I wish I could take credit for the term “entrepreneurial maturity” but I can’t. Credit goes to Jason Jones, a licensed public accountant who offers CFO services to businesses. In writing about his challenges in working with businesses, Jason says:
(T)he challenge I immediately discovered was in finding small business clients who had the entrepreneurial maturity to realize what they needed to know financially in order for their business to thrive and survive, and who had a strong awareness of their own conscious incompetence accordingly.
All too often, I got referrals from professionals and inquiries from prospective clients, only to engage in power struggles with the client in formulating business/financial strategies, which were often rooted in a combination of unconscious incompetence (they don’t know that they don’t know) and “Founder’s Syndrome” (since they’re the founder/owner, they know everything about the company they need to – they often hire “yes men” to help reinforce their flawed way of thinking). But I digress.
In other words, a business owner who has entrepreneurial maturity knows what they don’t know.
The challenges Jason writes about in his blog post are the same challenges I have faced in working with some small businesses. Here’s an example of a real conversation that took place with a business owner who’s business was always struggling with cash flow in its first couple of years of existence. The owner had been complaining that his advisers weren’t asking the right questions, so I was trying to be proactive:
Me: “Let’s look at where the money is coming from and where it’s going and start setting up strategies.”
Business owner: “Well, a growing business consumes resources. No business in its first few years has a big profit margin. That’s just the way it is.”
Period. Conversation over.
No review of finances was done.
That’s an example of an owner who hasn’t matured enough to realize that he was talking to a knowledgeable professional who was trying to help him. Instead, the owner made a declaration that indicated he knew all about it and nothing further needed said. Yet, this same business owner still complains that the professionals around him aren’t giving good advice.
This scenario happens far more than it should.
As a professional, it’s hard to deal with.
I like working with startups, especially the people who started like me — on the side, from scratch — and have grown. But logically, these are the folks who have the least entrepreneurial maturity.
Sometimes I catch myself lacking in entrepreneurial maturity too.
I’m not sure what the solution is.
Time. Experience. A realistic view of the struggles of running a business.
And an acknowledgment that as business owners, there are things we won’t know.
Image courtesy of Stuart Miles / freedigitalphotos.net