Should I Start My Own Business?
by Peter Anderson
BrokeSucks.com Editor
Running your own business and starting your own business are two different things. One involves navigating a path towards sustaintability and growth, the other is like making a plane go airborne. If you've done it before, no sweat. If its your first time, and you've never seen anyone else do it, you may be in for a rough time.
Why people work for themselves
Here are a few reasons why people risk their time and money to start their own business:
- "Unemployable." That is, they frequently find themselves fired from jobs even though they are good at what they do -- perhaps too good.
- A desire to earn a lot of money. Jobs provide a quick access to cash. Do this, I'll pay you X dollars. The tradeoff is an earnings ceiling. In the employee world making six figures a year is the top of the foodchain. In the business world, seven figure owners aspire to be make eight figures a year, and beyond.
- A need to do something enjoyable. Most people work best when they do soemthing they love. As an employee you are usually doing a job the boss would rather not do himself.
- Flexible time schedule. Want to wake up at noon and go home early? Not too many jobs provide this option. Other people aren't so much interested in the lazy Monday mornings as they are in making time for their family.
Realistic Expectations
I'll be honest with you, numbers one, two, and three are points I've seen in all the most successful people I've met; number four is not. I first started my own business largely because of number four.
Right now my schedule looks like this: wake up, work, eat lunch, work, eat dinner, work, go to bed. Seven days a week. Thats no vacation. Despite this heavy schedule I still have to kick projects to the curb to make way for new opportunities.
Realistically you can earn $50,000, $60,000, even $70,000 or more a year on a relaxed work schedule. The first year or two may be far from relaxed, but thats temporary. $500,000 a year working 40 hours a week? I've never seen anyone do that.
Do you need a lot of money to start a business?
Contrary to popular belief you do not need a lot of money to start your own business. I've seen many successful businesses started for under $1,000.
Recenlty while paging through Entrepreneur's
"Hot 100 companies of 2006" I noticed many companies were started with between $50,000 and $150,000. Ok, that is a bit of money, but its a far cry from the millions or even billions invested in to Donald Trump's real estate ventures.
Starting out small teaches you the value in capital allocation. Instead of spending $15,000 on new office furntiture you'll be figuring out how to get deals on business goods and services. This is a skill that can pay back many multiples throughout your business's lifetime.
How do I know if I'll be any good at this?
I see a lot of people question their own abilities to make money. Its a very sad mistake.
I believe that society trains us from an early age to be managed, not managers. I'm not saying that the world would be a better or safer place if it was the other way around. What I am saying is that many smart people who could build billion dollar companies instead take safety as an employee.
A recent study by
Henry Mintzberg of
McGill University in Montreal showed a disturbing percentage (74%) of Harvard MBA graduates to be "utter failures" 13 years later. So how then have college and high school drop outs gone on to build multi-million dollar businesses?
I have asked myself this question many times. I have theories but no absolute answers.
In my experience those who successfully start their own businesses are very serious about what they do and completely dedicate themselves to the task. The parts that they are good vary widely. Most will take a stab at a wide variety of seemingly unrelated markets.
The biggest mistake you can do about starting your own business is waiting. One month becomes six, six months becomes a year. That time goes by for others too -- the difference is that while you wait they are making money.
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