After speaking and working with many business owners one thing is fairly consistent. Many business owners enter into a new business for all the wrong reasons. There are common misconceptions of business and people who are new to business generally fall into those traps. Having the wrong mindset when you start a business will be the fastest way you will fail in business. Here are a few common reasons people want to run their own businesses and reasons why those drives will prohibit their success.
1. I want to be my own boss
I hear this one all the time. At this point, I’m not even sure if the people saying it mean it, or if it has just become the easy excuse to explaining why they left their day job. However this is one of the most dangerous drivers for new business owners.
Anyone who has been in business for a long time knows that there is always someone telling you what to do. You can’t escape having a boss by leaving your day job. Whether its your business partner, wife, husband, client, customers or shareholders, there is always someone telling you that you are running your business wrong and giving you feedback on how you should be dong it better. That’s what we really mean when we say we want to be our own boss right? We don’t want anyone telling us what to do. The hard truth is that there will always be someone telling you what to do.
The hardest part of becoming your own boss is that you have more at stake. Your actions have a direct impact on your life, and those in your life. At least when you were an employee you could convince yourself that you were not to blame if something failed. But once you become your own boss, there is no one else to blame except you. The consequences are also greater. When you were any employee, the worst that could happen would be you lose your job and apply for a new one. Now, you risk losing your livelihood because you probably invested a lot of money to start this business. You probably even remortgaged your home so your failure will put stress on your relationship with your partner too.
All of the risks associated to starting your own business means that you will have a boss to answer too, simply so you can minimise risk. In fact, you have many bosses. Your business partner or shareholder will need to be confident that you are not running their money into the ground. Your Husband or Wife will need to be reassured that your income in stable. Your customers needs to feel like their opinions are being heard and you are improving your business for their benefit and loyalty. Even your employees are telling you what you do poorly and how you should reward them for their efforts. So, yes even if you have the final say. Success will always come from making others happy. Don’t leave your job to start a business because you plan on doing only the things you want to do. You will struggle to ensure you have adequate funding and support to keep the business alive for the first 5 years,
2. I don’t want to work 50 hours a week and not benefit from my efforts
50 hours a week? Is that all you work? Consider yourself lucky. A business person doesn’t stop working, holidays are usually business related and when the office is closed that’s usually when the real work begins. Success doesn’t come from viewing work in the form of hours. It comes from not viewing work as work. If you love what you do, it doesn’t mater if you are an employee or a business owner, the hours wont matter to you.
If you are leaving your 50 hours of work in a job you hate to do 50+ hours of work in a job you love, then entering into the new business is safe. But if you are leaving 50 hours of work you hate to do 38 hours of work as your own boss, then be prepared for a culture shock.
Business owners don’t work within set hours, so don’t enter business it the hopes of having a better work life balance. Well at least not for the first 5 years until the business is stable and profitable without your involvement. After being both an employee and business owner, trust me, you get a better work life balance from being an employee even if you are doing 50 hours a week.
When it comes to benefiting from your efforts, believe me, you benefit more as an employee. If you are so dedicated to your job that you are working 50+ hours, you are probably a really good employee and your boss loves you. Your commitment to your job will create job security, growth and career longevity. Not to mention a guaranteed income regardless of if the business you are working for is profitable. However, in business, your 50+ hours could account to nothing. Sure you have more to gain, but you also have more to lose. Usually you lose before you gain and there are no guarantees.
A 9-5 job might provide less opportunities to becoming a millionaire, but that is the price we pay for income security. There is no security in business therefore your efforts are not always rewarded. Don’t enter into a business only thinking about the rewards. The truth is, you earn more money up front as an employee then a business owner. The first few years are not profitable, which means you are working 50+ hours for free. And if your business becomes profitable, your profits are probably only equal to your employee salary – for a lot more work and a lot more risk.
3. I’m sick of office politics
We all hate politics. And lets be honest, this was one of my reasons for leaving. But the truth is, you never escape politics. Let’s define what we hate the most about politics. It’s social influence. We hate having to think about it consistently to get what we want. We just want to do our job and get the work done. Not think about who needs to be on our side and who we need behind us to support our ideas. Which means who’s ego do we need to stroke in order to gain some influence.
Guess what, business has more politics then the office. But the worst part is that you are trying to convince people who are not even aligned with you in anyway whatsoever. In fact, they are so varied and all educated at different levels it becomes extremely difficult to gain any traction. What I’m saying is, at least in the office you are working among people who are at the same intellect and skill level as you. You even have shared common goals (company goals). On the other hand in business, you work with bigger egos (because lets face it, everyone who left to be their own boss obviously has an ego problem) and many of those egos are not justified because the person is a complete idiot.
The challenge in the corporate workplace is that you have differing personal goals (i.e. wanting the same jobs/trying to get promoted) which creates challenges. In business…. you work with people of varying intellect and there are some real doozys out there. Complete idiots. In the corporate environment 95% of the people I’ve worked with are switched on and easy to communicate with because they understand 90% of what you are saying. In business…. I struggle to communicate with 20% of the people I need to work with because they don’t understand 95% of what I am talking about. Plus no one wants to listen to you because they know more about business. Business owners have much more ego then office employees. Many of them are rude and care little for your vision. Why does this matter? Cause as a small business owner, you need to work with other small business owners. Whether that be for partnerships, packaging or supplies etc, it will happen. You will ask them for something and they will snap back at you with their egos. You will sit there wondering what’s wrong it’s them and find it harder to navigate their complex personalities for “political gain”. It’s a nightmare. I left office politics to work with egos the size of a king or queen. Lucky this was not my only reason. But trust me, I would rather deal with politics in the office. At least they can spell and grammatically explain things. They are also more professional. Have you ever sent a professional email addressing an important matter only to receive a “hehe” followed with smiley face as they explain why they think they are right and have not intention to comply? It’s extremely odd.
4. I want to be rich
This has got to be the worst reason to enter business. Lucky I don’t hear it too often. It usually comes from people who haven’t taken the leap into business yet. Probably because once they do, they don’t want to admit this is their reason in case they fail epically.
People using this statement should replace it with “I want a chance at being rich” cause that’s what business is – A chance to earn a lot of money, not a guarantee. In Marketing, we use the word chance a lot in our copy writing. Why? Cause competitions are considered a gamble. Being a business owne gives you a chance at being rich, the same way being a singer gives you a chance at being rich and famous. However, not everyone becomes rich or famous. The truth is, most people (particularly employees) see how much a business turns over and thinks that means the owner is rich. But let me tell you now, I’ve worked with businesses that turn over 6 million dollars and are only as profitable as my marketing manager wage in corporate. Turn over is not an indicator of wealth.
Fortunately, the I want to be rich mindset only exisiting in wannabe business owners who haven’t delved into research yet. If money was their main motivator then the person would abandon ship before the business even starts since the initial investment is enough to drive them away. They would be shocked as they ask themselves “What? I have to spend money to make money?” Others motivated by money are also sure too be crooks – which there are many in the business world too. These crooks are not in it for the long haul and take shortcuts. No customer service, money laundering, not paying suppliers, borrowing money from family and friends then claiming bankruptcy.
Business is not a get rich quick scheme. You are safer working and investing in shares or property.
5. I want to turn my hobby into a business
This is one of the better reasons but still raises some challenges. If you are skilled enough to create beautiful things that people want to pay you money for, that is a great gift and can definitely be monetise with the right strategy. However the core challenge you will face is letting go of the attachment you have to your art. Sure we hear the stories of great artist like Disney and Christian Dior becoming extremely successful by sticking to their beliefs in their artistic vision rather than conforming to the general public view, however those types of successes are rare and are not without compromise or understanding of public view. The truth is, compromise is mandatory in business and an artist/technician finds that difficult. The concept of art, is that it is a reflection of who you are and the way you see the world. When you are not looking to monetise it, it can be a beautiful form of self expression and become the subject of differing opinions to the person viewing the art. But when you hope to commercially produce it, the art turns into a product and a product should not be subjective to the person buying it. It needs to convince the person that it is worth its monetary value. Therefore, buyers will often ask you to adapt your work to suit their needs. Most creative people find this request offensive. While it may be true the buyer lacks the knowledge that makes your work possible, they also happen to be the person with the money. This means you need to let go of the art and allow your talent to be used by others for products they want to buy. Most artist will struggle and many decline because they have a strong view of being true to their work. They view changing their work to conform to what others want as “selling out”. The view is not important, because as artists we all want different things, but this particular view is what can prohibit your ability to grow your business and expand into new markets. Most artists or technicians, turned business owners start with a niche group of buyers who love everything the have produced just the way it was created by the technician. But being able to appeal to a wider market means generalising your product in a way that most people can feel connected to it. This means it may become something you no longer love. Deciding how much you wish to compromise is up to you.
I’ve worked with fashion designers, who refuse to change their designs to be more commercial for large retailers like Myer or David Jones after receiving feedback at their interviews. Declining that road meant that they needed to pursue boutique based retailers but declining such a large retailer also means struggle for growth to maintain a profitable business.
Ive worked with graphic artist who struggle to maintain long term relationships with their clients because they hate being told what to do creatively. I’ve even worked with developers who can’t maintain a steady client base because of their frustrations working with people who don’t understand technology and its limitations. The reasons agencies are better at maintaining end-clients is because they have account managers that ensure both the designer/artist and clients needs are met. This person has a non bias view that allows for compromise. But if you are a artist venturing out on your own, you need to become both the artist and the account manager. Doing great work, within others expectations.
In summary – the decision to enter business needs to be a lifestyle choice. It doesn’t suit everyone and most long standing business people (including myself) will tell you, …. “If I could choose, I wouldn’t do business and I wouldn’t recommend it to my children or friends.” The statement sounds odd since we all have the choice to exit whenever we want, but what the statement really means is… business is hard and not for the faint hearted. We lose more then we gain, we never know what’s around the corner. We live on the edge always planning for a more secure tomorrow. And that ultimately being in business is a lifestyle choice. It’s personality type that remains in business – those who thrive on change, challenge and don’t seek security. And because it’s our personality, that’s why we can’ choose. We only wish we could choose to leave business, because we understand the impact business has on loved ones in our lives. Our partners, families and friends wanting us to have something more stable. We may have been employees but not found satisfaction because of the predictable routine the employee faces. So if you can live a life as turbulent as a business environment, then join the path of a business man. But if you seek security, it may not be for you.