In many ways, the characteristics required to become an entrepreneur can end up pushing people over the edge. In the beginning, entrepreneurship can be a very lonely journey and in such instances entrepreneurs have to take themselves very seriously and give themselves an air of credibility. They become very good actors.
It is a fine line between bluff and deceit, between confidence and arrogance, between an entrepreneur and a conman.
Entrepreneurs undoubtedly start to believe their own publicity and believe their own hype.
Once the business grows, most entrepreneurs get bored by their business, by the details and prefer the upmarket lifestyle, they fall into a trap that a lot of successful entrepreneurs falls into.
Money attracts people within a short space of time at a pace that you are unable to assess who is real and who is fake. Money gives you attention. If you have lots of money, people listen to you, even if you say mundane and boring things, people will listen.
Entrepreneurs often enter into dubious business dealings and in the process get mixed up with people of shady characters who deflect their attention from what got them where they were in the first place.
As the businesses grows, the entrepreneur’s reputation grows and his financial credibility get established. With the ability to raise funding, the entrepreneur would borrow R30 million, buy a business and sell it three years later for R100 million, and everyone is happy. Debt used astutely, judiciously and with insight is not a bad thing. Entrepreneurs have been able to build their empires using debt.
When one business succeeds, they move to acquire another business in the process being oblivious to looming economic and financial recession. Their growth and prosperity makes them feel that they are invisible. The amount of debt in the business increases, the business plans are ill-conceived but are funded because of the milliner status of the entrepreneur.
The mistakes are about an entrepreneur having little bit too much self-belief and far too much debt.
Money makes people feel that they can solve any problem they encounter. Buy their way out of problems or we often say pour money to the problem and hope it will disappear. It is in this instances that when they are unable to repay the bank, or when they have not being paying their taxes that when SARS issues them with a huge tax bill, in retrospect, the warning signs were always there, they were flashing red, 80 storey high and flashing “danger” but entrepreneurs feel they can use their millionaires status to buy their problems away, buy the tax man or buy the politician to make their tax problems go away. “Everybody has a price” is the phrase that’s used often. Some even feel they can tell off the banker just to buy time for the loan repayment until their businesses turn around and start repaying the loan.
Most entrepreneurs would learn about their mistakes if they were not busy denying them.
Too much money makes entrepreneurs think they can conquer any problem they face.
When a problem starts a little drop, they ignore it, and then another drop, and another one until over time that drop of a problem turns into an ocean. By that time, the problem is too much to do anything about.
Steady but surely, the business empire becomes a house of cards. Take one card away from the bottom, the entire house collapses.
It takes one whistle-blower, one huge tax bill, one bad business deal, one wrong business partner, then the entire business empire collapses.
It is a thin line between that 3 piece Armani suit to an orange prison suit, from the lavish corner office to the six by six prison cell.