As a business owner, a channel partner must choose what kind of business he wants to own, said Larry Kesslin, president of 4-profit, an advisory firm to the IT channel.
Speaking to attendees of the Fall 2008 Channel Partners Conference & Expo this week in Boston, Kesslin said a business owner has a just a few options: grow his business, groom it for sell or maintain it to support his/her lifestyle.
“You can’t be all three,” he cautioned, noting the business decisions required in pursuit of each path usually are contradictory. For example, a growth business owner would reinvest profits in expanding the company, while a lifestyle business owner would take that money out of the business in support of his/her lifestyle (e.g. luxury homes and vacations or greater freedom to pursue non-work interests, hobbies).
Similarly, a growth business has systems and processes while a lifestyle business has little infrastructure, he said.
The type of work talent that’s attracted to each of these models also varies. A go-getter salesperson might be lured into a growth company, but will find no career trajectory in a lifestyle-oriented business.
In his new book, “Mastering a Culture of Accountability,” Kesslin and partner Chris Winter review these paths. Exit, they write, is the chosen course for the owner who seeks to sell in a short time frame or an owner who is burned out. “These owners are better served exiting sooner rather that later,” the authors write. Otherwise, over time, key employees and customers will leave.
Determining your direction is important. “If you have been in business for many years, you can get in a rut. You need to get in touch with the original reason you started your business.”
In addition, he cautioned partners not to feel pressured to choose a path counter to their own desires. “Just because your vendors want you to grow doesn’t mean you should,” he said by way of example.
In his presentation, “The Accidental Entrepreneur,” Kesslin noted that most channel partners got into business for themselves because of either an ability to sell and market or an affinity for technology. “Running a business,” he said, “is a different discipline.”
He said most businesses fail because they don’t know what they don’t know. Sixty percent of all knowledge is what we don’t know we don’t know, he added. The other components in the “circle of knowledge” are things we know we know and things we know we don’t know.