Acadenema

The antidote to cranial rectal insertion in the academic world

Why being a professor is NOT like running a small business

This week, Professor Alice Gast, President of Imperial College, London, reiterated a tired old comparison between academics/professors and small business owners. In a proposition I have heard from many academics, she said, “Professors are really like small business owners. They have their own teaching to perform. They have their own research and they have their research funding to look after. They work with teams of post-docs and post graduate students.” (From Mark Carrigan’s blog). 

To be fair, I used to make this comparison too… but then I became a small business owner1 and I realised how wrong I had been.

I will concede that there are some similarities between academics and entrepreneurs at the start-up stage. I even use this comparison when I run workshops on grant writing because these are the only two professions where you have an individual (or small group) who start with what they think is a great idea, and then have to convince someone else to fund it2.  One profession calls it “investment” and the other calls it “grant funding”, but it is the same model: here’s a great idea, please give us money to make it happen.

But that is where the similarity ends. Even in this comparison, it is important to observe a key difference. When they do not achieve the investment/grant funding, one profession continues on as normal, while the other would be unemployed.

After the business has actually started, the similarities disappear almost entirely. Here are some key ones:

Tax. Academics are entirely shielded by their finance departments when it comes to corporation tax, VAT and PAYE (if they have staff in their team). Small business owners need to be on top of this all the time. In a large enough SME they may employ someone to take on this responsibility, but they better at least understand it, as they are ultimately responsible.

On the topic of PAYE, what about employees?  It is quite routine for Professors to take on Postdocs with no consideration of their legal responsibilities as an employer — their HR department will try their best to ensure compliance with employment law, while the professors will typically just complain about the added bureaucracy or object to “the administrators” making them push paper around as part of an audit culture. Small business owners need to understand, and comply with, employment law, including the difficulties of trying to manage staffing over long periods of transient short contracts (there is no culture of “soft-money” and no bridging funds) and rarely does the small business owner have the luxury of secured funding for their staff over many years (as you do with grant income).

Talking of money, there is always cash flow, the most deadly topic there is for a small business. It is a cliff that is constantly only months away for a small business.  Whereas, if an academic spends a few quiet years not brining in research grants, then … well… usually nothing. It is quite common to have periods of no grant success (given that much of it is random, as I’ve blogged about before) and most institutions can tolerate that (although increasingly, some can’t). There is a big safety net (and so there should be) for academics. The small business owner has no such luxury. Time and again, small businesses go under, not because they are not selling, but because the sales invoices get paid far too late — the money comes in long after it has gone out.

Finally, Health and Safety. Most academics see this as the very pinnacle of administrator-led bureaucratic box ticking. But the small business owner risks prosecution and even jail if they get it wrong. Whether driven by legislation or insurance company demands, the reality is that the buck stops with the small business owner.

I straddle both worlds. I am a professor and a small business owner. I believe this has given me a better perspective on both. It is an enormous privilege to be an academic in a prestigious university and as a business owner I now fully appreciate the opportunities, the support and the protection that the university gives me as a researcher and a teacher. (BTW: I believe it is entirely correct that academics should be left to get on with the clever stuff they are good at, see previous blog.) But please, Prof Gast, and anyone else who thinks the same way, do not disrespect the UK’s 5million+ small business owners by ever again suggesting that being a professor is anywhere near like being a small business owner — it merely demonstrates a lack of understanding of what it means to run a small company.


1 I am CEO of an Edinburgh University spin-out company called Carbomap.

2 OK, I recognise that book authors, script writers, movie directors and some other creative professions are probably also in this category.

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2 comments on “Why being a professor is NOT like running a small business

  1. alanmccolm
    April 18, 2015

    Good!

    Best regards

    Alan

    (m) +44 (0)7764 471 697

    Alan McColm,

    Director, McColm Buchan Ramsay Ltd.

    and The Real Food Café Ltd.

    Partner, Blue Onion

    European Associate for EV CONTAINERS CORP

    Purity by Design: http://www.evkeg.com

  2. Andy Iwanoczko
    April 20, 2015

    Hey Iain,
    I like your style. When are we going to collaborate?
    I think there is milage in doing so – properly.
    Cheers
    Andy

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This entry was posted on April 18, 2015 by in Business and tagged , , , , , , .
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