My parents haven’t worked for anyone since the 1970s; they consciously decided to be entrepreneurs. Although they have been successful, it’s important to recognize and accept that everyone is not designed nor equipped to start a business.
Entrepreneurialism can be wonderful because you’re implementing a vision, you have control over how much money you can make, and the opportunity to affect future generations’ wealth building opportunities is in your hands. There are many financial pitfalls to starting and running a business though; below are seven:
Upfront costs. The Small Business Administration averages business start up costs to be approximately $30,000. You must be prepared to spend that along with your current living expenses.
Be prepared to lose money. While there are certainly businesses that generate revenue immediately, many take years to recoup the investment. Factor that into your personal finances and business’ growth.
Time. As a business’ cultivation is nonstop during the first few years, you will spend far more than 40 hours per week working on it. Time is money, both of which you are spending towards your dream. This alone halts people from starting a business, especially when they have a family.
Closed doors. People are typically averse to change, so convincing someone to leave what they know for something new, is tough. Small businesses are the cornerstone of this country though, so what has been done before can be done again.
Your niche. Very little is new these days, but doing the same thing in a new and unique way will determine your success. Research, research, research; remain a student. You grow by learning from others and staying on top of your industry.
Change with the times. Do not remain stuck in one method or tactic. In recent years, a hair stylist has had to evolve her business to include eyelashes and brows, weaves, nails, braiding, natural hair, etc.
Have a cut-off. Many entrepreneurs are so committed to their vision they’ll spend their last dollar making it come true; it isn’t worth it. Calculated risks are key, so determine up front how much your family can lose before it buckles under the weight of the business.
Finally, be true to yourself. Although you must change with the times, if you don’t deviate from your core principles and recognize the benefits and costs, you will succeed. And if you don’t, don’t beat yourself up; what is for you may not be for you right now. If this is your dream though, it is worth pursuing.
There you have it. Remember, insight without action is worthless.