Today I'd like to discuss some of the hard realities of being a small business owner. These are things that are often overlooked and not discussed among business professionals, even though they are challenges every small business owner faces. I'd like for you to be aware of these challenges before you invest time and money into a business adventure so you can make sure your business idea is right for you.
So, wondering if you have what it takes to be a small business owner? Wondering if being a small business owner will be a good fit for you and your family? Here's some things to consider before taking the leap and starting your own business:
The Reality of Being a Small Business Owner – 17 Things to Consider:
Profit doesn't happen overnight (usually)
This is huge one most people overlook when starting a business. Most business owners don't start seeing a profit on their business adventures until about 1-2 years after starting. This is mainly because of a few reasons, including the fact that it takes time to create the infrastructure of your business, your investment takes a while to be paid off through your business sales and sometime you might make financial mistakes along the way which will cost you money and profit.
Starting a Business takes time and (a ton) of effort
I can very much attest to this one! When I was starting my first successful business, I generally worked about 12 hours a day 6-7 days a week (I know, that sounds crazy right?!). The honest truth was that I was super excited about my business and really enjoyed dedicating everything I could to making it grow as fast as possible. It takes a lot of time to decide which fonts to use for your product packaging, making contacts with the right people, and getting people to know about your business in general. My mantra was “If you build it, they will come” and eventually my hard work paid off and I was very glad I had the dedication I did!
You Don't Have an Income Unless You Work
Because you are your own boss when you are a small business owner, the harsh reality is that you don't have an income unless you are putting in the time and energy to earn the income. Over time you will hopefully be able to afford to hire employees, but in the beginning it's most likely going to just be your blood, sweat and (hopefully not too many) tears. You won't be able to count on a bi-weekly paycheck to get you through the month. This is one of the reasons many first time small business owners have a second job. Their secondary income gets them through until their small business starts profiting.
Your Business Doesn't Function Unless You Make it Function
This is so true! You are the only one behind the wheel steering the ship! If you aren't there to guide your business then you might crash into an iceberg. You'll need to dedicate as many hours in the day to get your small business off the ground and fully functioning, or else you might hit troubled waters.
You are solely responsible for everything that happens in your business
As a business owner you will be solely responsible for everything that happens (and doesn't happen) in your business. Orders don't go out? Your fault. Products don't get made? Your fault. Emails don't get responded to? Should I say it again?
It's so important to recognize this idea because it takes a lot of guts and gusto to be a small business owner. This is why everyone doesn't just quit their jobs and work for themselves. As a small business owner it will be your responsibility to make sure the house doesn't crumble.
You have to make every decision yourself
Until you are able to have a team or a partner, it will be on you to make every single decision yourself. Yes, you can ask your friends, family and guidance councilors for input on major decisions (and you really should!) but in the end all decisions will be left up to you. This means you'll have to be able to make some tough choices, most often financial and strategic, which could either lead your business into greatness, or (hopefully not) into failure. Unfortunately, there's often a fine line between the two so you'll want to hone your intuition skills here ladies.
You probably won't have guidance in your daily business activities
When you work for someone else most often they will be telling you what to do, when to do it, how to do it and where to put it. When you are a business owner there will be NO ONE telling you anything. This is hard for some people to adjust to, but I believe in you and if you believe in yourself, you'll adjust. This is why being a small business owner is only suggested for the go-getters and the do-ers. If you enjoy being told what to do all the time then you might want to reconsider being a business owner.
If your business fails, there goes your income
This is probably one of the hardest lessons to learn in owning a small business. If you fail, there goes your income. And your investments (including time and money). Hopefully though, you will have done your research before investing either and failure won't be something that happens often in your business. Failures can be big or small, and hopefully all your failures will be small and easily fixable.
Your business won't grow until you make it grow
Once you've gotten your business is off the ground and you are starting to see a little bit of profit, you're going to want to see that profit keep growing so you feel like all the time you put into starting the business was actually worth it. This is where the reality that just starting the business isn't the hardest part. Actually maintaining the business, growing your presence and continuing to offer trustworthy service or products is the most challenging part of being a small business owner. And, that burden falls solely on your shoulders. Thankfully, if you've started a business you are passionate about maintaining this will be easy!
You are the face of your business, your reputation follows your business
This is where its important to remember that saying you heard as a child “Always put your best foot forward.” This includes when you're at the grocery store, the eye doctor and picking your children up from school. People will begin to associate you with your business, which means the success of your business partly relies on being a good citizen. So, make sure you're being a good girl when you're out in public! The last thing you want is your community deciding you're not a trustworthy person and calling you out on social media or in the newspaper. Your business could be affected!
It's your job to make sure people like your business
As a small business owner it will be your job to make sure that people like your business and want to keep coming back for your products or services. Unlike being an employee where it might not have been so important to you to make a good impression on customers, it's now one of your TOP priorities and your sole responsibility!
Paying Estimated Taxes
When your business has been established for over a year and you are starting to see a trending profit, you will be responsible for paying estimated taxes on your business income. This means you will have to make sure you
are saving a big percentage of your profits and paying taxes to the government quarterly. When you are an employee this isn't something you have to worry about because taxes are taken out of your paycheck every month. However, as a small business owner, you will be required to remember to pay your taxes every few months, not just at tax time.
Your income is not guaranteed
As a small business owner you will most likely have some super excellent booming months….and then some months where all you can hear is crickets. You will however be required to still keep putting in the same amount of effort no matter what. This means your income is not guaranteed and you should expect it to fluctuate throughout the year.
However, as your business continues on throughout the years you will begin to see “seasons” where you can expect higher volume in sales and lower volume in sales. This will allow you to save for the slower months and give you insight as to when you can expect to be busier during the booming months.
Your success is not guaranteed
Your success is often dependent on the amount of effort you put into your business. However, this statement also needs to include the fact that you should be putting in calculated efforts, not just any type of effort. And, being a business owner, this also means your success, despite your calculated efforts, is not guaranteed. This is usually one of the hardest pills to swallow as a small business owner.
Business Loans are yours to bear
When you take on business debt as a small business owner, any debt you obtain is usually in your name alone. This means if your business never sees a profit, you'll have to figure out a way to pay off those debts by other means than your business. However, business debt is a great driving force in giving you the will to do whatever it takes to succeed! Seeing that debt in your name will definitely encourage you to create more products, invest extra time in marketing your brand to the public, and generally be more involved in your business.
Potential Bankruptcy and/or Lawsuits
Now, talk about buzzkill. These are my least favorite words in business: Bankruptcy and Lawsuits. Thankfully, these can be avoided with careful checks and balances of your business, obtaining the proper insurance, and by always offering the highest level of service and products you are able to. This will help you avoid an accident on your property or someone getting sick from your wedding cakes.
I wrote this post so you could have a realistic view of the responsibilities it takes to be a small business owner. If you were able to get through this entire list of 17 Reasons and you still feel confident in your small business idea…
…Then please give yourself a BIG pat on the back! This means you really have what it takes to be a small business owner and I commend you! It really takes balls (or lady balls!) to start a business on your own which means you are one TOUGH COOKIE and I have great faith in your success! How exciting for you!!
Check out my other post “How to Know if Your Business Idea is a Winner” for tips on figuring out if your business idea will be successful before you invest time and money in your business adventure!