More To the Story

Statistics show that 20% of businesses fail within the first year, 50% fail within the first five years, and (depending on the source) 65%-80% fail within the first ten years. You've probably heard some iteration of these numbers. The broad consensus upon seeing this data is to conclude that business ownership is simply an uber-risky endeavor. That theory makes sense, and the numbers would seem to point in that direction, but I don't think that tells the full story.

Many years ago, I remember watching someone close to me. This person was brilliant at their craft. "Gifted" is a word I would use to describe them. However, I also witnessed something else. When this person decided to start businesses, they would fail over and over and over and over. I couldn't wrap my head around it. How could this person be so good at what they do, but fail so miserably in business? Ah, I know what it is! Businesses are just really, really risky. As the years passed, I gained a different understanding of the truth. This person, while extraordinarily gifted at their craft, was terrible at the various business disciplines necessary to succeed in the marketplace.

Over time, I've developed a new theory. While businesses are far from risk-free, I believe the data on business failures has more to do with the competency of business owners' running-a-business skills than anything. Gifted at their craft, yes, but somewhere between bad and terrible at running a business is the norm.

If I look back on my own experience as a business owner, I can think of a half-dozen times when I almost lost my businesses. These situations weren't because running a business is risky, but rather, because I made poor decisions that almost caught up with me. It was ME, I was the problem.

Northern Vessel is a great example. Before I got involved, TJ failed multiple times, including the complete shutdown of the company. It wasn't because running a coffee company is inherently risky, but because TJ lacked the knowledge and experience to make wise business decisions. While Northern Vessel has grown into something far more prominent and successful than we ever could have imagined, we almost lost the company a few times in the past three years. We made a series of poor decisions that nearly wrecked the ship. That wasn't because running a coffee company is risky, but because we screwed up and it almost caught up with us.

We don't know what we don't know, and that's okay. However, it doesn't give us an excuse to throw our hands up in frustration and proclaim, "Running a business is just too risky." We need accountability, ownership, humility, and a willingness to learn. Being a master of our craft isn't enough. Without developing a better understanding of how to run a business, we'll inevitably waste our giftedness and drive our sanity into the ground.

To be continued.....

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