Recently, I had a rather stirring debate with a “consultant”. His contention was that there is no difference between paying just “one’s self”, and actually paying a number of employees.

“It’s the exact same thing”, he sniffed, “In fact, I’ve gone many times without a paycheck.”

(“I’ll bet you have”, I thought to myself, “especially if this is your mindset.”)

The question that I did not ask him was, “And who loses when you miss a payroll of one --- that one being YOU? As opposed to what happens when you miss a payroll of MANY?”

I always like to say that running a business is perhaps the toughest challenge (short of combat and parenthood) that a person can face. No less than Jim Rohr, CEO of PNC Bank once said to me, “I don’t even know how you entrepreneurs do it … I know that I certainly could not (the topic was starting and growing a business from scratch) do what you do.”

And, the toughest part of starting and growing a business? Well, and in my opinion, it is making a payroll … every two weeks, for every month, of every year that you are IN business.

“Tougher than coming up with the business idea?” you ask.

“Yes, tougher than that and tougher than raising money, selling product, and finding/hiring/retaining great employees”, is my answer.

“So why is this particular part of a business so difficult?” you ask.

Payroll is so difficult because it is “every two weeks”, and what’s more, it is every two weeks --- FOREVER! (Kinda like a marriage, I guess.)

Which means that you are constantly weighing costs and benefits --- “Can I afford to hire this lady?” How do I make my payroll and also sell my services at a competitive price?” --- and on and on.

Most businesses operate on very thin margins. And in certain times of overall economic drought, those margins become even thinner.  Nobody can see these times coming, and maybe they never do (come, that is) --- but this is precisely the stuff that occurs each and every day, and this is precisely the stuff that entrepreneurs must deal with.

You see, there is nowhere for an entrepreneur to “pass the buck”, as there is in most of the rest of the business world.

Typically, a businessperson’s payroll is by far and away the single biggest part of her or his (non-cost-of-goods-sold) cost structure. The only thing that even approaches this cost is probably rent, with health and other benefits fast closing the gap on rent!

In a well-run business, new hires are scrutinized over and over. For there is no single cost that exceeds the cost of a “bad hire”. Consider:

• You must define the job (this costs money),
• Then, you must begin recruiting, and no matter how this is done (third party “head-hunters”, ads in newspapers (never do this! Always hire people who are not looking for a job at the time!), or by “working your network”. In all cases, recruiting is VERY expensive,
• Next, you must interview (also very expensive --- especially if you are going to do it “right”, which means having your key people also interview the person in question),
• Then, you must test that person’s aptitude for the job, and then finally,
• You must give that person a “honeymoon” --- usually at least sixty days, to see if he or she can “cut it”.

Fortunately, this hasn’t happened to me since about 1985, but I can remember some very dark days, vis-à-vis “payroll-making”. In fact, I can vividly think of at least three instances wherein I had at least a $50,000 payroll; and not including payroll taxes --- this is an entirely different discussion --- due the very next day and less than five grand in my bank account.

Did I make these payrolls? Yes, I did. (In point of fact, I have never missed a payroll, and I am now in my thirty-sixth year of doing business.) But the “toll” on my psyche and “soul” was considerable. I will admit that there are numerous things that I have done to make my payrolls that, and looking back, I am not at all proud of having done.

Right now, I have ownership stakes in a number of companies. Do I take a paycheck from any of them? Ix-Nay. I do not. But can my workers always count on their paychecks at the end of the month?

You betcha they can. Like clockwork.

All of this is just another reason why, and when I go to parties and other social functions, I tend to work my way around the room until I nudge up to other entrepreneurs. You see, I have now probably reached the stage of my life whereby these (entrepreneurial) folk are the sole persons whom I really want to speak with. Because I just no longer speak the language of those who prefer to earn their living by (what I call) “trading hours of their life for dollars”.

Because I know that both “breeds” just come from two different planets. Why even bother to try and crossbreed? (Again, I give you the consultant --- I may have well been speaking Swahili to him!)

So, I simply divide the world into two types of people --- “those who have made a payroll, and those who have not made a payroll” --- because I consider those in the former group somewhat as a combat veteran must consider a fellow soldier who worked in the rear echelons, away from the bullets and blood.

In other words, I find people like my consultant to be “businesspeople light”. They may have some idea as to what “making a payroll” is all about, but they have not yet gained the fortitude and character that can only come from having done this over and over --- and for a significant amount of time.

Sorry, folks --- but this is a rather exclusive “club” --- and if you want IN, well, you know exactly what you have to do.

But please do not tell me that it is “no big deal”, as did this gentleman. Because, and by definition, you simply cannot. Hell, I think I understand natural childbirth. But I would never, ever, EVER portend to say that I have felt it!

I always say on my radio show that, “Owning your own business is the Marine Corps of commerce.” Let me now go one step further and say that, “Making a payroll, consistently and over a long period, is Iwo Jima!”