People Can Make or Break Your Small Business: Place Your Trust Wisely.
People can make or break your business. This includes everyone from your professional advisers, suppliers, customers and clients to your employees, business partners, and even your friends and family. Making wrong decisions about any of the people with whom you deal can significantly hurt your business and impede—even destroy—everything you are trying to achieve.
When it comes to people, I’ve made both good calls and bad. In most cases, the bad calls were no big deal, but a few of the bad choices left me feeling angry and betrayed. (One of them left my checkbook significantly lighter.) There’s an old saying: Business is business and friendship is friendship, but when it’s your business, it’s always personal. Fortunately, I’ve been able to rebound from bad calls, but not all entrepreneurs are so fortunate. Some find placing their trust in the wrong people to be too devastating, emotionally and financially, to overcome.
A number of years ago, I personally saw the tragic ending for a friend who simply couldn’t overcome business betrayal. I’ll call her Sally.
Sally had tremendous entrepreneurial drive. She built a business from nothing in 1993 to nearly $100 million in revenue by 2006. She recognized that she didn’t have the sophistication to develop the structure and process for such a large organization, so to help her manage the rapid growth, she hired a chief operating officer. Things seemed to be going well until documents from the IRS arrived indicating she owed $2 million in back taxes.
A complicated investigation ensued, and it turned out that the trust Sally had invested in her second-in-command had been misplaced. According to sources close to Sally, the COO, who we later learned had previously been convicted of IRS fraud, failed to pay the Sally’s company’s federal taxes for two years. The IRS troubles caused other financial problems, putting the business in dire financial straits.
One Thursday evening, Sally left her office and never returned. Her body was found on Saturday. She had taken her own life. As one of Sally’s friends noted, “Sally believed that she would lose herself if she lost her business. She had fought so hard for so many years to build that company, and she was deeply ashamed about her financial problems.”
This is an extreme story, but I feel compelled to share it because it drives home the importance of understanding that your business is only as good as the people involved with it. Surround yourself with quality people, and be careful about where you place your trust. Every choice you make has an impact on your success. Oprah Winfrey says — always sign the checks. Sage advice from a successful entrepreneur.
