Small Business: Run by Dummies?

Captain Capitalism tells us “Most Small Business Owners are Dumb as Hell:”

Another reason for the spectacular failure of small businesses is their owners truly and honestly believe accounting is optional.  THat's the "hard stuff" and they literally have no idea how much they're making or losing.  All one has to do is watch Restaurant IMpossible where the host invariably asks the bloated sows about their "P&L" and they don't even know what that is.  Again, these are lazy, dumb people who started the business for "fun."  Not profit.  And since accounting isn't "fun" they don't do it.

I suppose that when we talk about being proponents of “small businesses” we’re really talking about businesses smaller than, say, Wal-Mart or GM.  Those are the kind that are tested by the market, employ more than a handful of people and don’t hold more than 50% of the market share.  These are useful for a dynamic society.  In contrast, the corporate behemoths can change the law to suit their needs.  The boutique businesses, as Cappy notes, tend to change the rules of business out of their own convenience.  

Promoting a maximum of economic flexibility is best but the law of averages still holds true.  We should be promoting small businesses, even if most of them are run half-assed by idiots.  The market should take care of those fairly quickly.

My girl tells me repeatedly to get out of the small-business business.  The firm is only as good as the guy who’s running it and, because of that, is subject to personality defects.

I worked with one man who was very intelligent but was also a bit of a loon.  His primary problem was ADD and a tendency towards hoarding.  The latter was mitigated by the fact that he owned a four-story warehouse, so all his junk got shoved to one corner or another.  His office was so strewn with stuff that to vandalize it one would have to clean it up first.

He helped me to understand that one way of managing ADD is what I call “taking the long way.”  Folks with unmanaged ADD are really slaves to their brains.  When their brains tell them that something is really interesting, they can’t let go.  When their brains tell them that something is boring, they can’t get started.  So, sometimes, to do things that must be done, they accomplish the tasks by taking a lot more steps than are necessary.  Instead of adding 2 plus 2 to get 4, they add 1 plus 1, plus 1 plus 1.  Same result, more steps, but each of those steps is more mentally manageable than the easy way.

Fine for him, if that gets the job done.  But being in charge of his own business, everyone had to go through the exact same steps as he would or he would throw a fit.  

This kind of system attracts the wrong kind of employees, and this problem is the real failure of most functioning small businesses.  It becomes clear that one’s job isn’t performing the tasks necessary; it’s satisfying the boss, whether it’s practical or not.  As time goes on, no employee wants to make a decision unless they are sure that’s what the boss would decide, and every decision gets deferred to the boss.  If the business is at all successful, eventually the number of decisions become too great for one CEO and he either has to restructure or come up with some semi-functional but non-productive ways of handling the burden.