Starting your own business can be a fantastic feeling. It can also be a nightmare. The pride of seeing your business grow and succeed is often offset by the stress and risk of failure that you’re constantly facing. It takes a lot to make a business successful, and not everyone is cut out to handle it.
If you’re thinking about going into business for yourself, read through these six commonly overlooked aspects of business ownership. It could save you a lot of wasted time, money, and heartache.
The Risk of Failure
Before you look at any other aspect, understand that the odds are stacked against you. I’m sorry, but it’s true. Entrepreneur.com reported a study that showed only 50% of businesses are still in operation after five years. By the time 10 years pass, that number will drop to 30%.
Understand - this isn’t to discourage you. I want more people to be successful business owners, but I also want them to understand the very real risk of opening a business. You can do everything by the book but if the market isn’t in your favor, you may not survive. You really need to do some soul-searching before you decide if such a gamble is right for you.
The Time It Takes
Many people open a business with the promise of setting their own working hours. While that part is true, what they don’t realize is that running a business takes an incredible commitment of time, especially early on. More Time: More Profit calculated that a new business owner works an average of 50 to 60 hours per week.
The bottom line is, whether your work from 7 in the morning to 7 or any other time of day, 12 hours is 12 hours. You can also expect that you’ll need to pull some weekend duties to keep your business running too.
The Fact That You’re Still Working for Someone Else
The promise of being your own boss inspires a lot of people to start their own business. We’ve all dealt with bad leaders at one point or another, so I don’t blame you there. But you won’t be quite as free as you think.
Even as a business owner, you’ll have a new set of bosses that you answer to - your clients. They’re going to expect you to live up to your promises, and you have to deliver. If they ask you to deliver something in a certain way, you have to be prepared to give them what they want, within reason. If you only ever do things your own way, you’ll never gain new clients and you’ll never grow.
The True Cost of Ownership
Keeping more of the money they make is a big reason why people choose to open their own business. It’s true that you can award yourself with whatever salary you choose, but operating a business is expensive, and just starting one can cost between $5,000 and $10,000.
You might think all you need to do is rent out space, set up a computer, and get to work, but it’s not that simple. Every business is going to have to spend money on the following sooner or later:
- Marketing and Advertising
- Insurance coverage
- Technological costs
- Employee costs
Skimping on any of these costs, especially insurance coverage like disability, can be a huge risk. This is true whether you want to open your own medical practice, a construction firm, or even a simple corner shop. If you’re not prepared to put your own finances on the line, don’t open your own business.
How Long It Takes to Earn a Profit
I don’t think anyone starts a business and expects to turn a profit on day one, but many people don’t realize how long it can take. Even if your business is a small, service-oriented company, it might take anywhere from six months to a year before you actually see a profit. In fact, a common reason that businesses close is that they eat up their startup fundings early, and don’t have anything to sustain them for the year.
How You Will Truly Distinguish Your Brand
You might think that the new patent you based your startup on is truly revolutionary, but here’s a hard truth - it’s not. Somewhere out there, someone has already made something that promises to do the exact same thing or something very similar.
You won’t succeed in business if all you have to go on is how “new” your product or service is. What will, however, make you successful is marketing your product effectively, treating your clients with respect, and creating value with your brand that competitors can’t beat.