So, you’ve decided to quit your job and head out on your own to start a new business. Great! Before you rent that new office space and hang out your shingle, it’s important to remember one thing: starting a business from scratch is hard, VERY HARD! Here are a few reasons why:
Reason #1: Competition
No matter what your industry is and what product or service you’ve chosen to sell, you’ll be competing with multiple other companies who have been in business longer, have more resources and have a proven track record of success. You’ll have to find a way to differentiate yourself from the competition to have any chance at success. Unfortunately, that’s not as easy as it sounds.
Reason #2: Lifestyle
The entrepreneur lifestyle seems glamorous to those on the outside looking in. Set your own hours and answer only to yourself? Seems perfect, right? Except when you’re an entrepreneur out there on your own, every hour of every day turns into “work” time. Also, you’ll quickly find out that you do answer to someone else: your customers. And customers can be just as demanding, sometimes more so, than even the toughest boss. Most new entrepreneurs find themselves with less personal time and more stress. Feelings of being alone with no support are common, and personal relationships can suffer.
Reason #3: Start-up costs
In addition to whatever start-up costs you have budgeted for your business, you should also have a contingency fund to cover unexpected costs. Because there are ALWAYS unexpected costs. You’ll be surprised how fast things start to add up too, like that extra insurance you didn’t know that you needed or the additional marketing you have to do to bring in new clients. While these costs may seem trivial, they can be cause for a lot of stress when you’re building your business from scratch with no safety net.
Reason #4: Building a team
Everyone’s heard the phrase, “good help is hard to find,” and it is certainly true in business. Whether or not you’ll be hiring employees right away, you’ll still need to build a team of professionals to support your business, like an IT consultant, an accountant and an attorney. Finding professionals who are a good fit for you and your business can be a real challenge. And if you are hiring employees, the challenge increases immensely, as you’ll have to find good people and train them yourself, while you’re still working to manage and grow your business.
For these reasons, some entrepreneurs have found that buying an established business or a franchise opportunity is a better way to go. While this option doesn’t completely eliminate the risk of venturing out on your own, it does increase the potential for success. Buying into an established business allows you to capitalize on the success of the existing business, rather than trying to prove a new model completely on your own. This is an especially great option for people who have never owned their own business before, or for people who are tired of doing everything on their own and want a support system without going back to a traditional job.