Being an entrepreneur is so glamorous right? You work your own hours, determine your income and make your own rules. It’s the life you always dreamed it would be. Or is it? Maybe you are in a situation that has forced you into the small to medium business market and you are asking yourself if you are cut out for the demands you will face as a business owner. More importantly, have you counted the costs involved in being your own boss?
To many people, being an entrepreneur is a dream, a fantasy even, but the reality is that being one’s own boss places a whole new set of demands not only on the individual, but on his or her family as well. Today, I want to help you ask yourself some tough questions. I want you to think about the challenges and the stressors that may make your leap into the business world a success or failure.
When thinking about the demands of owning a business, there are certain things that you may not think about as an employee. Perhaps these questions will deter you, but my hope is that they instead help you to feel even more resolute in your determination to make the new endeavor a success because you have truly counted the cost. So here we go!
1. Are you prepared to lose your savings?
One of the realities of owning a business and starting it from the ground floor is that it takes a lot of time AND money. One of the main reasons why start-ups fail is due to under capitalization. As a small business owner, there is a high possibility that you may lose all or part of your investment. Can you and your family handle it if that were to happen? What contingencies will you put in to place to mitigate this risk?
2. Are you able to work 10-12 hours a day, 6 days per week?
One of the fallacies of owning a business is that you can take off any time you want and only work one or two days for just a couple of hours. In reality, most start-up business ventures require more time and energy than anything you have ever done before. As a small business owner, you need to be prepared to put in the work on the front end in order to reap the rewards on the back end. Do you have this kind of stamina?
3. Where does time spent with your family rank on your list of priorities?
Your family will be your strongest supporters or your greatest deterrents. The demands of owning a business will likely keep you away from home longer than you expect and definitely place a strain on family relationships. Having grown up in a home where my parents owned a small printing company, I remember the long hours and late nights they would work to meet deadlines. It wasn’t uncommon for me to find myself doing homework on the floor in the back office or pulling my jacket over me and falling asleep on the concrete floor. Can your family accept these demands?
4. Are your family relations already strained due to financial obligations?
Chances are pretty high that if your personal finances are struggling now that they won’t improve quickly just because you start a new business. In fact, the situation will likely get worse — much worse — before it gets better. The number one cause of divorce in America is related to personal finances. If you are already facing financial struggles due to limited funds, you need to keep in mind that starting a business right now may not necessarily be a wise idea. Whatever your situation, you still need to keep this in mind!
5. Do you know what you would do if your business failed?
It’s a harsh reality, but businesses fail. In 2008, seven out of 10 new employer firms survive at least two years, and about half survive five years. You’ve heard the old adage, “Failing to plan is planning to fail.” It’s also true of business failures. I’m not saying that one should plan to fail, but I am advocating a contingency plan in the event you don’t see the kind of success for which you had hoped. Contingency planning is simply taking a “what if” approach to your business. Through this process, a business owner can look at situations that will detract from reaching his or her goals and then puts into play a plan to reduce a given situations impact on the business. If you aren’t prepared when challenges arise, chances are you won’t survive.
These are just a few questions one needs to ask him- or herself, but it is by no means intended to act as an exhaustive list. Starting a business is no easy task, but with realistic expectations going into the game, one will dramatically increase his or her success rate. Stop and take the time right now and ask yourself these critical questions.
About the Author:
Stephen Combs is a certified NxLevel® instructor and previously has volunteered with Redemption Marketplace Academy where he taught budding entrepreneurs the basics of starting and running a successful business. He currently owns & operates TechnoMedix, a computer repair company, as well as consults with small business owners and provides them with the necessary tools to grow existing businesses or start a new one. Stephen graduated magna cum laude from Western Carolina University and holds a Bachelor of Science Business Administration degree in Management. You can read more from Stephen at his blog, The Entrepreneur’s Workshop.
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Disclosure of Material Connection from Stephen Combs: I have not received any compensation for writing this post. I have no material connection to the brands, products, or services that I have mentioned. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”