Are you growing tired of your nine-to-five and considering starting your own business? What if I told you if you did, you could be looking at a 7 a.m. to 11 p.m. gig or 16+ hour days instead? While launching your own successful small business might seem like the manifestation of the American dream, many times becoming an entrepreneur equates to a pipe dream instead – half of small businesses flop within their very first year!
The media skews our perception of this reality. The startups typically featured in TechCrunch, hosting fancy app launch parties, and throwing celebrity-sponsored yacht parties are usually the ones making it big. But for every five successful startups you hear about, there are 95 somber stories you were never told. That’s right: 95% of new ventures are shut down within their first five years of operation!
Why is it so difficult to start a new business?
10 You’re Not Passionate About the Work
If you don’t believe in your idea 100%, if you have even the slightest amount of doubt, your company is not going to work out. No matter how great your idea is, if you haven’t put your all into your company people will doubt you. Why do you want to start this business? Are you looking to get rich or take on some meaningful cause? If you’re not willing to sacrifice everything from your career to your personal life to support your idea, if you’re not ready to wear your brand on your sleeve for the rest of your life, starting your own business is not worth the risk. In that case, you should consider alternative forms of employment.
9 Competition Is Stiff
Ok, you believe in your idea. But how thoroughly have you researched your market? Have you vetted all your competition? What differentiates your service or product from those of your competitors? If you’re having trouble answering these questions, you don’t need to bother reading any further: you’re not ready to start a business! This doesn’t mean your idea couldn’t work, but it does mean you need to do more research. Once you’re more informed, feel free to come back and read the rest of this article.
8 Putting Together a Good Team Is Difficult
Alright: you have a viable idea. Now what’s it going to take to get the job done? Businesses typically need a website, maybe a mobile app, and a social media presence to begin operating. Businesses also need to develop their products. They might need office space for employees and/or manufacturing. When you start your own business you need to determine if you already have the required technical skills to take your product from inception to market, or if you’ll need to find a co-founder.
TechCrunch published a telling article on this topic last year; the piece discusses David Tisch, co-founder of TechStars NYC, one of the top startup accelerators in the world, and the talk he gave at the University of Pennsylvania. Tisch asked the crowd of the Wharton MBA’s Entrepreneur Club, “How many of you want to start a company?” All 100 attendees raised their hands. Next Tisch said, “Keep your hand up if you are technical.” Only five or six hands remained. Finally, Tisch said, “Keep your hand up if you are looking for co-founders.” Only one hand, that of a CS freshman sitting in the corner, remained raised.
If you’re a non-geek type looking for a technical co-founder, the odds are not in your favor for finding a receptive partner. What makes it even more difficult to find a co-founder is that major tech companies like Google and Facebook incentivize the best software engineers and programmers with 100K+ salaries; for engineers this makes the turbulent waters of a startup look highly unfavorable in comparison.
When starting your company, you’ll have better luck learning to code yourself than waiting for a miracle nerd to show up at your door. Just ask Dennis Crowly, the cofounder of Foursquare: “Pre-Dodgeball [his prior startup] I went through three to four years thinking I was going to meet some magical engineer who would build all the stuff I was thinking about.”
7 Getting Funding
If you can’t gather a team fast enough, that doesn’t mean you should sit around forever. It’s cheap to buy a domain name, Web server, and to start your company’s social media presence to target people that may be interested in your potential idea. The bottom line, though, is that to develop your business you’ll either need in-house employees or outsourced labor. Which then brings up the issue of finances. Do you have enough capital stored away to fund your business? If you’re looking to outsource your development to the lowest bidders, good luck ever building a quality product. And what if your business isn’t making any revenue for some time: how long can you sustain without bringing in a profit? In that case, is your business something you could do part-time until it gets going? And if you’re looking toward bank loans, again, good luck. 80% of startups are self-funded, and the 20% fortunate enough to get funding did so through a loan from a family member, a bank loan, or outside investors.
6 Lack of Organization
Alright. Let’s say you could put a good team together with the proper funding to sustain your business for a while. But how organized are you? Even if you’re a pro at multitasking online, you may not be prepared for the attention your business will constantly demand from you. This is why it’s often said that CEO stands for “chief email officer,” and CEOs often feel drained by the constant messaging; it can feel like simply checking your email while trying to attempt other creative tasks lowers your IQ by 10 points. So how much productivity and mental capacity are you going to have left after replying to endless, important emails, answering phone calls for clients, managing employees, and more, all the while trying to accomplish more critical tasks for your business?
5 Employees, Clients, Products, Stress – and More Stress
Wouldn’t it be great to have a few employees do some of your bidding throughout the day? But employees need to be trained, managed, and compensated. Furthermore, 43% of employees are stressed out by a heavy workload (even more so at smaller startups), and a similar number are dissatisfied with their salaries and lack of opportunities for growth. As the level of stress continues to elevate in your working atmosphere, this could eventually start to heavily weigh on you and your health. The cost of unhappy employees to your business could be severe, too, contributing to a drop in productivity, rising costs, and even leading people to quit on you. If you’re going to manage employees and clients, you better become an amateur psychologist to best deal with the vast personality types of people that make up your workforce.
At least you don’t have any bosses to answer to, right? Wrong! Sure, you don’t have a boss: you have “bosses” in the plural, maybe thousands of them. You business’s customers and users have become your new bosses! If you don’t listen to them and please them, your business will fail. As your workload and stress pile up during your endless hours spent sitting at your desk, you become at risk for four of the top seven killers in the U.S.: heart disease, stroke, diabetes, and some types of cancer.
4 You’ll Become an Asshole
You’re still reading this, which means you can put up with the stress. But can you live with becoming an asshole, too? Now that you are running a business you’ll have to make tough decisions each day which can include firing people and sometimes throwing “nice” out the window. Depending on your business model, your profitability may be at constant odds with the moral thing to do, like when publishers, for example, post hyperbolic headlines to generate more hits to stay afloat. Another part of starting your own business is to bombard your friends and colleagues with pushes for your products or services in order to gain traction. And what about making cutthroat decisions that may improve your business but not work toward the greater good, like when Facebook blocked Vine users from searching for Facebook contacts, or when Instagram cut off Twitter card support so Instagrams don’t appear in tweets anymore? If you’re not ready to walk down a potentially lonely road of unpopularity, you have no business starting a company!
3 Kiss Your Me-Time Goodbye
If you started your own business you’d get to set your own hours, take a vacation whenever you like. Life would be grand, right? Not so. In reality, the only breaks you’ll get to take are when your computer freezes or Chrome crashes. Sadly, during these times you won’t really be in a state of relaxation but rather an enraged anger potentially leading you to break the keyboard in two over your head. Once you start your business, you may never actually be able to take an entire day off for years! This is because any day you do call in sick, you’ll probably be setting the company back at least a week. When it comes to running a startup into profitability, though, there is no time to spare!
In fact, there isn’t really enough time in the day for all that needs to be accomplished. So if you want vacation time, this is not the job for you.
2 Your Most Valiant Attempt May Be Futile
So you have a solid idea, and you’re aware of the many risk factors. But can you live with the fact that you are very likely going to fail? As I said earlier, 50% of startups go under in their first year, and 95% within their first five. What will become of you if you don’t succeed? Do you have a family to support or are you already struggling to make ends meet? If this is the case, you might be better off looking at new job opportunities to lock in a stable income until you can save enough to minimize the risk factors.
Even if you can live with failure in pursuit of your dreams, would your family and loved ones be accepting? And don’t forget that when you do fail, you’ll have to assimilate right back into the nine-to-five you hated to begin with, but this time starting from the bottom again.
1 Your Relationship(s) Will Suffer
So you’re a creative, hard working, persistent, driven, focused, and ambitious person: these are desirable traits, right? Who wouldn’t want to be with someone who was passionate, works hard, is driven to succeed, and has an untamed curiosity? These positive traits are often paired with these negative ones: relentless, controlling, stubborn, unbalanced, dreamer, and even quirky. Many of the same qualities that enable you to run a business, can potentially be your social downfall, too. Entrepreneurs have an infamous high divorce rate because working 16+ hour days doesn’t leave a lot of time for loved ones. Are you ready to sacrifice your relationship or marriage for your new business knowing your idea has nearly a 100% chance of failing? Are you willing to spend countless nights alone in pursuit of your dreams? Even if the long hours and negative personality traits don’t take your relationship down, the financial stress associated with starting your own business can put a lot of strain on any relationship.
Starting a successful business often times means you need to think differently and come up with an idea that no one has ever carried out before. Unfortunately, this might be easier done in solitude than while in a relationship.
If you’ve made it this far, and can live with these ten realities, congratulations: you are ready to start a business! If you soak up anything from this article though, I hope it’s this: if you start your own business, prepare to work harder and longer than you ever have in your life while knowing your business might not succeed in the end! As someone who started a business several years ago and has yet to “make it,” someone who’s still fighting for profitability and sanity, you might wonder: if I had a chance to do this all over again, would I?
Sure, but I’m a sick sick person, tapped into the vein of the 24/7 digital stream of media. In some ways I’m similar to many of you orphans of the American Dream, gamblers turned entrepreneurs, infected with overzealous ambition and desire to one day bring change to this world and help as many people online as possible. Like I said, to start your own business it’s essential that you fully believe in your cause; if you don’t, why potentially throw away your life for your idea?