My mother owned a small art gallery for nearly forty years. She started when she happened to have a small inheritance burning a hole in her savings account, a brand-new Bachelor’s degree (with a minor in Art History), no particular job prospects, and the arrogance of a 23-year-old who thinks she knows everything. If she’d known then what she knows now, she would have been a great deal more humble — and she would have missed out on a satisfying, maddening, fun and creative roller coaster ride of a career.
Starting a business is not an easy venture, and in some ways, it does help to have the overconfidence of a young adult to face the challenges inherent in becoming a business-owner. But putting out your own shingle is an excellent way to make sure that your job is more than just a paycheck. If you’ve ever dreamed of going into business for yourself, here are some of challenges that you need to plan for:
1. Profits will take time. In fact, you could end up facing a year or more of losses before your books are in the black. Unfortunately, it costs a great deal of money to start a business (including renting facilities, buying equipment and supplies, paying for advertising, finding and hiring employees, etc.) and it takes a great deal of time to build a loyal customer base so you can count on income from one month to the next. So while you are doing your pie-in-the-sky dreaming, make sure that you look at the numbers to know exactly how much you will need in start up costs (including your own living expenses).
2. It’s likely you’ll have direct competition. No matter how new your idea is, there will always be someone else doing something similar — either because people realize what a great idea you have and copy it, or because great ideas sometimes blossom in several places at once. This can be incredibly frustrating, and direct competition does require action on your part. You can’t ignore it and hope it goes away. You will want to re-examine, tweak and possibly overhaul your product or business plan to make certain that you are still meeting your customer’s needs better than anyone else.
3. You’re going to work harder than you ever have before. Being a business-owner means that the buck stops with you. Unlike life under a boss, there is no clocking out at the end of the day and leaving the job stress behind. If you’re passionate about your business and committed to making it work, then this is hardly a sacrifice. My mother never felt like she worked a day in her life, even though she has poured everything into her gallery.
4. You can’t please everyone. One of the unfortunate truths about working with the public is that you will always tick someone off, and those unhappy people will complain. Be prepared emotionally for the fact that not everyone will like your business, and don’t let it get you down.
5. Taxes are a big pain in the butt. When you own a business, you not only have to pay income tax, but also self-employment tax, payroll tax and others. So as you are making your business plan, include a sit-down with a tax professional so Uncle Sam’s bite out of your profits does not come as a surprise.
Despite these challenges, owning a business can be the best decision you’ve ever made. If you are ready, take the plunge and enjoy the ride of your life!