What’s in a name, in other words. Well, the extreme division of labor in a knowledge economy (is Peter Drucker’s characterization ever passé?) makes job descriptions challenging, much less names. Still, “Praexis Business Labs” carries some of that weight. Let me explain by way of very brief history.

Tom Walker, Sr. and I have worked providing information and advice to the owners of small businesses (typically but not exclusively, gross sales of $15 million or less) for thirty years and fifteen years, respectively.

Three decades ago the surest and really, the only, way to give owners an informational advantage was through accounting. Reports had to be on time, readable, and accurate. These are loaded terms, but for the sake of brevity let me just say that they are terms of art. Meeting those standards is a cooperative effort between accountant and owner; they are met when both agree that they have been met. As I said, terms of art. For years Sr. used a slightly-coined word to encompass these principles: actionable.

If you can allow me a cliché: things change. Timely, accurate, readable financial statements used to be an advantage, because so few people had them and there were so few other information advantages that a smaller firm could afford. Over the years, accounting has become easier for a small firm to handle, at least in the clerical checking-payables-receivables mode, which makes up 90% of accounting anyway. More significantly, all sorts of other information are readily available, cheaply or freely-on customers, trends, the economy, anything under the sun. The avenues of gaining some informational advantage in one’s niche are many and wide open.

So why Praexis? We took the word from the term Praexology (or praxeology, depending on which text you are reading), which economists of the Austrian school used to describe their study of economics–the study of human action. I became acquainted with that school of economic thinking just out of college through the writings of Friedrich A. Hayek. But as he spilled much of his ink on the broader topic of freedom (The Road to Serfdom is a classic), one of his own teachers, Ludwig von Mises, devoted much of his writing to economics, or praexology.

My affinity for the Austrian School is not primarily a commitment to the free economy–though whatever its faults, no one has proposed a viable alternative. Many supply-siders and monetarists, and even post-Keynesians profess the same commitment. Rather, it was that the Austrians in building their economic understanding started with the individual, rather than with complex mathematical aggregates. Mises in his magnum opus, Human Action, devotes a lot of writing to the entrepreneur. When someone writes about the people I work for, I find it interesting.

As is generally true in the writings of Mises or indeed most Austrians, titles don’t describe people but actions done by people. In a nutshell, the entrepreneur is acting as sort of visionary. This is not unattainably lofty. When people make an assessment about some future situation and put their ideas and time*-themselves-on the line to see it through, they are entrepreneurs. What they anticipate, and what they do, can be completely homely whilst remaining completely true to the idea of entrepreneurship.

Praexis is about human action, and in particular about the entrepreneur. Not only does it describe our clients, it restates Sr.’s earlier standard. Advice must be actionable.

The next two words in our name deal with theory: business labs. As is said on the front page, this is a place to test ideas before the commitment to them is irrevocable. We are occasionally accused, if it can be called that, of being theoretical. Well and good; the theory we are testing is the entrepreneur’s.

Technically, I suppose it is a hypothesis we are testing. It refers to the near infinitude of “what if” questions that arise in an entrepreneur’s mind in the course of ordinary business, to say nothing of the opportunities that present themselves in the extraordinary events. These questions only remain “theoretical” in the pejorative sense if they remain unexplored. Yet an entrepreneur is ontologically bound to such explorations…I mean, that’s the definition of being an entrepreneur.

Realistically, a lot of ideas stay unexplored. No one has time or energy to nail down all the implications of every idea. But one’s sense of the future, their interests, and often enough, external events, push some things to the fore. Our work begins somewhere in the thought process between all the ideas that come to the entrepreneur and those that gain his or her attention.

The business laboratory is where these ideas are selected and tested. The point? To make better decisions about what to do next. We talk a bit more about our approach elsewhere on the site, so I won’t restate here. Watch this space; Tom Sr. is writing a book on small business from 30 years experience and research. He will post some parts of it here. We will also post our weekly or monthly thoughts and rants on the small business life. There’s always something to explain or decry.