I used to think that running a business would be fairly easy, provided I had a good enough idea for something that many people or some set group of people would want to pay for, and I had the ability to make the products or do the service that the business would be selling. I was wrong. Or at least the ways I’ve gone about starting a business up have been difficult and stressful, and I’ve been disappointed several times. Many of these challenges seem to be fairly common and some, even a natural part of turning an idea into a real profitable business.
Entrepreneurship involves things that aren’t your main skill or passion.
Contractors and other self-employed people are business owners. Yet on their business card or Linkedin page I would bet most don’t say “Entrepreneur” or “Business leader”.It says the industry name for people who do that kind of trade. “Carpenter”, “Electrician”, “Baker”, “Web Designer”, “Freelance Journalist” or something in that vein. From talking to other business owners, reading what they write online and my own experience, it’s clear that for many, life isn’t about maximizing profit, minimizing risk or understanding a market. For many, their goal and dream is to do a specific something, and the only way to do it and still earn a living is to be self-employed. Some are compelled by visions of products and services that they feel should exist. For others it’s all about a given career like the ones I mentioned earlier.
Of course, business leaders do have to regularly spend time understanding their market and plan how they will make a profit whilst minimizing risks. Otherwise their business could go bust, or never take off in the first place. They also have to make sure that any taxes and suppliers get paid, make sure that their customers pay them, that potential customers find out about them and get the right message, that they are inline with all regulations and regularly make sure that no changes in the world that they operate in will cause problems.
For first time business owners, this may well mean you have to learn lots on the job, while the business is small, not fully established and probably not earning as much as it will eventually. If you are starting a business up by the bootstraps, you probably have a limited budget and time for learning from expensive mistakes like marketing campaigns that don’t reach the right audience or making products that there isn’t a real market for.
Underestimating the challenge
Even if you get everything right first time, it is easy to underestimate how much time, energy and knowledge is required to do all this “business admin stuff” if you’ve never done it all before. This means that if someone starts out building a business without help or asking people how long this stuff takes, they might:
- Underestimate how long it will take to get the business fully set up and earning
- Overestimate how much free time and sleep they will have to recuperate each evening.
- in the case of people starting out on their own they may overestimate how much time they will have to work on the core of the business, and potentially even have to juggle everything to avoid problems.
Your idea might not be as great and unique as you think
I’ve had a few times where an idea for a product forms naturally in my mind, and it sounds amazing. So I start to research and make a business plan, only to discover that it’s just not worth doing. Sometimes there’s already a product that does everything you were thinking of plus a load more, and it doesn’t look easy to compete with. Sometimes the expected return on investment is just too low or far away for it to work for me personally at the moment. Sometimes it’s just not a good idea, once you look into it properly.
This can mean that you have to not go through with your idea even though you’ve already got excited or told close friends and family. After a few ideas abandoned at this stage, I’ve learnt to not share my ideas with anyone, and down play my excitement for a project until it’s live. I often work secretly on projects and if asked (even by my wife or parents) I say it’s just a little training project to keep up a skill. This is quite tricky for me because I’d love to share what I’m working on with somebody, and it’s frustrating that family think I’m doing much less than I am.
That’s not all
I was hoping to cover all the reasons why starting and running a business can be hard in just one blog post, but frankly there’s too much to cover it all well in one post. So I’ll do more posts on this theme in the next few weeks, and maybe some other entrepreneurs will join in with their experiences of this they’ve found hard.
Here’s a list of challenges I’ll talk about next week:
- Your perceived market might not actually exist
- Your market might not be interested in your concept.
- Profit can take a while to happen – but you’ve still got to live on something in the meantime.
- Profit doesn’t always happen as quickly as you thought it would.
Please comment to let me know your thoughts – what have you found difficult?