Romantic ideas of life in business can kill the Kiwi dream
One-person owned businesses fuelling the Kiwi dream are holding New Zealand’s economy back. Leading Kiwi business venturist calls for more scale through partnerships.
Stress, anxiety, divorce and monthly cash flow struggles are the lot of so many Kiwi small business owners, but it doesn't have to be that way if you can learn to give some of it away.
Business leader Craig Cotton, a former CEO at The Better Drinks Co, Country Manager of Independent Liquor and co-founder of OneHQ, believes the key to building a thriving small business economy is to have more business partnerships, and fewer one-person bands.
"Almost half of the small business start-ups in New Zealand fail because they try to do it alone. A large chunk of those that survive are holding on by their fingernails because us Kiwis have this thing about 'being your own boss'; to be 'independent' – but it's counterproductive.
"On your own, you're just buying a job, and you'll find that you're also your own worst boss. My advice is to find other like-minded people, team up with them and build a business together. It is better to have a smaller piece of something big than a big piece of something small."
Cotton says this doesn't mean surrendering your freedom.
"Building a team of like-minded people around you means more time for your family, greater financial independence, a sense of self-accomplishment and more fun in the long run. It's about sharing the work and the rewards.
"People in business together keep the passion alive. In my experience as an advisor, mentor and investor, at least 80 per cent of small businesses owners never realise their 'why' because it’s tough on your own.”
Cotton says he left corporate life to follow his ‘why’, but the reality is that working alone is harder, takes longer, and it will cost you more money and personal sacrifice than you planned and imagined.
"I sold my house. I lived out of my truck, slept on spare beds and at times couches. I lost a relationship and only came back to Auckland every other weekend to see my children – it was bloody hard, and I suffered to the point of being depressed.”
When Cotton failed and parked his first venture, the next one he didn’t do alone.
"Doing it together with other people is better. Bigger is also better because success needs scale. As Kiwis, we have this thing that failure is not an option. We dread failure, and we'd rather be miserable than fail. But it is better to fail fast and learn fast and fix fast than to hang on to a hopeless venture."
Cotton says business success requires three essential ingredients. It’s the three C’s he lives and breathes:
3. Capital; and
Don't do it alone.
“Partnering with others gives you scale automatically. That human capital makes all the difference. Ask for help. Get advisors. Collaborate. Find partners. Don't think of it has giving away what you have, but as growth,” he says.
Cotton says that most SMBs in New Zealand are financed through mortgages on the family home, which only adds to the dread of business failure.
"A good business concept, one that is pressure tested, researched and shared with others – preferably while you are still in your job – will find it easier to get proper business finance, even backers and investors.
“But giving up your income and launching out on your own on the back of a mortgage on your home is not smart – collaborate, test, scale and fail before you abandon your income,” he says.
Cotton says sales and customers will come if you have a business idea that meets their needs.
“Park your romantic beliefs about life in business and connect quickly with your customers. Ensure what they want is going to make you happy and that it delivers on your 'why'.
"Ignite your partners, your team and your suppliers with that passion – build those connections – and customers will be tripping over themselves to get in the door. People buy culture, they buy passion, and they buy your 'why'.”
Cotton says that while many business owners started because they thought they had a unique idea, the truth is that there are many good ideas, but most fail because it is the execution of a plan that matters, and that requires capability, capital and customers.
For more information: https://www.OneHQ.nz/