I started my own business in 1991 and believe me, I would never work for someone else again. I love being able to create the business of my vision and not being dependent on anything but my own hard work and creativity. But there are many things about starting a business that no one who hasn’t started one can truly understand.
That is why when a new client comes to me and says they just started a new business, I always tell them the same thing. “Congratulations, and my condolences.” I congratulate them because nothing compares to the thrill, freedom, and financial rewards that accompany owning a successful business. I give them my condolences because this new business owner really has no idea what challenges they will face while struggling to build their success story.
The Painful Truth About Starting a New Business
You will receive no pay for two or three years, and you will be underpaid for many years thereafter. When I started my CPA firm, I taught accounting full-time at nights and on weekends for the first year just to have enough money to pay the household bills. During that year, my wife went back to school to get her teaching credentials. Her teaching job paid most of the household bills for the next seven years, and I still taught part-time.
The truth is that when you start your business you will be paying your employees, your vendors, the tax man, and just about everyone but yourself. Your pay comes last, if there is anything left. It took me 12 years to be able to pay myself what I was being paid at the job I quit to start my business.
The main point of this: You will be cash-strapped for a while—so plan for it.
You will never work harder for anyone else than you will for yourself. If you like coming to work at 9 and leaving at 5, don’t start a business. If you like your weekends off, don’t start a business. If you like taking holidays off, don’t start a business. If you like taking a two-week vacation every year, don’t start a business. If you like all of these, you better work for the government, because you won’t get any of these owning a business.
You will be amazed at all the work required to create a product or service, find a customer willing to pay you, deliver the product, collect the money, and the other 27+ items you will need to master in order to run a successful business. I don’t know a single successful business owner who works 40-hour weeks.
The main point of this: If you aren’t willing to work hard, don’t start a business.
Your family will take a backseat to your business—at least in the first few years. Nothing causes problems at home quicker than not having enough money to pay the bills. And it is a rare spouse who appreciates playing second fiddle to the demands of your customers. Don’t underestimate how much strain the demands of a business place on a marriage and your relationships with your children. In the beginning I made sure to drop off our children at school, and they came to the office with me after school until the office closed. But trust me—they will all come to hate your business, no matter how hard you try.
The main point of this: Make sure your spouse understands the challenges you both will face when you start your business. In truth, your whole family is involved in your business in a way that never occurs when you have a job.
You will have hundreds of bosses. Many new business owners started their business because they wanted to be their own boss. Boy, are they in for a surprise! I now have the worst bosses I have ever had. Yes, I said BOSSES. Every one of your customers is your boss. I have over 600 customer-bosses. Your employees are also your bosses. You will have to work to make sure they are paid on time and that they have the direction and tools they need to accomplish their tasks. Your bankers and investors are your bosses. The federal and state tax agencies are your bosses.
The main point of this: Don’t want a boss? Don’t start a business. Go live on a deserted island instead.
You will be emotionally taxed. Business ownership will require all of your mental, physical, and emotional strength if you want to survive. Every weakness you have will surface and threaten to destroy you and your business. Every business that fails did so because of some failure by the business owner. If you are bad with money, you will fail. If you don’t have good people skills, you will fail. If you are shy, you will fail. If you don’t have sales skills, you will fail. If you are too nice, you will fail. If you are too mean, you will fail. And on, and on, and on.
The main point of this: Don’t quit! Most business failures occur when the business owner checks out. Often they are just a few changes away from success when they throw in the towel. You must be able to master your own emotions, know when to ask for help, be flexible enough to change, and never stop learning. Oh, and did I mention—never, ever, ever quit!
Plan for the worst, plan for success, and focus on success. Most new small business owners fail because they just don’t truly understand the challenges they will face. Now that you have been forewarned, make sure to plan, anticipate the problems, and prepare for them. Doing so will greatly increase your odds of success.