Dr Jeff Cornwall

I continue to be amazed at the trend toward more and more new business formation. Even as the economy picks up, we see experienced executives moving into the entrepreneurial ranks, as seen in this post by Anita Campbell at Small Business Trends. The biggest challenge these executives face is to understand that they are not forming a small, “big business”.
Most of these folks find that to survive in the entrepreneurial realm they must unlearn many things they know from their big business experiences, and more importantly develop many new habits. I had an entrepreneur in my MBA class last night who stressed what a challenge this can be. He began his career moving up the ranks of a large corporation. Then he caught the bug, and decided to strike out on his own.
One day, he needed some Post-it notes, and was ready to tell someone to get them for him. That’s how it worked in his old job, after all. But, wait! There was no one but he and his partner. So, he did what every entrepreneur does: he got in his car and drove down to Office Depot. He also found that he began to write notes on the back of used paper, rather than pull out a clean sheet of letter head as he did when in a big company. He started to stay in Microtels and fly Southwest, rather than stay in the best hotels and fly first class.
Another challenge is that some big business converts find that raising money can be relatively easy. This actually can be a mistake if it is too easy. Too much money is almost as bad as not enough. These new entrepreneurs find it easy to spend this “extra” money on overhead and “lifestyle” expenses. This can burden on a young business by creating too much fixed overhead, which will eventually catch-up with these entrepreneurs. The business cannot grow large enough, quickly enough to cover these fixed expenses. And when they do realize the problem they created, it is often already too late for their business to recover.
But many do make the transition and are now filling the ranks of this growing army.