Starting Your Own Business Part I: 12 Problems
This will be a two-part article on starting your own business. Part one will be reasons excuses not to start your own business right now. In part two, I’ll address these with solutions. Read part 2 >
Before I go on, I’ll offer a disclaimer: I’ve been running my own business for about two years. I don’t have all the answers. I still learn hard lessons. But I still have a fire in me for building my own business, taking risks, and trying to kick ass.
Why You Shouldn’t Start Your Own Business
1. You don’t have enough startup capital. Starting a business takes money. There are filing fees. Accountants. Lawyers. Press releases. Equipment. Software. Advertising. Office space. Materials. Employees. According to the Global Entrepreneurship Monitor, the average amount of startup capital used by small businesses in industrialized countries is currently $53,000. (Source). Where are you going to get that kind of cash?
Chances are, there are ten (maybe ten-thousand) other companies that do exactly what you do and have been around longer. What can you do to be heard through all that noise?
2. You’re too busy. You’re probably in that group that’s working nearly 50 hours a week. Starting a business takes a lot of time. Not only do you have to do your own work, but you have the rest of life to deal with. How can you possibly dedicate the hours needed to get a fledgling business off the ground?
3. You don’t have a good idea. You’re still waiting for the billion dollar idea. The one that everyone says, “I wish I’d thought of that.” Until then, you need to keep your eye out for that big opportunity of a lifetime.
4. You can’t compete. Chances are, there are ten (maybe ten-thousand) other companies that do exactly what you do and have been around longer. In 2004, there were 24.7 million businesses. What can you do to be heard through all that noise? (source)
5. You couldn’t handle the failure. â€œAccording to the SBA, over 50% of small businesses fail in the first year and 95% fail within the first five years.â€ (source) What makes you think you can do it? It’s stressful enough just starting a business; failing at it would just about crush you.
Think you can explain to the kids why you couldn’t buy them birthday presents?
6. You have too many other commitments. What happens if you don’t succeed right away? Can you pay your mortgage? How about feed your family? Think you can explain to the kids why you couldn’t buy them birthday presents?
7. You need benefits. Health insurance is expensive. Really expensive. â€œOn average, health insurance for a family cost $10,880 this year, with the employer paying $8,167 and the worker $2,713…â€ (source) Have you factored that into your budget? Want to top it off with dental, eye, and life insurance? And don’t even think about a retirement plan.
8. You’re in a bad location. Some places in this world just aren’t conducive to owning a business. There’s not enough of a market. Not enough disposable income. For some industries, you can’t really succeed unless you’re in the perfect area – like Silicon Valley. There’s no way a startup in Lowville, NY will get anyone’s attention.
9. You’re just not an entrepreneur. Face it. Some people just don’t have it. There’s a reason you’re not a CEO. That entreprenurial streak that turns 26-year-olds into multi-millionaires? That’s not you and it never will be.
What do you think your mortgage company will say when you tell them business is slow?
10. It’s not reliable enough. There are days when sales aren’t great. Weeks when you’ve got nothing to do. Months where you can’t pay your bills. What do you think your mortgage company will say when you tell them business is slow?
11. You don’t know where to start. There are tons of things you need to know to run a successful business. Accounting practices. How to make a pitch (and close a deal). Where to order inventory. How to file quarterly returns. Heck, you spend more time running your business than you do actually working. Where do you think you’re going to learn all that stuff (and still get your work done)?
12. It’s just too hard. If there’s one thing you’ve learned from this article, it’s that starting a small business is hard work. Really hard. It takes a lot of money, a lot of time, and a lot of stubborn indifference to the rest of your life. And remember, you’re almost certainly going to fail. It’s much easierâ€”and reliableâ€”to stick with your job and get that paycheck. It can’t be all that bad, right?
So why bother?
This was fun to write. These are things I thought about before I started my business. In my first year of working for myself, they came back to me tenfold. Not only that, but these are the same objections I hear from people who have considered starting their own businesses. Even more fun will be the follow-up.
Update: Part II: 12 Solutions.