Being an entrepreneur is great. I know a little about it, as I have virtually never had a real job. When I was a child, I cut my teeth in business by mowing lawns and shoveling snow. I expected, as my ventures grew, I would take as much money as I wished, work when I want — basically live “The Life of Riley.”
Reality was a bit different; all our customers were my bosses, and it seemed like I always had to work. The money? It felt like a lifetime (because it was) before any accumulated. That said, I would not trade it for anything. Indeed, like many boomer entrepreneurs, I fear retirement.
An entrepreneur starts or creates an enterprise. To create is to make something from nothing. However, I posit my friend who inherited a $12 million company from his father/grandfather and ran it up to $95 million is an entrepreneur. Same with the one who inherited a $15 million company and grew it to $1.5 billion. They created major enterprises from humble ones. I like to think of entrepreneurs as analogous to the pioneers who opened the West, or the founders of our country, or the 49ers (the prospectors, not the footballers). It is certainly not for the faint of heart.
I do think it was easier in the “good old days.” Everything was simpler back then. “Buy low, sell high,” “Don’t control costs, just increase income.” Wouldn’t it be great if that really was all there is to achieving business success? There are kernels of knowledge in those phrases, though. Those concepts have certainly served me well.
Statistics on the survival of startups are dismal. Ninety percent of business startups fail. Of the 10 percent that survive, 90 percent of those never achieve scale, defined here as revenue over $1 million annually. Fully 99 percent do not make it big.
There is a new methodology being taught to students of entrepreneurial business now. Instead of starting up a company, buy one that exists. It is called ETA, Entrepreneurship Through Acquisition. Scot Lowry from the Case Western Reserve Weatherhead School of Business took over from the eponymous Richard Osborn, aka The Gorilla, who started Promise Partners as an affiliate of CWRU to promulgate the ETA theme.
The boomer demographic owns $80 trillion of wealth. About $10 trillion of that is in the value of their private companies. These businesses will be transitioning through the next 10 to 20 years. All entrepreneurs will leave their company eventually — some vertically, some horizontally. The boomers cannot take it with them. I know, I am one. Often there is not a natural successor in place, which leads to the ETA concept.
Promise Partners is an accelerator, not an incubator, as these companies already exist. Cleveland is full of them. Promise Partners has facilitated the ownership transition of 90 companies for 66 owners over the last 30 years. I view this group as matchmaking on steroids.
We are very fortunate in Cleveland to have an infrastructure in place to assist entrepreneurs, whether they take the startup or ETA route. I sure wish I had advisers like that 50 years ago when I started in business. Better late than never.
As a lifelong entrepreneur, Steve has started and operated numerous companies in the specialty building trades and building products industries.
