Many dream of owning their own business someday. No more answering to the boss. No more office politics or unfair performance reviews. Set your own hours, go your own way.
Laid off from their old job because of the pandemic, many former employees did just that – they became entrepreneurs. Five million new businesses were formed in 2022, about twice the pre-pandemic norm.
I started my own company in 1990. I was 27. There are about 50 of us now, and I have no plans to slow down. Working for someone else seems unimaginable.
And yet not everyone has such a rosy experience. That’s why I want to share with you the Ten Landmines Entrepreneurs Often Fail to Avoid.
- Only half of all start ups survive five years according to the Bureau of Labor Statistics. This is not to suggest that half of all businesses fail. Some might get bought out by other businesses, or merely undergo a name change. Regardless, the probability of long-term survival is perilous.
- Even businesses that “survive the five” may not be thriving. Perhaps the business owner would still have been better off financially remaining an employee.
- Some entrepreneurs go the franchise route. However, franchisors can dictate products, methods and territory. The franchisee may have little more autonomy than a corporate middle manager.
- Some entrepreneurs raise venture capital to start their business. This means instead of answering to a boss, you answer to investors.
- Some entrepreneurs go into business with partners. Having a business partner is akin to having a marriage partner and half of all marriages fail. Business partnerships do too.
- Being in business for yourself can be isolating. For introverts like me, that’s no problem. But if comradery or collaboration is your thing, beware the isolation that can come with starting your own business.
- Starting a new business can be all-consuming. This is probably not going to be a 9-5 gig. What about work life balance? Is your spouse fully onboard and working with you shoulder to shoulder? Or are they getting dragged along on a ride they never wanted? And what about the kids? Can they get involved or are you going to become a stranger to them? Even friends and extended family can feel left out, victims of your new enterprise. Go back to number six and further consider the possibility of isolation with fresh eyes.
- You could go broke. If you’re an employee and you guess wrong or do a lousy job and you could get fired. But if you own the business, make too many mistakes and you could take your entire financial life down with the ship.
- You are going to make mistakes. When you were an employee and made a mistake, chances are the company ate that. You’ll be eating your own mistakes from now on.
- It costs more than you thought. I’ll never forget my new office when I first started. I was surrounded by secondhand equipment and assemble yourself office furniture that was pictures of wood over particle board. It all cost around $10,000, and that was in 1990.
All these troubles aren’t meant to discourage you, but to better equip you for your journey. I’m rooting for you from the fifty-yard line!
Next time I go to the Super Bowl for free, I want to take you with me. If you want to find out how I got to the Super Bowl gratis the first time, get my latest book, How to go to the Super Bowl for Free and Other Lessons from a Lifetime in Business as soon as it’s available. Click on the red email button below, put 15% off in the subject line to get 15% off the book when it publishes. No obligation now. Thanks for listening.