Editor's note: This is a guest post by Ally T of Australian Credit Cards
HAVE YOU noticed that lately, everyone seems to be starting their own business? It's like an entrepreneurial fad - a bandwagon that everyone wants to jump on.
And while starting a business is the right thing for some people, to be honest, it's not right for everyone. Many people simply don't have what it takes to become successful in business and it will only disappoint and potentially damage them financially if they're not the right type of person. Here are 8 reasons that starting your own business may not be the right thing for you...
1. It's damn hard
2. You will not get rich quick
3. You may not make any money for a long time
4. You won't necessarily make money just from doing the things you enjoy
5. In today's global economy, you face global competition
6. You're still not really your own boss - your customers are
7. It will consume most, if not all, of your time
8. It's lonely
1. It's Damn Hard
Although it's great that a lot of DIY business literature is available these days, unfortunately they make it look a lot easier than it is. You won't make a buck out of your own business without putting in a whole lot of effort and, dare we say it, strain. Strain on your energy, strain on your emotional stamina, strain on your personal finances, strain on your time, strain on your relationships. Don't be fooled by anyone who says that having our own business is easy - it is not. It is damn hard. Worthwhile for those who succeed, but still, damn hard.
2. You Will Not Get Rich Quick
Anyone who gets into business hoping to get rich quick should get out again right now. Building a business is a long-term project, and the returns will be long-term - not short-term. If you want short-term money, win the lottery - don't attempt to get rich quick from a business. Successful businesses stand on the foundation of thorough research, market understanding, building a customer base and top-notch customer service, as well as business skills such as adaptability and the willingness to change according to customer demand. The person who wants a business to make them rich quick will be sorely disappointed.
3. You May Not Make Any Money for a Long Time
This is a hard truth, but it's a truth all the same. When you go into business, you have to view it as an investment. And like most investments, you don't see a return straight away. Many businesses you see, and even frequent today are still only at the breaking-even stage. It takes a lot of oomph to take a business idea from nothing to breaking-even, and then on to profit. Even though you may be able to see your business cover its costs in the short-medium term, you shouldn't expect to see any real profits until the long-term. Think hard before you get into business unless you know you can cover your own personal finances in some other way during that time where your business makes you no profit.
4. You Won't Necessarily Make Money Just From Doing the Things You Enjoy
You may have the coolest hobby, passion or dream, but if nobody wants to buy it, then you haven't got a business. Just because you enjoy something doesn't mean that other people will want to buy it from your business, or buy enough of it for you to make a good turnover. Many new appealing businesses are born with a flourish and die quietly without so much as a bang (they usually go bust) - businesses started by someone who says to themselves, "Gee, I really always wanted to run a toy train shop," puts down all their savings for the capital, and then can't get enough customers through the doors to even cover the initial start up costs. Very sad and very common. Don't let it happen to you. Successful businesses have to have customer satisfaction and profits at the forefront of their minds - not their closely-held personal dreams.
5. In Today's Global Economy, You Face Global Competition
No longer can you simply start up a vitamins store in your small-town city center and know that you'll be guaranteed local customers. Local customers are becoming less and less "fixed in stone" as more people shop online and by phone. Think about it. How many times have you skipped the local shop because you knew you could get something cheaper or faster or easier online or from a bigger store out-of-town? In today's global economy, you face global competition, so your business idea, if it is to succeed, had better be an especially good one. There simply aren't as many low-competition niches left out there.
6. You're Still Not Really Your Own Boss - Your Customers Are
A lot of people get into business because the idea of being their own boss appeals to them. Maybe they are tired of working for a boss that they hate. This is totally understandable. But don't fall in the trap of thinking that working for yourself with mean you are now your own boss. Your work movements and methods will still be dictated to a large extent - not by your supervisor, but by your customers. Customers ARE your business, so in effect, your new boss will be your customers. You're still in charge, but it doesn't mean that you can simply do whatever you like all the time. Also keep in mind that a business will… consume most, if not all, of your free time.
7. It Will Consume Most, If Not All, of Your Free Time
A business can be like a money on your back. It may not be the right thing for you if you're after a low-maintenance way to make better money. Building a business is a lengthy and slow process. You will spend a lot of time on a business, so if you're doing it to make money so you can spend more free time with your family and friends, then maybe you'd be better off devoting an hour or two extra per week to overtime so that you can spend a little more on the weekends. Don't expect running a business to leave you with MORE time than you had when you were an employee!
8. Your Family and Friends Will Get Sick of Hearing About It (you might get lonely)
It's inevitable that while someone is building their business, their family and friends grow tired of listening to them talk about their next business move. Because running and business takes so much time and energy, your family, especially your spouse and kids if you have them, will get sick of hearing about it all. This doesn't mean that you're going to end up with a divorce, but keep in mind that it does happen. Many people decide not to enter the business realm for this reason alone - it's high stress and that stress can't help but rub off on your family.
As you can see, the entrepreneurial fad is an interesting one but it may not be right for you, at this time, to start a business. Consider that if the reason you were thinking of starting a business was because you wanted to make money, you may wish to brainstorm easier and faster methods of return on any capital you already have. What about working an extra hour a week to add to your income stream, or try a mutual fund or term deposit.
If your reason for wanting to run a business is that you have a fond hobby or passion, then maybe you could stick to your day job and engage in volunteer work or take a mini-retirement holiday occasionally, doing the things that you love. All these things will cost you less time, money, and stress than starting your own business.
Ally is part of the team that manages Australian Credit Cards, a free small business credit cards comparison service in Australia. You can follow ACC on Twitter if you like to stay updated on their latest contents. Before joining ACC, Ally was a Media Planner with McCann Worldgroup Philippines, Inc., with award-winning executions, including the Levi's 501 "Live Unbuttoned" global campaign.
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