The exciting, slightly terrifying adventure of small business ownership
This is a big week for us at Styrka — while we paid for the renovations with our own savings, we needed a small business loan to help pay for equipment; this week, our funding has come through and we're finally ready for our big equipment order. We've already acquired some used equipment, because as a privately owned small business it didn't make sense to, for example, pay $5,000 for a new treadmill when we could source very nice used ones for a fraction of the cost. But most of our equipment will be new, and it's a big investment!
This past week I interviewed with fellow personal trainers James Pesch and Steven Morales for their podcast LocalALists; their show has so far consisted of interviews with successful businesspersons in the greater Tulsa area, but they thought it'd be fun to follow Styrka from inception to groundbreaking and beyond. In our first interview we talked a lot about the risks of a small business, especially one funded through personal savings and loans.
I remember that over the course of the conversation, the statistic was tossed around that nine out of ten small businesses fail. That's actually not true — it was (in)famously said by a politician during a campaign. The truth is that about half of small businesses have a five-year survival rate and, according to the Washington Post, even that may be overstating the failure rate:
- What’s the time frame? Two years, five years, 10 years? That can make a big difference.
- Does “fail” mean that it goes out of business because it was not financially viable? Or does that also include data about successful enterprises that merge with another company?
- Wouldn’t failure rates be different for some industries than others? Does it make sense to lump all businesses together?
Okay, but let's just say that the odds are about 50-50. That's enough to scare plenty of people off, but it's also a sort of glass-half-full/glass-half-empty kind of scenario. There are certainly no guarantees in small business ownership, and failure is a very real prospect that looms in the back of any entrepreneur's mind.
At the same time, is that really all that different than any other line of work? If you're hired by a corporation, there's no guarantee that you won't be laid off; there are no guarantees in any job that you'll be treated fairly, that you'll have opportunities for advancement, or that your industry won't suffer in an economic downturn.
As a small business owner, the goal isn't to eliminate risk but to mitigate it. Minimizing overhead costs, borrowing prudently, managing finances diligently, and — above all, and most difficult of all — providing a strong product and great customer service are all integral to long-term success. Even a small business that does right by its customers can struggle under the weight of high overhead or poor financial planning. I won't divulge any figures, but we're fortunate to have low overhead in a relatively high-income area. Using our own savings has enabled us to avoid taking on an overbearing amount of debt, and the sum that we've had to borrow is manageable and will not cripple us in a worst-case scenario. We take our bookkeeping very seriously and have worked hard to forecast our expenses and budget accordingly.
Nonetheless, that worst-case scenario does linger in the back of our minds. With Styrka, we're starting from scratch — no members, no reputation, nothing. We have lofty goals and high expectations of ourselves in what we will be able to deliver to our members. Neither my wife Vanessa nor I have done anything like this before. Although I've worked in the industry for eleven years, I know that ownership is a very different kind of challenge.
Michael Jordan Said It Best
When I was a teenager, my parents gave me a book by Michael Jordan called "I Can't Accept Not Trying". He said he could accept failure, and that indeed he had failed many, many times in his basketball career. But he could never just give up, just not even try.
And that is how I feel about Styrka. Sure, there's risk. Maybe it'll fail spectacularly. Maybe it'll do well for a little while and then just fizzle out. But maybe not. Maybe it will be the huge success I know it can be. Maybe we'll be able to expand to multiple locations, or who knows — even become a national franchise!
I don't know what will happen; no entrepreneur does. What I do know is that I believe strongly in the concept behind Styrka, and that Vanessa and I have the passion and the discipline to commit ourselves fully to its success. I'm passionate about the athletic community in Tulsa, and I want to give them a place to train like no other — the grit, chalk, and iron of an old-school barbell club with amenities usually only found at sterile corporate gyms. Above all, I want to foster a community of like-minded athletes who encourage, educate, and support one another. I can accept failing to achieve these things. But I can't accept not trying.