A lot of people start businesses for the wrong reasons. They are fed up with the boss and think they can do better on their own. They want the flexibility of running their own show and don’t want to be chained to a desk. They see the people who make millions on one big idea and think “Hey, I can do that!” Regardless of the reason, if you’re starting up a business you must be prepared to be accountable for any outcome.
A business owner expecting a handout, waiting for a contribution, or hoping for the next big deal is going to have a tough time getting ahead. But a business owner who operates on passion, smarts and a can-do attitude is one that will ultimately win. In the beginning, business pitfalls are common and there are four which are likely to plague any business that’s starting from the ground up. If you can avoid or overcome these, you’ll be setting yourself up for success.
1. Underestimating the length of time and money required to get your business going
Do your homework, talk to an advisor, and constantly factor in the “worst case scenario”. If you build a business plan based on everything going exactly the way it should, you’re more than likely setting yourself up for failure. It might not be the most optimistic mentality, but it’s the most realistic.
2. Risking everything without having adequate protection if things turned for the worse
Starting a business is exciting, and it’s easy to lose sight of what might happen if things don’t work out exactly as planned. Make sure you have the proper insurance in place, and consider putting some money aside that will support you in the event that the business folds.
3. Jumping the gun and getting locked into expensive assets
The greatest expense for a business is usually the lease on a premise. But jumping into a multi-year commitment on an office or retail space before the business has taken off can be a real risk. Don’t get lured into leasing a fancy office or buying bulk stock at a discount rate until you’re sure your business is both stable and profitable. The last thing you want is to be stuck with assets you can’t use.
4. Thinking too small and effectively “buying a job”
It’s all too common for people to invest their hard earned dollars into starting a business and then getting stuck paying bills, chasing invoices, and doing admin. As a business owner, you have to stick to the plan and make sure you have someone there to challenge you and ask the tough questions.
This advice might seem harsh, but it’s a merely a snapshot of the perils that nearly every small business owner faces. Having a business means you have to be thick skinned, have realistic expectations, and be ready to take some hits when the going gets tough. If there is one thing I have learned as a business builder it’s that there is no such thing as a free ride, or an easy one for that matter. That’s why there is nothing more valuable than having an advisor who has been through it before and can offer advice when big decisions are on the line. Being a business owner can be immensely rewarding, so long as you’re practical in your planning, dedicated to the success of your business and willing to put in the hard yards in order to see the tough times through If you have that on lock, you’re already well on your way.