Running a business is difficult, any business. Bloggers and others on the Internet like to talk number of employees, meetings, growth rates, and funding. Skipping over many of the things that drive people back into the general workforce, taking a weekly check. Want to start a business? Prepare to look forward to the following
1. Not having nearly as much money as everyone thinks. People see your assets, things you borrowed to get and assume you have a lot more liquid cash than you really do. They don’t realize that most of what you own is sitting right there in front of them and your road to cash is to either sell it or wait until it’s paid off.
2. Insurance and payroll taxes add up. A person will say they have XXX employees but all of them are W-9d . In my opinion those are not real employees. They are people that will leave at the drop of a hat if they get more money somewhere else. Dealing with insurance and payroll taxes is a pain but it’s the price of retaining good people to build your company around. W-9 people are mercenaries, W-2 are your army.
3. You can’t show off. My grandfather always told me that it was important to drive a junk car into work every day. It keeps people from asking for a raise. It’s true. When you finally turn the corner and have the finances to buy nice things you better make sure you are prepared to give your employees a bump as well. Nothing kills morale faster than pulling up in your Porsche while half your employees are grossly underpaid for their efforts. Many people love being part of a journey to success. Part of the company’s drive to success. You have to be very careful on what you do with that financial success when you get it.
4. Making less than everyone at the company the first few years. If you are the kind of person that has trouble being surrounded by people that make a lot more than you and do less work, then you will not want to start a business.
5. Your family is going to be mad at you periodically. Even if they say they support you. A spouse will eventually yell at you for not helping around the house. It’s inevitable. You are going to work nights and weekends when you should be home. You are going to forget to do things that you agreed to do because you got preoccupied at work.
6. You will do things because you don’t want to pay someone else. When starting a business or even later, you will do things at work that you could pay someone else to do and go home but you won’t. You’ll stay there and do it yourself. Often not as well as the hired person. All in an attempt to keep a little money in your pocket
7. You will learn that getting money is not as easy as it appears on TechCrunch. Every day you read about some new company getting a new series of funding. That is a VERY small minority of companies that get this easy money. It probably won’t be you. Most of us have to have some capital to borrow against. You could have been extremely profitable for 10 years straight and most banks could care less. They can’t sell the past. They only care about the present and they want to know if sales grind to a halt how are you going to pay them back. They want to have something to sell. Banks don’t fund ideas. The only traction they care about is the traction on the tractor you put up as collateral.
8. Your profits will most likely go into expansion. You’ll probably be like me and say that next year you’ll take a little money out but in reality the end of year will come and you will see an opportunity to invest in something that will result in even more profits.
9. In public you have to show confidence without being stubborn. There is nothing wrong with conviction as long as it’s flexible enough to let your realize when you’re doing something wrong. Failure is part of growing. You can’t dwell on the success of the past and use it as an excuse not to continue innovation and change.
10. Leadership must be present. Your corporate culture is defined by the owner. A company needs checks and balances, a driving force, examples set, and without you there on a constant basis you are letting someone else define it. If you put in the hours necessary then see 5.
11. An owner DOES make his own hours but unfortunately they suck during the building of the business. It sounds like we have a lot of free time because we constantly talk about the things we do when we have it. I don’t particularly like talking shop once I’m home after 12-14 hours so you’ll find me talking about everything but, making it sound like I actually had a lot of free time.
While I seem to mention the negatives, in my opinion, they are a small price to pay for the opportunity to choose your own destiny. To reap the rewards of your hard work. To not have someone else decide your slice of the pie. To have the chance to make more money than you need. And to decide when you can stop the train and do something else. In short, to be in control of you life. I say this now because after 18 years our business has gotten past the “will we make it” period and I can put some areas on autopilot. But I’m still cash poor. Some things will never change.
12. You are not going to be sexy. There is nothing sexy about a person that slowly built his company over 15 years to profitability. You may never draw any attention except from your competitors. You could make millions of dollars. But it probably won’t be sexy
13. If you want to see your family you better live as close to work as possible. The closer you live to work, the more time you get to spend at home. You are going to work long hours so why waste time with a commute.