As a former member of SCORE, an organization that provides advice for startups and entrepreneurs, I used to talk weekly to men and women who were planning to start their own business. In a turbulent and uncertain economy, it might seem a great idea. Those who have an entrepreneurial spirit are enticed to pursue their dreams.
Young or middle age, professional or skilled, men or women, it was always amazing to see how many of them have very unrealistic expectations about what entitles to run a business. Some not only lacked abilities and knowledge of the everyday operation but also the necessary assets and funding to start and sustain the business.
Many years ago, developing the vision and planning of my own business was a very exciting time. My thinking was “If I can do this for someone else, I can do it for myself.” I envisioned the perfect picture of a successful business but had very little idea of how to run it. Although I had excellent professional skills as a translator, I lacked the operational and financial acumen to pursue this new venture. I was lucky enough to get good advice and in time acquired that experience.
Most prospective startups and entrepreneurs find themselves at the same starting point. So the task of SCORE members is to “drop some bombs”. If you are thinking about starting your own business, considering these specifics might help you make a decision.
- You are your own boss and something else
Working for someone else is doing what you do best, and why you have been hired in the first place. When working for yourself, you dedicate 60% of the time –and sometimes even more– to tasks involving other professional skills such as accounting, hiring and managing people, marketing and selling, investing in equipment, and planning and evaluating your business. In other words, you become the CEO, the CFO, the PM, the OM, and the sales force of your business, and work an average of 60 to 80 hours a week. Are you willing to sacrifice time with your family and other activities to do so?
- Forget your vacations and other benefits for a long time
As an employee, you receive a salary, benefits, paid time off, annual vacations and probably some sort of health coverage. Startups and entrepreneurs might not have all those benefits for a long time until their business really takes off. Can you and your family be covered in someone else’s plan –your spouse’s, for instance? Do you understand you probably won’t have time or money to take a vacation for a long time?
- You got a new family
Hiring and managing employees entitles not only to have a thorough knowledge about labor laws but also the skills to handle other people’s personal lives. You need to have good character judgment when you hire someone, provide training and tools for your employees to do their jobs, be ready to demand the right performance, and deal with their personal and family problems –most employees become part of “your” family. Also, you need the guts to fire them if the person does not fit in the company’s culture or you need to make business decisions. Are you ready to follow through?
- It takes money to make money
Startups and entrepreneurs’ new ventures usually require deep pockets. Unless you bring clients from another business setting, or you started a side business and then you expanded into a full-time activity, clients will certainly take time to show up. You need to build credibility and a brand name among customers. Overhead expenses can be very costly, especially if you have a “brick and mortar” location, which asks for rent, utilities, maintenance, and probably a considerable set up investment. Also, you need reserve funding to sustain your business during rainy days, and a substantial cash flow to pay vendors and employees.
- This or that?
Making sound decisions about the type of business you have in mind is a bumpy road. Starting as a consultant with a virtual office is cheaper and faster than opening a store in the local mall and buying merchandise. I advised a woman once who was crazy about a line of products she used and loved, and thought she could sell it; she was looking at a small store in a stripping mall with a monthly rent of over $2000. She was counting on her lifetime savings –not enough to sustain the business for more than three months– and credit cards for startup costs. She had a full-time job, good credit and never had retail experience before. I was torn because I saw a bleak future and shared my concerns with her, and that was all I could do. The decision, in the end, was hers.
- Where is the boss?
Although you are the front face of your business, your best bet is to find and train people to step in at any time. Not an easy task, but learning to delegate was one of the most difficult lessons for me. Because you are so invested in your business –in money and expectations– it is very easy to take over other people’s jobs if you feel they are not performing at their best. So you end doing everybody’s job instead of steering the business, which is your main objective.
- Do not forget the big picture
Building a business you can eventually sell is something you might not have in mind when you start but definitely something to be considered. Life changes and although you think your business will last forever, your children might not be interested in following your steps, or you might get sick, or your spouse might have to move to another job and location. At those times, having the ability to sell your small business could become a better option than just closing the doors and letting go of many years of effort.
Keeping in mind these and other factors might allow you to develop a productive small business with realistic expectations, and avoid getting trapped in your own dream.
- The 10 best Holiday gifts to support Latina entrepreneurs in 2017 - December 15, 2017
- Lorraine Ladish addresses fear of aging in Your Best Age - December 12, 2017
- Refreshing Peruvian beverage Inka Cola growing popularity in the USA - December 5, 2017
- Latina SmallBiz Expo Pitch Competition winners at Univision 41 - December 2, 2017
- Giving thanks and moving forward into 2018 - November 23, 2017