Lessons from the Past 128: Beware of the One-person Company

Walter Vieira 16 May 2025

Economy & Nation

When we talk about family business, we think about a family, and maybe even about two or three generations. But there are times when we encounter a one-man institution. A person who has the intellect and the capability to build a business just by himself, and make it large, or even international. There is no succession. And there can be no clone. No one else can do what this one person can do, and does.

Such a one is Warren Buffett. He has built an empire- Berkshire Hathaway- all by himself. It has been done, brick by brick. Sometimes, going against the grain, and against the sense of many of his shareholders. But he has proved himself right in the long run. Especially, during and after the dotcom bubble!

How will Berkshire do after Buffett? Sure, we are told that he has trained Gregg Abel, to carry the flag. But will he do it as well? We will have to wait and see.

With a professional output that involves only the intellect and keen judgment of an individual, it is very difficult for others to either greatly contribute or participate. Thus, this is also true for great physicians, surgeons, lawyers, architects, and in many other professions.

In fact, participation in such enterprises, which have a foundation of a one-man/ woman chief pilot, can be dangerous and risky.

Some years ago, a friend who was an eminent quality management consultant floated an associate company to deal with projects. Four friends invested in the capital of the new company, which was private limited and not public. It was a sizable amount of investment. Three years later, the capital had eroded by 50%. My friend, the chief executive officer (CEO) and chief promoter, had been drawing his slice of emoluments and expenses; the sales were poor, and the losses kept mounting every year.

The investors felt that enough was enough, and pulled out with half of what they had invested, so that they would not lose the total amount! There was no recourse. It was a dependence on the expertise of ONE person- and this can be very risky. The investors had made a mistake in not taking this into account when they decided to invest. The old story of all “eggs in one basket”!

It then struck me that it is not for nothing that even large consulting firms, or lawyer firms, or medical polyclinics, are not open to general investors. They are not public limited or ‘listed’ companies. Only those who can contribute expertise have a share in the firm, and the shareholding ceases when the contributor or partner leaves. It is not an association for a lifetime, and there is no opportunity for family succession. It is the here and now! A constantly flowing stream of ‘present contributors’.

It is a different kind of family business, which is not for all the family – but only for that PART of the family that CAN contribute; and ONLY when they DO contribute!

All the others who are looking for investment opportunities and growth of their wealth, had better stay away.

Sometimes, one can get an emotional tug, like when I found my friend and also an old associate, got ill. He founded and now heads an accounting firm which now has 1,500 employees, working for companies in 18 countries, and now perhaps, with 20 partners. He had to quit and move on. He had no succession from within the family. He wanted to write a history of the company he had founded, but could not publish it, because some of the partners did not approve of some of the things he said in the script!

He died a broken man, broken in spirit, even more than from the physical ailments that he had.

For me, this was another angle of looking at a ‘one-man’ company - even a successful one for many decades!

That does not mean that one should not start a ‘one-man’ company. A company always has to start somewhere!

(Walter Vieira is a Fellow of the Institute of Management Consultants of India - FIMC. He was a successful corporate executive for 14 years, capping his career as Head of marketing for a Pharma multinational, for India, Bangladesh, Sri Lanka- and then pioneered marketing consulting in India in 1975. As a consultant, he has worked across four continents. He was the first Asian elected Chairman of ICMCI, the world apex body of consultants in 45 countries, in 1997. He is the author of 16 books, a business columnist, international conference speaker and has been visiting professor in Marketing in the US, Europe, and Asia for over 40 years. He was awarded Lifetime Achievement Award for Consulting in 2005, and for Marketing in 2009. He now spends much of his time in NGO work - Consumer Education and Research Centre, IDOBRO, and some others.)

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