Starting your own business is something that many people dream about. You can be your own boss, work when and where you want to, and you will reap all the rewards of your efforts. On the flip side, though, you will find that your own business will take up more of your time than you realize. It’s a lot more stressful than people think. If you are about to embark on a business venture, you need to prepare for the negatives as well as the positives. So, here are 10 things you need to know about being an entrepreneur.
1. Cash Is King
Whatever type of business you start, you will soon find that you can’t ignore the accounts. Doing a great job and getting paid for it are two different things. Keeping track of your cash flow will become a regular task. The cash that is coming into the business is your key performance indicator. It’s not your sales or your accounting profit. You will need to monitor cash daily to ensure that your business stays on track.
2. Customers Aren’t Your Friends
Building good relationships with customers is an essential part of running your own business. However, don’t think that all your customers will become your best friends. Business relationships are very different from personal relationships. They are, after all, relationships founded on money.
3. Watch Those Profit Margins
Revenue from sales is no use to you at all if there is not enough profit margin. This applies equally to product sales and, to providing a service. Chasing after sales at any cost is not going to make a successful business. You need to have the courage to say no to sales deals that are not profitable enough.
4. Running a Small Business Is a 24/7 Affair
The idea of working when you want to may sound great. The truth is, though, you will be thinking about your business 24/7, even when you are not working. You will need to consciously switch off sometimes. It’s important that you get quality relaxation time while you are making your business work.
5. You Will Be Tempted to Run Before You Can Walk
There will be occasions when success could make you a bad decision maker. It is important to remember that one good month does not make a great year. Don’t be impetuous. Make decisions based on long-term trends. Not on the excitement of a short-term windfall.
6. Employees Are Hard Work and Expensive
As your business grows, you may want to hire employees. Think very carefully before you do this. Employees need management and they must be paid. If you need an extra pair of hands, consider hiring temporary workers instead of full-time employees.
7. Fixed Costs Are the Killers
Don’t sign any long-term contracts until you are 100 percent certain that your business can support them. It’s the fixed costs that don’t vary with your turnover that will kill the business if sales take a downturn.
8. Hiring Friends and Family Is a Big Mistake
You might think that friends and family would make good employees or business partners. They can, but they can also be a major problem for an entrepreneur. Mixing your social life with your business life is fraught with problems. Could you reprimand or fire your spouse at work and it not affect your personal relationship?
9. You Will Need to Be Brutal with Time Management
When you are running your own business there will always be something that needs doing. You will need to plan each day to ensure that the important tasks are completed. Don’t let what you want to do take priority over what must be done.
10. Know When to Quit
Your own business is your baby. You will want to nurture it and see it succeed. Even so, you must always be prepared to walk away if the business isn’t working. Pumping more and more of your own cash into a failing business won’t work. If a business fails and you get out soon enough, though, you may be able to move on to your next business idea.
Running your own business can be very rewarding, but you do need to be realistic and disciplined. Business is rarely all plain sailing. Success can bring you financial rewards and great personal satisfaction. However, you need to prepare for a few stormy seas along the way as well. Enter entrepreneurship with a realistic outlook. Then, you will be much better placed to make your business a success.
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This has been a JBF Business Media production.