I am often asked “Should I start my own business?” and my stock answer is usually “NO!”
The main reason that I say no is that if you are asking the question, there is clearly some doubt, which means that you are not certain that the benefits are going to outweigh the negatives.
There’s a saying that goes something like “Don’t buy a tiger and complain that it bites you!”.
If you are going to start your own business, you need to understand that there are many risks to take, a lot of pain, heartache and negatives along the way and statistically, there is a 95% chance your business will fail.
Don’t shoot the messenger.
Ignoring yesterdays amazing (not) budget for SMEs, here are the main reasons why one might consider avoiding or delaying starting their own business.
Financial risk: Starting a business often requires a significant financial investment. There’s a risk of dipping into personal savings or taking on debt without a guaranteed return unless you are either patient enough to boot-strap or are fortunate enough to have wealthy people around you.
Time commitment: Running a business demands extensive time and effort, potentially affecting your lifestyle (I dislike the term work-life balance). It might mean working long hours, weekends and in holidays, especially in the initial stages, which will put a strain on your relationships with friends and family.
Uncertainty and stress: The uncertainty of success and where to find it can be stressful. Financial instability, market fluctuations, and unexpected challenges can take a toll on your mental health and cause you to question if you have done the right thing.
Responsibility and pressure: Being the owner means being accountable for everything. It can be overwhelming to handle multiple responsibilities such as finances, operations, marketing, and employees and it is unlikely that you are good at all of them. These responsibilities often stop you doing what you love and what you set the business up to do and you can lose your mojo.
Lack of security and benefits: Being an entrepreneur often means a lack the stability and benefits offered by traditional employment, such as a consistent salary, health insurance, or retirement plans. Are you happy with having your safety net removed?
Market competition: Depending on the industry, entering a market saturated with competitors can make it difficult to establish a foothold and succeed. Most don’t have something unique (or cannot articulate it) and therefore finish up selling the wrong things, to customers they’d prefer not to work with at prices that are too low.
Regulatory and legal challenges: Navigating business laws, regulations, permits, and taxes can be complex and time-consuming, especially for someone without prior experience. Can you be bothered or do you ignore it like many do, and hope for the best?
Impact on personal life: Starting a business can strain personal relationships due to time commitments and stress, impacting family and social life. You can probably forget your hobbies, especially the gym and kiss goodbye to a good night’s sleep for a while.
Failure Rate: 58% of businesses fail before the five year mark and ultimately 95% fail. With this potentially comes financial challenges as well as the emotional ones.
While these are valid concerns that I share with those wanting to start a business, I share them with the sole intention of opening their eyes to the brutal reality.
On the flip side, if somebody has weighed up the risks and is still prepared to go for it, then entrepreneurship can also bring immense fulfilment, autonomy, financial success and choice for those willing to take on the challenges.
Each person’s circumstances and risk tolerance will influence their decision regarding starting a business.
If they choose to become self-employed after doing their due diligence, I will back and support them 100% to help them succeed.
But remember “Don’t buy a tiger and complain that it bites you!”.
Do you recognise these common challenges of the self-employed? Did you ever wonder if you’d done the right thing by going alone?