Operating a Business in the Small Business Space

By Wavell Cowan

Dr. Cowan’s business experiences began as a research and development consultant in the pulp, paper and allied industries. His Independent research activities led to patents allowing commercialization of new process equipment by means of development and royalty contracts with major industry suppliers. They further allowed the development of a line of new technology instruments manufactured and sold to pulp and paper mills world-wide by a new company, Pulmac Instruments International, founded by Dr. Cowan.
After relocating his business from Montreal to Vermont, Dr. Cowan became involved with a small business education initiative. This resulted in the founding of the Vermont Small Business Network and a 15 year project focused on the question as to what specific business training would have been valuable to his own business development and therefore of general value to all small businesses. This was based on the recognition that his own business practices developed through the “school of hard knocks” were quite different from those of his large company clients and customers, and markedly different from the teachings of conventional business courses and the text books they employ.
Operating a Business in the Small Business Space essentially tells the story of this intellectual voyage of self discovery – seeing small business as a unique species of business operating in a different “space” and properly marching to a different tune – a new form of business training.

• Language: English
• Publisher: Wavell Cowan
• Release date: Sep 10, 2015
• ISBN: 9781310557453

Wavell Cowan

Attended McGill University in Montreal, graduating with a degree in mechanical engineering. Attended graduate school at the Institute of paper Chemistry, in Appleton, Wisconsin, graduating with a PhD in physics and chemical engineering. Worked (1959-63) as Technical Director of a Scottish papermill in Glasgow. Began a career based in Montreal (1964) as an independent scientist, founding a number of development companies, publishing his scientific work regularly over a professional lifetime, securing half a dozen patents supporting development work under royalty agreements, as well as for a line of new technology test instruments, manufactured, marketed and sold to pulp and papermills world-wide by his own company, Pulmac Instrument International. In 1978 he moved his business to Vermont, where he currently resides. His retirement years have included writing and publishing a book, “Science in the Pulp and Paper Mill”, serving 6 years on a local school board, 8 years as pro bono consultant and board member for the Vermont Philharmonic, and co-founder of an on-line small business training center.

Book preview

Operating a Business

in the

Small Business Space

Wavell F. Cowan, BMechEng, MS, PhD

Copyright 2015 Wavell Cowan

Smashwords Edition

ISBN number

9781310557453

License Notes

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This book is dedicated to those talented people who start their own businesses. It owes its existence to the many interactive discussions made possible over a fifteen- year period by the activities of the Vermont Small Business Network. The members of this pioneering, self-help organization have contributed to and validated the ideas presented in this book.

The Small Business Space

CHAPTER 1

Introduction

Ideas developed in this book explain why current business education has proved so irrelevant to the success or failure of those who start small businesses. I further believe that these ideas represent the basis from which a new form of small business education can be developed, which would greatly reduce the frequency of failure of those enterprising people who start their own businesses.

* * * * *

Statistics of business failures suggest that only one or perhaps two of every five start-up businesses in the United States manage to survive their early years. Explanations for this high failure rate published by banks and accounting firms boil down to much the same thing - incompetence. For instance, a 1980s BankAmerica publication lists managerial incompetence or inexperience as underlying 90% of all business failures, going on to list poor record keeping, reckless money management, lack of formal planning, poor use of management time, insufficient marketing talent, etc., as specific instances. While such characterizations are undoubtedly valid, might not they also apply to businesses that have succeeded?

In thirty odd years as an owner/operator of a small business I have far more frequently encountered established businesses that astonish me by their ineptitude and sloppiness than by the high quality with which their operations are managed. Thus my experience in the business world leads me to believe that a high level of management competence is the exception rather than the rule and thus not an essential attribute for successfully surviving a business start-up. By directing attention to technical aspects of business operation are we missing something of far greater significance? I believe we are.

The truth of the matter is that overwhelmingly, those who choose to start their own businesses come to the experience woefully unprepared. In this sense, all are equally incompetent. Those who survive the minimum necessary learning curve are merely the more fortunate ones. The occurrence of unforeseeable, highly favorable and timely events, rather than sound management and good planning, most frequently distinguish the environment of those who survive from those who do not.

In my experience, people who choose to start their own businesses possess some exceptional skills and abilities and are certainly not lacking in intelligence. The question that screams to be answered, then, is why so many basically competent people fail to appreciate until too late how unprepared they are to undertake the task of starting a business. The answer to this question surely must be sought in the general perceptions of society about business, and the impact of general business education on this perception. The fact, for instance, that a plethora of educational books and courses purporting to explain how to successfully start a business coexist with a seventy percent failure rate cannot be without significance. Why does current business education appear to be so irrelevant?

I became interested in this question many years ago. In looking back over my own business career, I recognized that it really was unforeseen and certainly unplanned events and happenings that carried my business through its early years. Like so many others before and after, I too started my business in glorious and innocent ignorance of just what starting a business was all about. Thirty years later, however, I was very confident that nothing but extremely improbable and unlikely events could cause my business to fail. In the course of those years, therefore, I had managed to transform a business which required an exceptional quantum of fortunate circumstance in order to survive, into a business which would have require an inordinate amount of bad luck to fail. To account for this transformation, a logical presumption is that I must have learned some important lessons over this period.

Some twenty years ago I began a serious examination of just what it was that I had learned. This was no easy task. So much of what we call experience arrives in such an amorphous and inchoate manner that it is only with great effort that related pieces can be merged and overall patterns made articulate. I doubt whether I would have achieved useful results had I not been able to draw upon my training and practical experience as a research scientist. I confronted my business experiences with information derived from a great deal of reading not only of business texts but of the current business literature as found on the pages of such publications as the Wall Street Journal, Forbes Magazine, the Harvard Business Review, and a host of publications prompted by the arrival of entrepreneurship as a buzz word. I experimented by teaching business courses. I was involved in the establishment of the Vermont Small Business Network - a group consisting largely of people who had started their own small businesses. This network provided a forum for interactive discussion that offered me a rich source of anecdotal and practical insights.

Gradually, with the help of these resources, I found my own experiences beginning to coalesce into recognizable patterns, and equally gradually I have found the words to articulate the content of those patterns. The exercise was enormously valuable to me, since it brought into clear focus important business practices that previously had been more instinctive than recognized. This made possible a calculated extension of such practices (to the great benefit of my business) well beyond anything that could have been conceived by my prior awareness.

I cannot say that my analysis is complete. Each passing year brings new insights, new lines of thought. I do believe, however, that what will come in the future will augment rather than overturn the ideas which I have thus far managed to bring to focus. I believe that these ideas explain why current business education has proved so irrelevant to the success or failure of those who start businesses. And I further believe that these ideas represent the basis from which a new form of business education can be developed, which when in place will greatly reduce the frequency of failure of those enterprising people who start their own businesses.

The Small Business Space

CHAPTER 2

The Concept of the Small Business Space

The small business space is the term I use to provide an overall label for the social, psychological, and philosophic environment into which a business is fitted. By this criterion, and contrary to established wisdom, large and small businesses really do occupy different spaces. This distinction turns out to be of the utmost importance to an understanding of how small businesses can prosper.

* * * * *

Serious analysis of what it is that I had really learned in the course of my career as a small business person became possible only after I developed the idea of the business space. This is the term that I began using to provide an overall label for the social, psychological, and philosophic environment into which a business is fitted. Since these are not words which flow naturally from normal business discourse, it follows that the characteristics of the space in which a business can be located are not uppermost in the minds of either those who start businesses or even those who have been happily operating them for many years. Nevertheless the idea of the business space turned out to be of fundamental importance to my analysis.

As I confronted my own business experience with the results of my business reading I recognized that my business did not conform well to established norms. Originally I conceived this to be a consequence of personal idiosyncrasy. I did things differently because my business was an expression of my own peculiar notions and ideas. However, the results of extensive networking with many other entrepreneurial business people soon revealed my business approaches to have a great deal more commonality than I had previously expected or that could be explained by personal eccentricity. It was as if each of us had independently