Introduction

In his insightful book, "The Book of Survival," Anthony Greenback highlights a fundamental truth about overcoming impossible situations: it's not about possessing extraordinary abilities but knowing what to do. Similarly, in the world of business, success is not solely about exceptional talents or industry trends. It's about understanding the critical distinction between being an expert in your trade and being an adept business owner.

The Harsh Reality of Business Survival

Statistics about business survival rates in the first five years paint a grim picture. Estimates vary, with some suggesting that as many as 90% of businesses fail, but it's rare to see this statistic quoted as anything less than 50%. This means that, at best, you have a 50/50 chance of keeping your business afloat after five years.

However, the bleak outlook doesn't stop there. These statistics only account for businesses that completely shut down, disregarding those that stagnate at low levels or become a source of misery for their owners. The question that arises is why so many small businesses seem to plateau at mediocre levels.

The Tale of Two Plumbers

Consider two scenarios at opposite ends of the spectrum. On one side, there's Pete, the plumber, who tirelessly works long hours and weekends but struggles to make ends meet. On the other side, there's Joe, who runs a plumbing business with multiple employees and enjoys substantial profits. These examples illustrate the common phenomenon of small businesses barely generating enough profit for their owners to make a modest living.

The Brutal Truth: Self-Created Jobs

Many business owners find themselves trapped in a self-created prison. Despite their best efforts to grow, they often end up frustrated, accepting that their business is little more than a low-paying job. In some cases, it becomes clear that these owners might be better off working for someone else in their industry, enjoying fewer hours, less stress, more benefits, and more vacation time. However, a fortunate few seem to have it all: reasonable hours, steady cash flow, and continuous growth.

Blaming the Industry

When struggling, some business owners point fingers at their industry as the root of their problems. While some industries do decline over time (think bookstores or video rental stores), the blame game is often more about excuses than reality. Common industry complaints include fierce competition, low profit margins, online competition, and the ineffectiveness of advertising. Yet, other businesses in the same industry thrive. So, what sets them apart?

The Entrepreneurial Seizure

Many small business owners fall into the trap Michael Gerber describes in his book "The E-Myth." They start as technicians (plumbers, hairdressers, dentists) and believe their technical expertise qualifies them to run a business. This transition from working for someone else to becoming their own boss is a significant mistake. Being proficient in a trade doesn't automatically translate to success in running a business.

The Key Distinction: Business Skills Matter

The essential lesson here is that proficiency in a specific skill doesn't equate to competence in the business aspect of your trade. This misunderstanding is a primary reason for the failure of many small businesses. A business owner may excel in their craft but struggle due to a lack of business acumen.

Conclusion

Starting and running your own business can be a path to financial freedom and personal fulfillment. However, it requires mastering the vital distinction between technical expertise and business acumen. To succeed, one must become proficient not only in their craft but also in the art of business. Only then can a business truly flourish and serve as a vehicle for achieving personal and financial goals. So, remember, in the business world, it's not just about what you do; it's about how you do it.