There’s nothing easy about starting your own business. Entrepreneurship requires taking on risk at a level that would terrify most people. You might have to work longer hours than you ever did as an employee. You carry the stress that comes with being the final decision maker on every question that arises. The rewards, however, are immense. Be your own boss. Build something from the ground up. This endeavor feels unmistakably American, and it brings a sense of pride that is difficult to match punching a timecard and working to further somebody else’s goals.
Today we’ll discuss a few of the challenges that confront entrepreneurs as they make the leap into running their new business full time. We address these difficulties not to discourage people considering starting a company, but to warn them of some common hurdles so that they might overcome them with the benefit of our experience.
Initial Lack of Resources
Many first time business owners struggle with capital as they try to get off the ground. Even with investors, money is a stressor at this point in the process. Don’t let self-doubt creep in. No business can expect to be profitable on day one, and many take several years to break even. Preempt this problem by going in with a specific plan. Although surprises always change budgets, you should have a breakeven analysis in place. Know your costs and understand how much revenue you need. Otherwise, the first few months will be an emotional rollercoaster, with panic or elation taking hold every time the bank account changes. Expect bad days, expect to keep a tight grip on your spending at first, and hang in there.
Coping with an Unpredictable Income
As your company goes through its early volatility, you may take a vastly different amount of money home each month. Depending on the nature of your business, this may never change. Even if you are making plenty each year, some months may be tight. Be intentional with your personal budget. Resist the urge to overspend after a prosperous period. There are resources available for people with unpredictable incomes, like this Forbes article. Remember that this situation isn’t unique to you, or even to entrepreneurs. Consult salesmen who are paid commission or experienced business owners for advice about how to handle your personal finances so they don’t become a distraction or a stressor as you guide your company to success.
Wearing so many New Hats
Entrepreneurs quickly become their company’s, well, everything. My mother liked to refer to herself as the chief cook and bottle washer at an independent coffee shop she ran for several years. Her experience was a common one. Before you’re big enough to pay specialized employees, you handle an astonishingly diverse array of duties. You may not have an MBA, but you’ll find yourself worrying about marketing, accounting, HR, and an endless list of concerns specific to your industry. Our best advice here is to seek out free help from friends and family (without taking advantage). Buy your uncle lunch and pick his brain about how he kept customers coming back during his career as a salesman. Ask your college roommate to give you a few pointers about maximizing your company’s searchability. And when you are making enough money, hire people whose strengths align with your limitations.
Trusting Employees with “Your Baby”
When you are able to hire these first employees, you may have trouble relinquishing control. You’ve built your business from nothing, and giving up even small decisions can be scary. Still, you wouldn’t have hired these people unless you needed their help and they were qualified to help. Balance keeping the company moving in the direction you want with giving your people the latitude to do their jobs. Nothing can kill employee morale like a micromanaging boss. As in so many aspects of business and life, communication is key. Set clear expectations up front. This should cover not only quality of work but also decision making authority. Be available for questions. I once had a boss who had unreasonably specific expectations but was unreachable most of the day. Don’t let your employees feel like they can’t figure out how to please you. Equip them to be capable of what you need from them.
We commend anyone who makes the gutsy decision to start a business. The process can be daunting, but remember to seek advice and encouragement from the successful people in your life. Most of the challenges you’ll face have already been overcome by someone you know.