Surviving a start-up with sleeves rolled up - small business

Nation's Business, April, 1988 by Ripley Hotch

Have you ever wondered, reading these pages, if anyone here really understands what the small-business person goes through? If so, it may hearten you to learn that more than a few of us are, in fact, small-business people ourselves.

Most of us who write about business admire the person who tries to build a business-and many of us are tempted to give it a try. We're not impartial about business here, and it is valuable to know what business people go through.

Going through a start-up gives you 10 times more understanding in a 10th the time than regarding the process from outside. Our job is to understand and interpret, not merely report from the sidelines. Understanding means feeling the heartbeat of business on your own pulse. Some such thinking as this was behind my own decision to take the plunge, and I must say that writing about something and doing it really are two different things.

My partner and I had long planned to open a bed-and-breakfast inn, and bad found what looked like the ideal property at a decent price within a two-hour commute of Washington. It was Boydville, a 175-year-old stone mansion in Martinsburg, W.Va., which had escaped too much modernization,

Our plan was to rent out seven of its bedrooms. I would keep working at Nation's Business, and eventually the business might bring a good sale price or at least provide extra income or an investment for retirement.

I can now say, from the heart, that it is no wonder that most businesses fail; it seems to me a wonder that any of them succeed.

The work involved is enormous: complying with local, state and federal regulations; setting up legal structure; establishing unemployment, Social Security and workers' compensation accounts for employees; getting employer identification numbers; tax reporting at city, county, state and federal levels; applying for business licenses, with the inspections required; arranging for banks, accountants, lawyers, consultants; arranging financing; rearranging financing; finding liability insurance; setting up accounts for vendors, utilities and services; setting up your bookkeeping system.

And there's the physical Labor of getting your facility in shape (or getting someone to do it); learning how to run your operation; marketing your product or service; hiring and handling personnel; and learning to deal with the seemingly endless stream of irritations, breakdowns, missed deliveries, complaints, requests for donations and political encroachments (what new tax will be laid on your business this year?). And that's just the start-up.

After all that, you must greet the public with a smile and a great product or service at a great price-and keep doing it day after day, year after year.

Big businesses have staffs to help with such details. Small-business people have to do it all themselves. If small-business people are not the heroes of this economy, nobody is.

But there are unexpectedly pleasant surprises, as well as some unpleasant.

I, for one, like doing business in a small town. Other merchants are generally pleased to have you ("I bet you'll bring a lot of those Washington folks out here to see us") and will take your word that you'll honor a charge account.

On the other hand, strange rumors abound. One night we got a call from a friend and fellow business person: "Did you guys buy 10 acres off the Inwood exit of 1-81? I heard you were going to build a shopping center." It would concern this friend, who owned a shop at the nearby factory-outlet center.

But that same friend has taken a solicitous interest in our venture. And he has taught us that you cannot be a business person in isolation from your community or state.

For example, in pressing toward our opening day, we concentrated so much on the requirements of the health department that we forgot about the fire department. It turns out that in West Virginia the fire code does not exempt historic buildings. We were going to have to put in a sprinkler system, said the local fire chief-no matter that the exterior walls of the house were 21/2 feet of stone and the interior walls were plaster over brick. The proposed work would have destroyed the historic value of the mansion-the major reason our customers were coming. What to do?

Our friend informed us about legislation that would offer some alternatives to the strict code-told us what legislators to talk to, and urged us to organize other innkeepers to bring about the changes. Our insurance agent volunteered to testify in the state capitol. And because the state is small, we found tremendous help from the staffs of the state commerce department and its department of culture and history.

The end result? We have, in a sense, become trailblazers for the adaptation of the state fire code for historic buildings.

We say it often in these pages, but once you live it, you really understand how important it is to get involved in polities and the formation of policy in your town or state. Small business can't exist in a vacuum.