but I refused and, instead, destroyed all of my faceplates at a cost of around $3000. Then, of course, I had to have new faceplates made.
The real problem, though, was trying to find out what words I could use. Now that I was “smart”, I started doing searches and I discovered, for example, that the word FOCUS has 500+ different trademarks attached to it. Trying to figure out if I was violating any of those by putting that word on my faceplate would require an advanced law degree. The mumbo jumbo reached all the way to the moon.
I really had to account for crap like this in order to keep the doors open. I always pad the cost of my items to reflect this bullshit factor. It comes at me from every direction.
Yeah, I’m guessing that many businesses fail because they do not take into account all the rules and regulations required.
Anonymous
October 1, 2015 1:08 pm
Frequently, the owner has no idea how hard it will be or how long it will be before he actually becomes profitable enough to self sustaining without needing outside income to subsidize his business.
Another mistake is thinking everything you make at first is clear profit, then some major expense comes along -i.e. expensive equipment fails and needs replacement or legal issues arise- and there is no money set aside to cover it.
It usually takes a failure or two before a neophyte entrepreneur learns the unexpected pitfalls and establishes a profitable business that can weather them.
Thaisleeze
October 1, 2015 1:14 pm
Over estimate revenues, under estimate expenses
Montefrío
October 1, 2015 1:35 pm
“Nickle”: Could you please elaborate further on your comment, maybe even write a post? What you wrote is new to me and I was a bit stunned. Things there are much worse than I’d imagined. Thanks for that fascinating but chilling info!
Backtable
October 1, 2015 1:47 pm
NickelthroweR
I’d like to read more, too. I had heard something of this recently and didn’t pay it much attention but your experience with it sounds alarming – regardless, if this happened to me I’d be seriously pissed. And obviously, the costs involved to fight back can be astronomical.
It sounds similar to what Monsanto has done with people attempting to sell Heirloom seeds. Asshats just can’t keep themselves from quashing the slightest perceived threat, even where there isn’t one.
ASIG
October 1, 2015 1:53 pm
Cash flow management.
Everything could be going along fine and then a slowdown in the economy happens and if there is too little of a buffer in capitol a cash flow squeeze can put a company out of business.
In a down turn:
1 Customers reduce purchases
2 Receivables that were consistently being paid promptly in 30 days now get stretched out to 60 and 90 days. And a few customers go out of business and don’t pay at all.
3 Business loans that were available for the asking prior to the down turn are no longer available.
If the overall cost structure is such that it can’t be cut back sufficiently to be serviced by the reduced income, you’re out of business.
TE
October 1, 2015 1:58 pm
As a current small (manufacturing, no less) business owner, the former accounting/admin for numerous other small businesses, plus a 3 year stint as the outside bookkeeper for 100+ businesses, I’d say I’ve seen it all.
Small businesses fail for all the same reasons individuals go bankrupt.
PLUS the forced failures from government intervention/regulation.
I, personally, know of three businesses that closed because they were forced to upgrade their buildings and the owners figured out the new debt on a building worth less everyday was not a solid business plan. Last straw and their employees all lost their jobs. Thanks City! Buildings have sat empty for a decade, recovery ya’ know.
For the first time in our entire HISTORY the birth/death ratio has flipped and more small guys are dying, then being born, every year.
So much has already been gifted to the oligarchs, great story @Nickel, and much of what remains has been put into licensing and regulatory hell. What most people don’t realize is that things like Ragu Spaghetti Sauce started in a home, and grew there for a number of years, today that absolutely cannot happen, and, in fact, is regulated AGAINST.
All in the name of safety, of course.
Here’s a conundrum that no one ever considers. Prohibition wiped out hundreds of thousands of jobs and hundreds, if not thousands, of small business OVERNIGHT. Then the “Roaring ’20s” and cheap bankster graft/loans/financing AND the Federal ramp up/overspend to combat alcohol, created the good times (for the few and on the surface) leading up to the depression.
Doesn’t that sound awful similar to what has happened since we shipped our jobs overseas and overregulated everything else? No?
Because we are not told, nor would we consider it, we can’t see the truth. Prohibition wiped out an entire strata of the middle class and made it easier for the monied interests, and government, to collude and gobble up our wealth.
Fair trade and safety for all have finished us off.
As this is a “democracy” and the VAST majority of Americans have no idea why we had a vibrant, growing middle class, nor why freedom and the right to take risks is so important to our greatness, there is little hope that this is going to change.
Everybody is too far bought into the “safety” paradigm of Federal Agencies. Their actual trackrecords show that they are ineffectual if not downright dangerous, but that will NEVER matter to the majority.
They will keep taking their poisons, listening to their recommendations, even as their lives deteriorate. Then they will blame the gays, or Arabs, or Mexicans, or even us Whites, for all the ills.
Until the truth is accepted as fact I’m not very hopeful of some kind of American Renaissance. You can’t rebuild what you don’t know you lost.
Anonymous
October 1, 2015 2:05 pm
Why do small businesses fail?
They foolishly try to play by the rules in a system that is set up – intentionally or otherwise – to grind them into the ground, after sucking the last dollar out of their pocket.
Dutchman
October 1, 2015 2:25 pm
I’m a software developer, and I had a successful and very profitable business for twenty years.
Several of my systems added / subtracted TOD (time of day) and dates. These are common algorithms. Well there was this prick in Cuntneticut who had a patent on a time clock. He would try and extort money, by claiming he had a patent on computing the difference in two times. He got money from some people. I answered the lawyer (who sent the letter) telling them that my algorithm was proprietary and that if his client had the patent on computing time differential, then all the calculator manufacturers must have patents on addition. They never bothered me again.
I had a good 20 years. Software is now a large company product – just like cars or planes.
I think the Uber drivers are going to realize that between the wear and tear on your car, maintenance, and gas, and they are contractors (no benefits), and they have to pay over 12% wage tax, that it’s really not profitable. I also think that insurance companies will begin asking if you drive for hire – and either boost your premium, or cancel your insurance.
Backtable
October 1, 2015 2:38 pm
NickelthroweR and TE
You guys are exactly right.
I’ve been self-employed for 25yrs. and it has only gotten worse, each and every year.
Slowly at first, but then the 90s rolled in, and it went downhill from there: increased regulations; ludicrous, never-ending new taxes, (particularly those hidden as “fees”); state and federal monthly and quarterly filing requirements (asinine beyond belief – owe no taxes this quarter but fail to file? That’ll be $250, please. “Thank you very little.”); the insurance b.s.; the record keeping for potential audits; and just the everyday grind of having to wear 4-5 hats at once.
It makes you appreciate the value of a buck and pissed quickly with those who don’t, e.g., The FSA-types that line government hallways seeking a ticket to ride “da benefits train”…and the dense-as-speed-bump drones that process their paperwork…if more Americans experienced the everyday reality of running their own business, they’d have a completely different take on our government and the out-of-control cronyism and rectal-defilade spending it doles out.
Government, by its very nature, was supposed to exist to foster commerce, not impede it. The barriers to entry, the purposeful efforts to kill small businesses – this government does not want the small business owner to survive. Period.
It’s bullsh*t. And yet since fewer than 2.5 million small business owners make more than $50,000/yr., they have no pull. Screw it.
Just staying even in this environment is a full-time job.
NickelthroweR
October 1, 2015 2:40 pm
Greetings,
Yes, things are that bad.
Imagine if you invented something but the words you wished to use to describe and promote your new idea were owned by some faceless company? Perhaps you’ve got a time saving/money saving product but you can’t even speak about it for fear of a lawsuit.
That is why most inventors end up selling their ideas and accepting 5% or less in royalties.
Did you know that the ~3% of the people that work for themselves come up with 70% of the new inventions? Corporations and government, with 97% of the workforce account for the other 30%. Of course, the number of people working for themselves is steadily falling so we must ask ourselves what that means with regards to progress.
What will happen when being in business for yourself is impossible? I’ll tell you, Corporate America, with its competition gone, will stop investing in innovation all together and only focus on profit. When this finally comes about, we’ll enter another Dark Age as it will be impossible to express an original thought or idea. What we will see is a new Feudalism except it will not be based on ownership of land but on ownership of Intellectual Property.
Backtable
October 1, 2015 2:52 pm
NickelthroweR
“That is why most inventors end up selling their ideas and accepting 5% or less in royalties.”
Exactly, because even if, IF, you’re able to bring an invention to market on your own, not only will you be facing ongoing b.s. from bigger competitors, but smaller ones that steal the idea and manufacture it outside the US for resale here – and good luck to any small business that thinks it has pockets deep enough to stop that in court!
It’s simply the way of the world today. And it sucks. It kills a lot of what would otherwise be
value-added innovation.
Tommy
October 1, 2015 2:53 pm
They over estimate the demand for their product/service, and do not have the capital to stay afloat yeilding a very quick and high percentage of first year failures. Rinse, lather, and repeat.
If that doesn’t sink it, dreamers think that if they like billboards – thats where they will (over)spend their “marketing dollars”. Lately most just say ‘fuck it, I’ll use social media’ and to their credit – its cheaper and easier to target the right audience….but old habits die hard.
These days, horseshit demographics are playing out in a huge way – as startups see established businesses as ‘proof’ there’s money to made, big money, and jump in – weakening everyone in the arena.
The established business is now fending off attacks promulgated by cheap money and same-store sales comparisons resulting in every single fucking ‘rock’ being flipped over looking for an opportunity of what are euphemistically labeled, ‘incremental sales’.
But, demographics are the killer, make no mistake.
constman54
October 1, 2015 3:09 pm
I could right a novel on this one.
It is fucking hard to run a business. Especially from the ground up. My brother inherited the family business and has done very well. This is not always the case. Many times the next generation runs the business into the ground. Right now it even looks like my brother’s son is going to be able to keep things going.
Me, my dad died when I was 20. And I foolishly said I wanted nothing to do with the family business. Why? Because that what 20 year old dummies do. So I started my own business from the ground up and have made every mistake known to mankind along the way.
First, I had a business partner. Mistake #1. If you need a partner you are not ready to start a business. Having a business partner is like having another wife/ marriage and the divorce is UGLY.
Get ready to work your ASS OFF every day. You are on even when you don’t feel like it. There are no days off. That doesn’t mean you never go away or get away, but your finger has to be on the pulse of the company ALL THE TIME. Or you will watch money you worked hard to acquire disappear. ALMOST every small business person I know has suffered through an embezzlement of some kind. For me it was payroll tax money. It pretty much cost me the partnership and everything I own.
When you are running 80-100k a week in payroll and someone is steeling your payroll tax money seven figures adds up in a hurry. Someone is in jail today, but that doesn’t get the money back or pay the tax bill. What does it all come done to?
Three things!! Infrastructure. Infrastructure. Infrastructure.
I am great at building. Everyone customer want us to do their next job. I SUCK AT ACCOUNTING AND BOOKKEEPING. You have to find people to fill in the gaps. And you MUST keep your eye on the ball at all times. You have to know what everyone is doing. I hate accounting, but I know haw to read a balance sheet.
Mentor. FIND ONE and then become one. Your mentor will be with you as long as you run your company. He will keep you accountable and out of trouble. And then find someone to mentor. You must give back. I found my mentor after I lost seven figures to embezzlement etc…
Know your niche. I went from over 18,000,000.00 per year down to 5-7 mil per year. It is much easier to manage and have the proper infrastructure at 5-7. At 18 mil I was in no mans land. I either needed to expand to triple that or??? The infrastructure to run 18 mil is almost the same as at 40-50 mil. The overhead was killing me.
I now have way fewer employees, much lower overhead and actually make more money. Bigger is not always better. At least in my case.
The four principles of business that my mentor taught me and that everything builds on are:
1) Family First, Business First
2) Always Supportive, Slightly Detached, Always, always always ABSOLUTELY FUCKING EQUAL
3) The truth the right person at precisely the right time
4) Never expect the company to do for you what you cannot do for yourself
Again, a book could be written on each of those principles, but I will stop typing and get back to work
Also, you must work your triangle. Mind/Body/Spirit.
Sightseer
October 1, 2015 3:15 pm
What the hell am I reading here?
Look at a chart of small business failures over the last 30 years, and compare the last 8 with the prior years.
You are telling me all of these guys who were in small business “forgot” what they were doing somehow? What? What happened? They got bumped on the head, or amnesia?
No, you are looking at a chart of businesses crushed by external forces.
In 2008, 4th quarter, our business income fell 80%
In 2009, First, & Second quarter business fell by 100%. Yes 100%, the phones literally didn’t ring for months, and when business came back, the “new normal” was 20% of the old levels. 25 people were fired and to this day business never recovered, we are a one man shop now, doing 5% of the business we did in 2007.
No realistic business plan could ever get you ready for those kinds of drops.
KaD
October 1, 2015 3:19 pm
The SO lost his job at a small IT company because the owner was far more concerned about having an impressive office space in a costly area than the fact that they lost their #1 client, then #2, etc.
Westcoaster
October 1, 2015 3:31 pm
Lack of capital. Since small biz employs the greatest number of workers, if the Fed really was sincere in their efforts to improve the economy, small biz is where the helicopter drop should focus.
Other than angel investors about the only resource for small biz is the SBA. I’ve been through the process and can tell you it’s a long, dark road to a successful end, and you’ll sign your business and your life away in the process. Not good to be under the gov’s microscope. When I was through signing the papers, I felt like I had endured a colonoscopy.
Westcoaster
October 1, 2015 3:36 pm
@Sightseer: I feel your pain. I didn’t have 25 employees in my current biz, but the % revenue drop is comparable. Just scraping by.
I wonder how many millions have experienced the same.
kokoda
October 1, 2015 4:07 pm
Westcoaster got the correct answer.
Most failures of small business are due to being under capitalized. Period!
Dutchman
October 1, 2015 4:33 pm
@NickelThrower: With all the outsourcing to India / China there will be no innovation. There are no employees – just Turd World contractors – these people don’t know your business, or have any reason to think about how to improve it. This will surely stifle innovation.
fear & loathing
October 1, 2015 5:16 pm
i was in the game for 35 years, yet the writing was on the wall. no debt. mirco business, it never was my first desire, it did pay for the farming. yet at a point the realization you are being told by the state they were doing you a favor by allowing you to work. the reeducation camp for a fee finally was the last straw. even a million dollars in insurance seemed inadequate though never did a legal issue arise. i quit in 2008, the under the table guys and the bigger outfits had one less to compete with. i sleep very well at night, yet my experience was lost to those who may have benefited from it. all risk up front, long before income was created, construction just stopped, like the late 70’s. the above comments hit the nail on the head, lots of reasons why business’s either fail or simply stop. the liberals just could not grasp why we no longer were there to please their needs. conservatives rarely needed an electrician,
IndenturedServant
October 1, 2015 5:31 pm
Mostly because the people going into business are morons. Around here in the last few years I’ve seen stores who specialize in Bundt Cakes, high dollar imported Italian pottery and now high end ice cream come and go. They may have made it in a booming economy but not now.
Dollar stores and check cashing places are going out of business right now so you better have a product that is in high demand like drugs or alcohol.
Llpoh
October 1, 2015 5:51 pm
Lots of folks have mucj of the story, as pieced together above.
1) small business requires a huge breadth and depth of skills. Most people do not have that. It is too expensive to hire enough folks to cover the gaps.
The skills include hr, finance, accounting, sales, marketing, engineering, manufacturing, planning, etc. the small business person needs a vast range of these, plus an intimate knowledge of govt regs.
2) govt regs. NUFf said.
3) failure to understand cashflow and manage it
4) insufficient capital
5) no or insufficient people management skills
6) inability to work the long hours required
7) starting a business with no barrier to entry, which allows competitors foreign and domestic to swoop in
8) bad debts. Do not underestimate the impact of even one dead beat customer.
9) employees. No one in their right mind would want one.
There are many more reasons, as mentioned above.
Number 1 above is the biggest reason small businesses fail. The rest are generally subsets of that, really. It is damn hard to run a small business, and the skills required are many, are hard to get, and any holes in the skill/knowledge/experience base will result in bad things happening.
Nice thread.
Llpoh
October 1, 2015 5:54 pm
Kokoda – lack of capital is a big reason. But in my experience it is the failure to manage cashflow that most often kills oherwise viable businesses.
yahsure
October 1, 2015 6:47 pm
Location,Location Location. Also it helps if you have a society of people with jobs and money to spend.
fear & loathing
October 1, 2015 7:46 pm
i maybe the only one here who never planned to be self employed, arguement with boss after 10c raise which in turn i was making less, so i ease back to 37 hours. he did not approve and said i would be begging for my old job. i was motivated, though most unprepared for the venture. made enough in four years to sell out and buy a farm, we all know the returns on that investment. going like hardscapple for awhile till it went solo, so i had to return to all that i knew and some people once they are their own boss working for others is not quite the same.
NickelthroweR
October 1, 2015 8:53 pm
Greetings,
@Fear & Loathing
After you are self employed for a while, corporate America will not hire you back. I’ve had numerous opportunities to talk to HR management from some very large corporations and they told me that self employment was a “red flag” and that resumes that had self employment on them or as the most recent of work experiences were never considered. Can you blame them?
Once you jump on the self employment train, it is very hard to go back to work for someone else. I’ve never been able to do it. No one in a million years would ever consider hiring me. Case in point:
The disaster that was 2008 shut my business down. I thought I could, perhaps, find work with a small company that was looking for someone that could wear a lot of hats. Anyway, I got myself an interview with the owner of a small media company and about midway through the interview he stops, looks at me and say, “I can’t hire you.” I asked him why that was so and he told me, “If I hired you then I’d be working for you two weeks from now.”
I thought about that for a moment and came to the conclusion that he was right. His first question of “where do you see yourself in five years?” was answered with, “right where you are sitting now but it ain’t gonna take five years”. Worse still, in the short time that we spoke, I had already planned out the next three months to include reviews and pay raises. I had told him that I could easily run his office (which was true) and that I would need him to focus on the sales staff and sales since I planned to increase throughput and would need a lot more work so I could keep myself busy.
Needless to say, people do not expect that at a job interview. They expect you to crawl in and be meek and humble. The last person in the world that they want around is someone that has experience in business and knows how the game is played.
Llpoh
October 1, 2015 9:06 pm
Nickel – your interview skills suck.
starfcker
October 1, 2015 9:16 pm
Lots of good stuff here. My two cents. I’m only tslking 2008 till present. Most of the failure I’ve seen revolves around two things. First and most critical was understanding the nature of subprime, and the lack of liquidity grinding things to a halt. A lot of people perceived this as a normal short term dip, and treated it as such. Many people didn’t mind supporting their business for a while, figuring if they held on while weaker players
Stephanie Shepard
October 1, 2015 9:25 pm
Llpoh- People like Nickle are an owners wet dream but a managers worse nightmare. Many managers I’ve come across are more interested in self perseverance than what is best for the business. I’ve hated a majority of my managers in the past just because they do realize they are expendable and will do anything to cut down their employees. Thank goodness I don’t have to put up with that crap anymore.
starfcker
October 1, 2015 9:28 pm
Downsized, they would be well positioned to capitalize on the uptick. Fatal mistake for many. Realizing that this would be a minimum of five years, I set out to scrutinize, renegotiate, or cut out every recurrent expense. Get lean, and get there fast. Most people didn’t want to do that. It’s painful to mothball operations, teams of skilled and trusted people, and quite a hostile activity to renegotiate loans, contracts, leases, mortgages.
starfcker
October 1, 2015 9:35 pm
In the beginning, all people heard was I wanted to give them less money, within a couple of years, people were grateful that I was willing to give them money, and capable of paying bills on time. Friends of mine who didn’t downsize quickly, are now walking dead. They are running out of resources, credit is maxed, and the killer, lots of expensive equipment is running out of useful life. Checkmate
Llpoh
October 1, 2015 9:44 pm
Steph – you are correct.
My point is that in an interview the goal is to get a job offer. Nickel obviously either failed to understand that or did not want the job. His answers and attitude meant he was never getting that job.
NickelthroweR
October 1, 2015 10:30 pm
@Llpoh
No, I’m used to be hired for projects often as the project manager. I can’t turn that off just because I’m in an interview. You are wrong in that I did not want the work but I’m not going to sugarcoat what I want. I’d rather tell someone right up front what it is I plan to do. It isn’t that hard to say that I’m going to do A, B & C and do so by this date and when I do, I expect D, E & F.
I ran into this guy three years later on a project I was working on and I learned that he went out of business two years after our interview. The very things I told him I was going to do never happened because he hired weak timid passive people that were just there to punch a clock.
Hire a bunch of non aggressive yes men and watch your business collapse. Owners do not live in gilded cages and need someone to challenge and motivate them. I’m lucky in that I have a business partner that challenges me to no end. I’d like to think I push him even harder because, after all, you don’t get to do Katy Perry’s world tour or put a bunch of Platinum Albums on your wall because OK is good enough. Not in this business.
Stephanie Shepard
October 1, 2015 10:52 pm
Llpoh- I really wouldn’t care whether someone was perfect in an interview. That’s a shallow assessment of an employee’s potential. I’d be more interested in what they could do for my company rather than if they were agreeable. Agreeable people kill businesses all the time.
Llpoh
October 1, 2015 10:52 pm
Nickel – I am glad you are doing well.
But my point stands. The goal is to get the offer. Then you get to decide whether to take it. You did not read the particular situation well, or you did not care if you got the job, if it was not on your terms, which is fine.
I have been interviewed many many times. Not recently, though. But at the end of my working for people career I was getting offers near enough 100% of the time. It is possible to convey the same things in a way that is not threatening : ie. something like ” my goal is to be able to assume enough responsibility that you will be able to focus on those things you deem most important for growing the business” etc.
If you indeed told the guy “I need you to do such and such” then I would expect no offer to be forthcoming. It is possible to be very aggressive and yet convey absolute support for the boss/owner.
Llpoh
October 1, 2015 10:59 pm
Steph – no decent boss expects perfect. But there are few decent bosses. Interviewing is a game. It can be easily played, once a person learns the rules.
The interview is all about getting the offer. What you think, I think, or anyone else thinks is of no consequence with respect to what hiring managers should do, as the reality is most managers/business owners are incompetent.
The interviewee needs to work within that reality. Read the situation, play the game, get the offer, then decide if you will take it, negotiate it, etc.
Llpoh
October 1, 2015 11:06 pm
Steph – agreeable people are critical to businesses. I love agreeable employees. They are truly important. You are mistaken. They are immensely valuable.
But they have to be in the right role, and their authority needs to be controlled. They must be required to pass decisions up the chain – “sorry, you will need to speak with Steph/llpoh about that”.
Assholes like me are a negative, generally, when dealing with low-level managers, salesmen, purchasers, etc. Agreeable people are what is needed in those situations.
Stephanie Shepard
October 1, 2015 11:12 pm
Every type of employee you hire comes at a price in some way. The downside to having too many agreeable people is you end up with too many peter principle candidates in higher positions. It reminds me of the useful Nazi idiots that were “just following orders”. This why our economy is in the shitter is too many high level executives that were just following orders. Too many high level government drones just following orders.
Llpoh
October 1, 2015 11:18 pm
Steph – the world is full of bad managers and workers. Therein lies opportunity for the competent. I do not disagree with your assessment – it is why I run a lean organization.
Stephanie Shepard
October 1, 2015 11:26 pm
Llpoh- I can’t argue with running a lean organization. Quite frankly, and this took me a few years to realize to the extent that it’s true, is most jobs are fluff jobs with busy work. That’s why the largest job growth in the U.S. has been hospitality jobs. They just physically need someone in a position. They just have to show up. It is those agreeable people with no skills that are about to get chewed up and spat out as the job layoffs begin to accelerate. I foresaw this and exited stage left.
starfcker
October 1, 2015 11:49 pm
Llpoh, in my own business, I’m not allowed to deal with customer service on the phone. They literally take the phone away from me. I must not be as agreeable as I think i am.
Llpoh
October 2, 2015 12:08 am
Star – why, I am stunned to hear that. I mean, you are a truly mild and calm man. (Sarc off)
That is my point – that is why agreeable folks are needed. They handle the things that do not require tough love. And star and I save ourselves the angst.
One of my customers recently called me intransigent. Imagine that – me intransigent.
1. Inability to market effectively.
2. Unrealistic 1-5 year profit expectations (includes not factoring in all costs).
3. Unrealistic expectations of time commitment.
3. Ridiculous regulations, licensing, and taxes.
A myriad of reasons, I’ll name the top three in my experience.
1) The owner/family treated it like a hobby or family piggybank instead of a business or long term venture.
2) Lack of professionalism. Either in service, quality, or target market, for whatever reason these “entrepreneurs” are the type that really should be followers, not leaders. My wife and I call them “serial-entrepreneurs”. They somehow manage to found business after business, but things never last more than 5 years, and as soon as one company folds they have another running. They can keep their own bills paid, but never hire any customers, and never do very good business.
3) Out-compete / Laws – I lumped these in together because they often run hand in hand. A large corporation moves in hurting all small businesses in a wide area, and then the local city/county councils pass onerous laws targeting small businesses but giving large businesses tax breaks, giving said large businesses a massive competitive advantage.
The third one hasn’t happened much in my area lately, it mostly took place in the 90s. The first two though, those happen all the damned time.
#2, last sentence – “never hire any employees, and never have many customers.”
Sorry about that.
Every reason under the sun. From what I’ve seen, most that fail, fail because some part of their product offering sucked, and they had no meaningful business plan. I am regularly amazed at the variety of small businesses that managed to survive while offering stupid and overpriced products and run by out-of-touch owners.
They usually start because someone had vision, and close because that person retired, couldn’t budget or lost the vision, and no one else on board had a better vision. Sometimes great trends (automobiles were invented, and blacksmiths eventually declined) intervene, and sometimes they are out-competed.
I’ve known a few that survived, and they are all scrambling now.
First of all there aren’t many opportunities for small businesses. Big box stores and category killer stores have skimmed most of the profitable customers. And even the big chains are consolidating. As an example: office supplies. In 1990, I used to buy them from any number of small office supply places. Now Office Max has merged with Office Depot. There are now only two places to buy office supplies: Office Depot and Staples. All the little guy’s are out of business. It pisses me off that I can’t buy the same pens.
Also, many vertical markets have been franchised: Visiting Angles (home heath care), Blinds, Handyman services come to mind.
Small businesses are left to do the ‘pick up work’, that is unprofitable. This is usually grunt work. They do it for a while, and eventually fail.
For a business to be successful you need to have a steady stream of new customers, and it really helps if you have a product that has a ‘second sale’ from existing customers.
Gold star for dutch
Greetings,
I am a small business owner. There are exactly two people in the partnership – myself and my long-time business partner. That’s it. Now, I could go on for days about the hurdles we face but I’d like to talk about one. Word Trolls.
In my industry, there are two big powerhouse trade shows that happen twice a year – AES and NAMM. It is at those shows that all the new toys get introduced to the public and it is fun to wander around and talk to other industry professionals or chat with the artists.
Now, the thing that most recently got me that I was unaware of was the Word Trolls. Word Trolls are hired to walk around and look at each and every new piece of gear to see if forbidden words are being used. Someone caught using a forbidden word can now be strong-armed into handing over lots of cash cause, after all, the product is already sitting there finished.
Oh, let me back track for just a second and explain something. There are companies that just buy up Trademarks the same way that that asshole bought up the rights to a 50 year old drug and then raised the price to $750 a pill. Words that are in common use today may not have been used much if at all at the time of the Trademark or patent.
Anyway, I got “caught” using the word “TILT” on the faceplace of my product because, well, I have a tilt eq on my product. There is no other way to describe it other than what it is. Of course, I was threatened with a lawsuit unless I handed over a bunch of cash but I refused and, instead, destroyed all of my faceplates at a cost of around $3000. Then, of course, I had to have new faceplates made.
The real problem, though, was trying to find out what words I could use. Now that I was “smart”, I started doing searches and I discovered, for example, that the word FOCUS has 500+ different trademarks attached to it. Trying to figure out if I was violating any of those by putting that word on my faceplate would require an advanced law degree. The mumbo jumbo reached all the way to the moon.
I really had to account for crap like this in order to keep the doors open. I always pad the cost of my items to reflect this bullshit factor. It comes at me from every direction.
Yeah, I’m guessing that many businesses fail because they do not take into account all the rules and regulations required.
Frequently, the owner has no idea how hard it will be or how long it will be before he actually becomes profitable enough to self sustaining without needing outside income to subsidize his business.
Another mistake is thinking everything you make at first is clear profit, then some major expense comes along -i.e. expensive equipment fails and needs replacement or legal issues arise- and there is no money set aside to cover it.
It usually takes a failure or two before a neophyte entrepreneur learns the unexpected pitfalls and establishes a profitable business that can weather them.
Over estimate revenues, under estimate expenses
“Nickle”: Could you please elaborate further on your comment, maybe even write a post? What you wrote is new to me and I was a bit stunned. Things there are much worse than I’d imagined. Thanks for that fascinating but chilling info!
NickelthroweR
I’d like to read more, too. I had heard something of this recently and didn’t pay it much attention but your experience with it sounds alarming – regardless, if this happened to me I’d be seriously pissed. And obviously, the costs involved to fight back can be astronomical.
It sounds similar to what Monsanto has done with people attempting to sell Heirloom seeds. Asshats just can’t keep themselves from quashing the slightest perceived threat, even where there isn’t one.
Cash flow management.
Everything could be going along fine and then a slowdown in the economy happens and if there is too little of a buffer in capitol a cash flow squeeze can put a company out of business.
In a down turn:
1 Customers reduce purchases
2 Receivables that were consistently being paid promptly in 30 days now get stretched out to 60 and 90 days. And a few customers go out of business and don’t pay at all.
3 Business loans that were available for the asking prior to the down turn are no longer available.
If the overall cost structure is such that it can’t be cut back sufficiently to be serviced by the reduced income, you’re out of business.
As a current small (manufacturing, no less) business owner, the former accounting/admin for numerous other small businesses, plus a 3 year stint as the outside bookkeeper for 100+ businesses, I’d say I’ve seen it all.
Small businesses fail for all the same reasons individuals go bankrupt.
PLUS the forced failures from government intervention/regulation.
I, personally, know of three businesses that closed because they were forced to upgrade their buildings and the owners figured out the new debt on a building worth less everyday was not a solid business plan. Last straw and their employees all lost their jobs. Thanks City! Buildings have sat empty for a decade, recovery ya’ know.
For the first time in our entire HISTORY the birth/death ratio has flipped and more small guys are dying, then being born, every year.
So much has already been gifted to the oligarchs, great story @Nickel, and much of what remains has been put into licensing and regulatory hell. What most people don’t realize is that things like Ragu Spaghetti Sauce started in a home, and grew there for a number of years, today that absolutely cannot happen, and, in fact, is regulated AGAINST.
All in the name of safety, of course.
Here’s a conundrum that no one ever considers. Prohibition wiped out hundreds of thousands of jobs and hundreds, if not thousands, of small business OVERNIGHT. Then the “Roaring ’20s” and cheap bankster graft/loans/financing AND the Federal ramp up/overspend to combat alcohol, created the good times (for the few and on the surface) leading up to the depression.
Doesn’t that sound awful similar to what has happened since we shipped our jobs overseas and overregulated everything else? No?
Because we are not told, nor would we consider it, we can’t see the truth. Prohibition wiped out an entire strata of the middle class and made it easier for the monied interests, and government, to collude and gobble up our wealth.
Fair trade and safety for all have finished us off.
As this is a “democracy” and the VAST majority of Americans have no idea why we had a vibrant, growing middle class, nor why freedom and the right to take risks is so important to our greatness, there is little hope that this is going to change.
Everybody is too far bought into the “safety” paradigm of Federal Agencies. Their actual trackrecords show that they are ineffectual if not downright dangerous, but that will NEVER matter to the majority.
They will keep taking their poisons, listening to their recommendations, even as their lives deteriorate. Then they will blame the gays, or Arabs, or Mexicans, or even us Whites, for all the ills.
Until the truth is accepted as fact I’m not very hopeful of some kind of American Renaissance. You can’t rebuild what you don’t know you lost.
Why do small businesses fail?
They foolishly try to play by the rules in a system that is set up – intentionally or otherwise – to grind them into the ground, after sucking the last dollar out of their pocket.
I’m a software developer, and I had a successful and very profitable business for twenty years.
Several of my systems added / subtracted TOD (time of day) and dates. These are common algorithms. Well there was this prick in Cuntneticut who had a patent on a time clock. He would try and extort money, by claiming he had a patent on computing the difference in two times. He got money from some people. I answered the lawyer (who sent the letter) telling them that my algorithm was proprietary and that if his client had the patent on computing time differential, then all the calculator manufacturers must have patents on addition. They never bothered me again.
I had a good 20 years. Software is now a large company product – just like cars or planes.
I think the Uber drivers are going to realize that between the wear and tear on your car, maintenance, and gas, and they are contractors (no benefits), and they have to pay over 12% wage tax, that it’s really not profitable. I also think that insurance companies will begin asking if you drive for hire – and either boost your premium, or cancel your insurance.
NickelthroweR and TE
You guys are exactly right.
I’ve been self-employed for 25yrs. and it has only gotten worse, each and every year.
Slowly at first, but then the 90s rolled in, and it went downhill from there: increased regulations; ludicrous, never-ending new taxes, (particularly those hidden as “fees”); state and federal monthly and quarterly filing requirements (asinine beyond belief – owe no taxes this quarter but fail to file? That’ll be $250, please. “Thank you very little.”); the insurance b.s.; the record keeping for potential audits; and just the everyday grind of having to wear 4-5 hats at once.
It makes you appreciate the value of a buck and pissed quickly with those who don’t, e.g., The FSA-types that line government hallways seeking a ticket to ride “da benefits train”…and the dense-as-speed-bump drones that process their paperwork…if more Americans experienced the everyday reality of running their own business, they’d have a completely different take on our government and the out-of-control cronyism and rectal-defilade spending it doles out.
Government, by its very nature, was supposed to exist to foster commerce, not impede it. The barriers to entry, the purposeful efforts to kill small businesses – this government does not want the small business owner to survive. Period.
It’s bullsh*t. And yet since fewer than 2.5 million small business owners make more than $50,000/yr., they have no pull. Screw it.
Just staying even in this environment is a full-time job.
Greetings,
Yes, things are that bad.
Imagine if you invented something but the words you wished to use to describe and promote your new idea were owned by some faceless company? Perhaps you’ve got a time saving/money saving product but you can’t even speak about it for fear of a lawsuit.
That is why most inventors end up selling their ideas and accepting 5% or less in royalties.
Did you know that the ~3% of the people that work for themselves come up with 70% of the new inventions? Corporations and government, with 97% of the workforce account for the other 30%. Of course, the number of people working for themselves is steadily falling so we must ask ourselves what that means with regards to progress.
What will happen when being in business for yourself is impossible? I’ll tell you, Corporate America, with its competition gone, will stop investing in innovation all together and only focus on profit. When this finally comes about, we’ll enter another Dark Age as it will be impossible to express an original thought or idea. What we will see is a new Feudalism except it will not be based on ownership of land but on ownership of Intellectual Property.
NickelthroweR
“That is why most inventors end up selling their ideas and accepting 5% or less in royalties.”
Exactly, because even if, IF, you’re able to bring an invention to market on your own, not only will you be facing ongoing b.s. from bigger competitors, but smaller ones that steal the idea and manufacture it outside the US for resale here – and good luck to any small business that thinks it has pockets deep enough to stop that in court!
It’s simply the way of the world today. And it sucks. It kills a lot of what would otherwise be
value-added innovation.
They over estimate the demand for their product/service, and do not have the capital to stay afloat yeilding a very quick and high percentage of first year failures. Rinse, lather, and repeat.
If that doesn’t sink it, dreamers think that if they like billboards – thats where they will (over)spend their “marketing dollars”. Lately most just say ‘fuck it, I’ll use social media’ and to their credit – its cheaper and easier to target the right audience….but old habits die hard.
These days, horseshit demographics are playing out in a huge way – as startups see established businesses as ‘proof’ there’s money to made, big money, and jump in – weakening everyone in the arena.
The established business is now fending off attacks promulgated by cheap money and same-store sales comparisons resulting in every single fucking ‘rock’ being flipped over looking for an opportunity of what are euphemistically labeled, ‘incremental sales’.
But, demographics are the killer, make no mistake.
I could right a novel on this one.
It is fucking hard to run a business. Especially from the ground up. My brother inherited the family business and has done very well. This is not always the case. Many times the next generation runs the business into the ground. Right now it even looks like my brother’s son is going to be able to keep things going.
Me, my dad died when I was 20. And I foolishly said I wanted nothing to do with the family business. Why? Because that what 20 year old dummies do. So I started my own business from the ground up and have made every mistake known to mankind along the way.
First, I had a business partner. Mistake #1. If you need a partner you are not ready to start a business. Having a business partner is like having another wife/ marriage and the divorce is UGLY.
Get ready to work your ASS OFF every day. You are on even when you don’t feel like it. There are no days off. That doesn’t mean you never go away or get away, but your finger has to be on the pulse of the company ALL THE TIME. Or you will watch money you worked hard to acquire disappear. ALMOST every small business person I know has suffered through an embezzlement of some kind. For me it was payroll tax money. It pretty much cost me the partnership and everything I own.
When you are running 80-100k a week in payroll and someone is steeling your payroll tax money seven figures adds up in a hurry. Someone is in jail today, but that doesn’t get the money back or pay the tax bill. What does it all come done to?
Three things!! Infrastructure. Infrastructure. Infrastructure.
I am great at building. Everyone customer want us to do their next job. I SUCK AT ACCOUNTING AND BOOKKEEPING. You have to find people to fill in the gaps. And you MUST keep your eye on the ball at all times. You have to know what everyone is doing. I hate accounting, but I know haw to read a balance sheet.
Mentor. FIND ONE and then become one. Your mentor will be with you as long as you run your company. He will keep you accountable and out of trouble. And then find someone to mentor. You must give back. I found my mentor after I lost seven figures to embezzlement etc…
Know your niche. I went from over 18,000,000.00 per year down to 5-7 mil per year. It is much easier to manage and have the proper infrastructure at 5-7. At 18 mil I was in no mans land. I either needed to expand to triple that or??? The infrastructure to run 18 mil is almost the same as at 40-50 mil. The overhead was killing me.
I now have way fewer employees, much lower overhead and actually make more money. Bigger is not always better. At least in my case.
The four principles of business that my mentor taught me and that everything builds on are:
1) Family First, Business First
2) Always Supportive, Slightly Detached, Always, always always ABSOLUTELY FUCKING EQUAL
3) The truth the right person at precisely the right time
4) Never expect the company to do for you what you cannot do for yourself
Again, a book could be written on each of those principles, but I will stop typing and get back to work
Also, you must work your triangle. Mind/Body/Spirit.
What the hell am I reading here?
Look at a chart of small business failures over the last 30 years, and compare the last 8 with the prior years.
You are telling me all of these guys who were in small business “forgot” what they were doing somehow? What? What happened? They got bumped on the head, or amnesia?
No, you are looking at a chart of businesses crushed by external forces.
In 2008, 4th quarter, our business income fell 80%
In 2009, First, & Second quarter business fell by 100%. Yes 100%, the phones literally didn’t ring for months, and when business came back, the “new normal” was 20% of the old levels. 25 people were fired and to this day business never recovered, we are a one man shop now, doing 5% of the business we did in 2007.
No realistic business plan could ever get you ready for those kinds of drops.
The SO lost his job at a small IT company because the owner was far more concerned about having an impressive office space in a costly area than the fact that they lost their #1 client, then #2, etc.
Lack of capital. Since small biz employs the greatest number of workers, if the Fed really was sincere in their efforts to improve the economy, small biz is where the helicopter drop should focus.
Other than angel investors about the only resource for small biz is the SBA. I’ve been through the process and can tell you it’s a long, dark road to a successful end, and you’ll sign your business and your life away in the process. Not good to be under the gov’s microscope. When I was through signing the papers, I felt like I had endured a colonoscopy.
@Sightseer: I feel your pain. I didn’t have 25 employees in my current biz, but the % revenue drop is comparable. Just scraping by.
I wonder how many millions have experienced the same.
Westcoaster got the correct answer.
Most failures of small business are due to being under capitalized. Period!
@NickelThrower: With all the outsourcing to India / China there will be no innovation. There are no employees – just Turd World contractors – these people don’t know your business, or have any reason to think about how to improve it. This will surely stifle innovation.
i was in the game for 35 years, yet the writing was on the wall. no debt. mirco business, it never was my first desire, it did pay for the farming. yet at a point the realization you are being told by the state they were doing you a favor by allowing you to work. the reeducation camp for a fee finally was the last straw. even a million dollars in insurance seemed inadequate though never did a legal issue arise. i quit in 2008, the under the table guys and the bigger outfits had one less to compete with. i sleep very well at night, yet my experience was lost to those who may have benefited from it. all risk up front, long before income was created, construction just stopped, like the late 70’s. the above comments hit the nail on the head, lots of reasons why business’s either fail or simply stop. the liberals just could not grasp why we no longer were there to please their needs. conservatives rarely needed an electrician,
Mostly because the people going into business are morons. Around here in the last few years I’ve seen stores who specialize in Bundt Cakes, high dollar imported Italian pottery and now high end ice cream come and go. They may have made it in a booming economy but not now.
Dollar stores and check cashing places are going out of business right now so you better have a product that is in high demand like drugs or alcohol.
Lots of folks have mucj of the story, as pieced together above.
1) small business requires a huge breadth and depth of skills. Most people do not have that. It is too expensive to hire enough folks to cover the gaps.
The skills include hr, finance, accounting, sales, marketing, engineering, manufacturing, planning, etc. the small business person needs a vast range of these, plus an intimate knowledge of govt regs.
2) govt regs. NUFf said.
3) failure to understand cashflow and manage it
4) insufficient capital
5) no or insufficient people management skills
6) inability to work the long hours required
7) starting a business with no barrier to entry, which allows competitors foreign and domestic to swoop in
8) bad debts. Do not underestimate the impact of even one dead beat customer.
9) employees. No one in their right mind would want one.
There are many more reasons, as mentioned above.
Number 1 above is the biggest reason small businesses fail. The rest are generally subsets of that, really. It is damn hard to run a small business, and the skills required are many, are hard to get, and any holes in the skill/knowledge/experience base will result in bad things happening.
Nice thread.
Kokoda – lack of capital is a big reason. But in my experience it is the failure to manage cashflow that most often kills oherwise viable businesses.
Location,Location Location. Also it helps if you have a society of people with jobs and money to spend.
i maybe the only one here who never planned to be self employed, arguement with boss after 10c raise which in turn i was making less, so i ease back to 37 hours. he did not approve and said i would be begging for my old job. i was motivated, though most unprepared for the venture. made enough in four years to sell out and buy a farm, we all know the returns on that investment. going like hardscapple for awhile till it went solo, so i had to return to all that i knew and some people once they are their own boss working for others is not quite the same.
Greetings,
@Fear & Loathing
After you are self employed for a while, corporate America will not hire you back. I’ve had numerous opportunities to talk to HR management from some very large corporations and they told me that self employment was a “red flag” and that resumes that had self employment on them or as the most recent of work experiences were never considered. Can you blame them?
Once you jump on the self employment train, it is very hard to go back to work for someone else. I’ve never been able to do it. No one in a million years would ever consider hiring me. Case in point:
The disaster that was 2008 shut my business down. I thought I could, perhaps, find work with a small company that was looking for someone that could wear a lot of hats. Anyway, I got myself an interview with the owner of a small media company and about midway through the interview he stops, looks at me and say, “I can’t hire you.” I asked him why that was so and he told me, “If I hired you then I’d be working for you two weeks from now.”
I thought about that for a moment and came to the conclusion that he was right. His first question of “where do you see yourself in five years?” was answered with, “right where you are sitting now but it ain’t gonna take five years”. Worse still, in the short time that we spoke, I had already planned out the next three months to include reviews and pay raises. I had told him that I could easily run his office (which was true) and that I would need him to focus on the sales staff and sales since I planned to increase throughput and would need a lot more work so I could keep myself busy.
Needless to say, people do not expect that at a job interview. They expect you to crawl in and be meek and humble. The last person in the world that they want around is someone that has experience in business and knows how the game is played.
Nickel – your interview skills suck.
Lots of good stuff here. My two cents. I’m only tslking 2008 till present. Most of the failure I’ve seen revolves around two things. First and most critical was understanding the nature of subprime, and the lack of liquidity grinding things to a halt. A lot of people perceived this as a normal short term dip, and treated it as such. Many people didn’t mind supporting their business for a while, figuring if they held on while weaker players
Llpoh- People like Nickle are an owners wet dream but a managers worse nightmare. Many managers I’ve come across are more interested in self perseverance than what is best for the business. I’ve hated a majority of my managers in the past just because they do realize they are expendable and will do anything to cut down their employees. Thank goodness I don’t have to put up with that crap anymore.
Downsized, they would be well positioned to capitalize on the uptick. Fatal mistake for many. Realizing that this would be a minimum of five years, I set out to scrutinize, renegotiate, or cut out every recurrent expense. Get lean, and get there fast. Most people didn’t want to do that. It’s painful to mothball operations, teams of skilled and trusted people, and quite a hostile activity to renegotiate loans, contracts, leases, mortgages.
In the beginning, all people heard was I wanted to give them less money, within a couple of years, people were grateful that I was willing to give them money, and capable of paying bills on time. Friends of mine who didn’t downsize quickly, are now walking dead. They are running out of resources, credit is maxed, and the killer, lots of expensive equipment is running out of useful life. Checkmate
Steph – you are correct.
My point is that in an interview the goal is to get a job offer. Nickel obviously either failed to understand that or did not want the job. His answers and attitude meant he was never getting that job.
@Llpoh
No, I’m used to be hired for projects often as the project manager. I can’t turn that off just because I’m in an interview. You are wrong in that I did not want the work but I’m not going to sugarcoat what I want. I’d rather tell someone right up front what it is I plan to do. It isn’t that hard to say that I’m going to do A, B & C and do so by this date and when I do, I expect D, E & F.
I ran into this guy three years later on a project I was working on and I learned that he went out of business two years after our interview. The very things I told him I was going to do never happened because he hired weak timid passive people that were just there to punch a clock.
Hire a bunch of non aggressive yes men and watch your business collapse. Owners do not live in gilded cages and need someone to challenge and motivate them. I’m lucky in that I have a business partner that challenges me to no end. I’d like to think I push him even harder because, after all, you don’t get to do Katy Perry’s world tour or put a bunch of Platinum Albums on your wall because OK is good enough. Not in this business.
Llpoh- I really wouldn’t care whether someone was perfect in an interview. That’s a shallow assessment of an employee’s potential. I’d be more interested in what they could do for my company rather than if they were agreeable. Agreeable people kill businesses all the time.
Nickel – I am glad you are doing well.
But my point stands. The goal is to get the offer. Then you get to decide whether to take it. You did not read the particular situation well, or you did not care if you got the job, if it was not on your terms, which is fine.
I have been interviewed many many times. Not recently, though. But at the end of my working for people career I was getting offers near enough 100% of the time. It is possible to convey the same things in a way that is not threatening : ie. something like ” my goal is to be able to assume enough responsibility that you will be able to focus on those things you deem most important for growing the business” etc.
If you indeed told the guy “I need you to do such and such” then I would expect no offer to be forthcoming. It is possible to be very aggressive and yet convey absolute support for the boss/owner.
Steph – no decent boss expects perfect. But there are few decent bosses. Interviewing is a game. It can be easily played, once a person learns the rules.
The interview is all about getting the offer. What you think, I think, or anyone else thinks is of no consequence with respect to what hiring managers should do, as the reality is most managers/business owners are incompetent.
The interviewee needs to work within that reality. Read the situation, play the game, get the offer, then decide if you will take it, negotiate it, etc.
Steph – agreeable people are critical to businesses. I love agreeable employees. They are truly important. You are mistaken. They are immensely valuable.
But they have to be in the right role, and their authority needs to be controlled. They must be required to pass decisions up the chain – “sorry, you will need to speak with Steph/llpoh about that”.
Assholes like me are a negative, generally, when dealing with low-level managers, salesmen, purchasers, etc. Agreeable people are what is needed in those situations.
Every type of employee you hire comes at a price in some way. The downside to having too many agreeable people is you end up with too many peter principle candidates in higher positions. It reminds me of the useful Nazi idiots that were “just following orders”. This why our economy is in the shitter is too many high level executives that were just following orders. Too many high level government drones just following orders.
Steph – the world is full of bad managers and workers. Therein lies opportunity for the competent. I do not disagree with your assessment – it is why I run a lean organization.
Llpoh- I can’t argue with running a lean organization. Quite frankly, and this took me a few years to realize to the extent that it’s true, is most jobs are fluff jobs with busy work. That’s why the largest job growth in the U.S. has been hospitality jobs. They just physically need someone in a position. They just have to show up. It is those agreeable people with no skills that are about to get chewed up and spat out as the job layoffs begin to accelerate. I foresaw this and exited stage left.
Llpoh, in my own business, I’m not allowed to deal with customer service on the phone. They literally take the phone away from me. I must not be as agreeable as I think i am.
Star – why, I am stunned to hear that. I mean, you are a truly mild and calm man. (Sarc off)
That is my point – that is why agreeable folks are needed. They handle the things that do not require tough love. And star and I save ourselves the angst.
One of my customers recently called me intransigent. Imagine that – me intransigent.