Independence: it’s been a goal of Americans for 225 years. And having just passed another Independence Day, it’s a good time to reflect on what this means in business.
Entrepreneurs are particularly independent. We throw off bosses like the colonists threw off the king. No matter how risky starting a business seems, to us it’s the route to “life, liberty, and the pursuit of happiness.”
While we started our companies to be independent, did we lose that freedom along the way? Have we allowed ourselves to become subjects of the petty demands of our businesses? If so, it’s time for you to come up with your own Declaration of Independence.
Here are some things to seek in your Declaration of Independence:
Independence from overly powerful customers. If you get most or all of your income from one or two major customers, they control your future, not you. They can dictate the amount of your income, the security of your business, indeed, the quality of your life. You don’t want to lose these customers, but make it a priority to expand your base.
Independence from overly powerful channels. Successful entrepreneurs start their businesses by concentrating on one channel to reach their potential customers. They may target one specific industry or sell exclusively through one distributor. However, as your business grows, it is vital to diversify, so that if something unexpected happens (such as when my distributor went into bankruptcy this year), you can still survive.
Independence from overly powerful vendors. Likewise, if you depend on only one or two sources for your critical supplies, then you’re at their mercy. Find other sources, and give them at least some of your business. Even if you’ve been using one source for years, ask from time to time for bids from other vendors. Stay flexible.
Independence from overly dependent employees. If your employees come to you for every little decision, it’s time to give them their independence and free yourself at the same time. Create a working environment that gives them responsibility and authority, making certain that employees are also given the training and support to handle such authority.
Independence from huge overhead. Few things are more enslaving than high fixed expenses. Be very careful about how fast you expand your business. Finance your growth as much as possible through revenues, rather than debt or investment. Rely on outsourcing or other methods to keep your costs flexible. Don’t grow too fast.
Independence from petty politics, office personality spats, and malicious gossip. You started your own business so that you could enjoy going to work every day. Why put up with an unpleasant atmosphere? Create ways to communicate so that everyone knows how and why decisions are being made. Don’t play favorites. Don’t gossip or disparage employees, and don’t allow others to do so either. Create — and demand — an atmosphere of fairness, openness, and respect.
Independence from bureaucracy. You’re not a Fortune 500 company. Don’t institute a lot of paperwork and policies as if you were a mega-corporation. You can’t free yourself from all red tape, but you don’t have to create a lot of your own.
Independence from continual insecurity. Being in business is never completely secure, but once past the startup years, you should be able to free yourself from constant worry. Build a base of continuing customers or product lines. Set aside a cash reserve. Diversify your personal assets so you have financial resources in addition to your business.
Independence to pursue your own vision. Starting your own business often results in criticism or concern from others. You have to learn how to listen and gain from them when appropriate, yet still feel confident to pursue your dream.
Independence from 80-hour work weeks. If you’ve given your whole life to your business, then you’ve completely lost your independence. Know when to close the door, turn off the phone, and go out and have a barbecue. Set yourself free!
Rhonda Abrams is the author of “Six-Week Start-Up” and “What Business Should I Start?”
