Closed storefront on March 3, 2021.Fred Lum/the Globe and Mail
Rob Csernyik is a 2022 Michener-Deacon fellow and a contributing columnist for The Globe and Mail.
My first few weeks of boutique ownership were financially underwhelming, but I had high hopes Boxing Day would turn my fortunes around. I was used to customers rushing the doors of Pier 1 Imports, where I’d previously worked, to snap up discounted housewares with abandon. Now that I owned a home decor store – Habitat in Cornwall, Ont. – the profit would be mine. Hopefully, enough would pass my till to correct course.
Instead, Dec. 26, 2013, was a grey, snowy day when the shoppers who bothered to brave the chill headed to chain stores on the city’s fringes or the decaying mall down the street. I spent the day almost alone in my shop, pondering if I really knew what I had gotten into. I hadn’t become an entrepreneur as a flight of fancy. I’d planned for five years. This included working for several retailers to gain experience, creating a business plan and sales forecasts (both deemed realistic enough to secure funding), and taking probing inventories of my appetites for hard work and risk. Still, ticking these boxes was not enough to prepare me.
Boosters of entrepreneurship tout going into business for oneself as “the great equalizer” – a career path anyone with enough gumption and willingness to succeed can thrive in. Admittedly, this was part of its allure to me. I could forgo a traditional 9-to-5 job and blaze my own trail alongside like-minded, scrappy mom-and-pop businesses. That’s what articles and podcasts I took in online and the case studies I read in university prepared me for.
What’s missing from the equation are realistic discussions of money and privilege and how those lead some entrepreneurs to have wildly unique experiences even though they may follow similar paths.
As I tried to improve my fortunes, I found my store-owning peers and I took different approaches to revenue generation. Mine, thanks to a top-of-my-budget monthly rent, loan payments and startup costs, was a state of heightened urgency. My constant refrain was a line from a Coolio song, “If you don’t work, then you don’t eat.” My counterparts took more relaxed attitudes. When I tried rallying the troops to open on Sunday afternoons when our target customers were off work, one prominent store owner quickly popped my thought balloon. They said opening for $300 in sales wasn’t worth the effort. Though they grasped that number from mid-air, four Sundays at that rate would generate my monthly rent for Habitat. This person had the luxury of owning their location outright, so it was easy to take that afternoon off.
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Another time, I heard from disappointed customers that a fellow new business closed early on a sunny Saturday. I learned later from the owner that they were unwilling to sacrifice the pleasant weather for work, posted hours or not. I once believed the entrepreneurial growth mindset – that hunger to maximize income – was not only part of a business owner’s DNA, but also a driving force behind their vocation. Realizing it wasn’t was unmooring. Where I’d once imagined having allies to help drum up business with, sharing marketing costs and efforts, I learned quickly that many didn’t feel it was worth their while.
A local executive once described what I was witnessing as the difference between people who build businesses and those who run companies as hobbies. This distinction hadn’t come up before and illuminated an inconvenient truth. Profit alone doesn’t keep some companies afloat. That’s only true if you believe everyone has the same chance at being an entrepreneur. Most people can develop the aptitudes over time or certain skill sets to poise them for success, but at the end of the day these aren’t the most important factors in remaining a going concern.
There are a variety of privileges not apparent at first blush, but which lead some entrepreneurs to success that those with less wealth, connections or dissimilar backgrounds can’t duplicate. For some, it’s benefits stemming from being legacy businesses – outsized reputations, deep-rooted customer bases and long-term credit terms with suppliers. Some may enjoy paid-off student loans, mortgages and vehicles. Others benefit from family bailouts or high-earning partners who can keep the household’s lifestyle afloat even if the business suffers. For others still, there’s an ability to draw from home equity, investments or retirement savings when emergencies arise instead of having to consider folding. Nothing about this is equal, but I hadn’t ever considered how it might affect my fate.
A well-known academic paper, which I learned of only after opening my business, suggested that such privilege leads people to entrepreneurship in the first place. “The probability of self-employment depends positively upon whether the individual ever received an inheritance or gift,” write David G. Blanchflower and Andrew J. Oswald in What Makes an Entrepreneur? I had neither, but this knowledge made me look at my peers differently and softened the blow with what was to come.
Habitat barely lasted until the summer. Sales were too far below even my most conservative projections to continue as I was. I tried to salvage my dream. I moved further west to Brockville, downsized and rebranded. Even with bootstrapping –thinking creatively and stretching dimes into dollars – my fortunes didn’t improve.
Some people suspect I didn’t give my business enough time, but without enough revenue there’s only so far to take it. Looking back on my 15 months of store ownership, if I’d had the means to invest a further $50,000 I might have kept afloat personally and professionally, but that money would be a sunk cost and I didn’t have access to it. Some business owners do. They dip into savings, borrow or liquidate enough assets to make this happen. I don’t begrudge them this, but I take umbrage with it not being discussed as openly as it should be.
One consequence I endured was blaming myself for not being as successful as my peers to a degree that was unproductive and, frankly, unkind. I had drank enough entrepreneurial Kool-Aid to believe that we were all in the same boat, so my failures meant I had messed up in ways that other people hadn’t. Over time, I’ve found this to be overly harsh and ignorant that some entrepreneurs benefitting quietly from other factors.
Privileged entrepreneurs reflected this to me in conversations, frequently mindless of the gulf between us. They would suggest I improve my fortunes by trying a more positive attitude or visualizing a brighter future. Other suggestions included applying for more credit facilities and, once, being asked if I had a rich uncle I could hit up.
When I tried to bring up challenges, it wasn’t any better. Those at entrepreneurship’s bottom rung like myself were more open to them, but my comparatively well-heeled peers didn’t want to engage in these conversations. Not to offer advice, or even to acknowledge the existence of challenges. This is little more than delusion, and not everybody can afford to be delusional. Instead, I had to do crisis control on my own in real time.
If I had better understood the inequalities in entrepreneurship, I would have been more prepared for the challenges I faced, and less anxious and less stuck in my head. Today, a decade later, I don’t believe we’re much further along in discussing these realities. Too much of the focus is on cultivating an entrepreneurial mindset rather than focusing on the challenges and inequalities that can shape the experience of business owners and affect their success.
Ultimately, that day a decade ago where I worried about my business’s future wasn’t for naught. By March, 2015, I was piecing together a new life, my business closed, the storefront’s keys handed over, the components sold off piece by piece. Talking more openly about how entrepreneurship isn’t a totally equal playing field and instead one where certain privileges make the difference between a business thriving or flopping like mine should be table stakes.
Challenges don’t scare entrepreneurs away from taking the plunge once they make up their mind. I’ve played out scenarios in my mind for 10 years only to realize nothing would have kept me from taking my moonshot. That’s why being more open about the inequalities present in the so-called great equalizer won’t do great harm. Instead, had I understood them better going in, I would have taken my failures less personally, instead of believing that everyone launched from the same starting line and I was simply abnormal or unlucky.
I think it will be a hard sell. Not that the topic isn’t valid, but because some people will consider it too negative or for others it will destroy myths of being self-made. On the other hand, these discussions would be an almost radical act, going against prevailing attitudes. I can’t think of something more fitting for entrepreneurs to do.
Rob Csernyik