If this were a standard business book, I would tell you all the smart things I did to achieve financial success, and maybe trot out a few mistakes to show some humility. Unfortunately, I’m no business genius and I’m not rich. My story has neither tidy conclusions nor a triumphant ending. So this book will be different.
I’d like to tell you what happened to my company in 2012, as we struggled to replicate profits earned in the previous year. We started strong, but then sales took a puzzling turn for the worse. The vast majority of our clients were delighted with our work, but a couple of them weren’t satisfied with reasonable efforts and cost us huge amounts of money. I presided over a very good crew, except for a couple of workers who gave me serious trouble. We made some money, then lost a whole lot more, then clawed most of it back. Meanwhile, my complicated family life couldn’t be ignored. This is real life. The triumph and tragedy of small business. The uncertainty and challenges of being the boss.
What do I mean by “boss”? It’s commonly understood to mean someone who’s in charge of others, but that could be a middle manager in a big corporation. Instead, I’m talking about bosses who both own and run their businesses—small companies with fewer than twenty employees. More than seven million American businesses, employing nearly thirty million people, are in this category. These bosses answer to nobody and are responsible for everybody. Their own money is at risk. Every problem goes straight to them, and they have to come up with the solution, figure out how to pay for it, and then implement it. The position guarantees long hours, hard work, and overwhelming stress.
Every day, these bosses wear multiple hats: managing employees, keeping track of the money, dealing with bureaucrats, negotiating with the landlord—the list goes on and on. Larger companies, with more resources, can hire individuals or create whole departments to do these jobs, but a small company can’t generate enough cash to cover that expense. So these tasks land in the boss’s lap. No matter that the boss may have little or no training, and no desire to spend time on them. Done wrong, the company fails, either slowly or quickly. Done right, the boss gets to do them again. A sudden crisis—a cash shortage, or an equipment breakdown, or a personnel crisis—requires even greater effort. Even if the business survives, there is never a guarantee of easy sailing ahead. The situation goes back only to the routine level of toil and stress.
That’s not to say that being the boss is relentlessly terrible. Inventing the processes that enable successful operations is like solving an intricate puzzle. It’s highly satisfying to see your business running well, delivering the product or service that inspired its creation. There is no thrill like receiving payment from a satisfied client. Most workers try hard to do a good job, and most people are good to work with. Consistently meeting a payroll is a real accomplishment. A business can provide for the security and growth of both boss and employees. It might be able to expand and enter markets all over the world. It might even make a healthy profit. The boss can take delight in each small victory and, over the course of a career, be proud of all that has been accomplished, whether it added up to fabulous wealth or not.
Every business has a dual nature: the real-life version with its countless imperfections, and the ideal theoretical business the boss imagined when he started, where everything works as it should and money is made. Good money. Steady money. Maybe even outrageous money.
Money is the unavoidable scorecard. Any business can be great at making a product, great with its employees, great with the customers, but if it doesn’t make profits, it isn’t considered a success.
While recounting the events of 2012, I’ll concentrate on four subjects: Sales focuses on how my very small company interacts with a wide variety of clients, from enormous institutions to individuals. Operations is about how my company makes its products, how I manage the people I employ, and my attempts to move our workshop from a nineteenth-century model to the twenty-first-century version. This transition is an incredibly complex problem and the solutions we find (or fail to find) have implications for the whole economy. The third theme, Money, describes how cash flow, or lack thereof, affects my decision making. And finally, I’ll describe how I exercise my Powers as boss, balancing those demands with my duties as a father and husband. The details of this story are particular to my company and my life. The lessons, I hope, are useful to everyone.