Do you want to start a business? You get to be your own boss, set your own hours, and potentially even work from home. Doesn’t that sound great?
Most of the perks that you hear about, aren’t accurate. I know it sounds like an awesome idea, but there is a lot that you don’t know about starting a company. Before you make your decision, here are a few things you should know:
You don’t have one boss, you have multiple bosses
When you work at a 9 to 5 job you have one boss that you have to report to. Whatever your boss tells you to do, you do. You may not always like what he or she is telling you, but at least you only have one person (worse case 2 people) bossing you around.
If you decide to start your own business, every one of your customers is a boss. If you think one boss is bad, think about having 100. Whatever they want, you have to do. If you don’t, your bosses (customers) won’t be happy, which means you won’t be in business much longer.
You don’t get to set your own hours
You can’t always choose your own hours or get to work from home. Business is all about making money, so you have to do whatever it takes to succeed. If that means you have to answer calls in the middle of the night, then so be it.
For example, when I had my consulting agency people thought it was pretty cool that I started work at around 10 or 11 in the morning. Boy, where they wrong! In many cases I worked late because I got calls from Germany in the middle of the night and then I had to work early because I got calls from the New York. Or even worse, if my client in Germany wanted to see me, I had to hop on a flight, spend 24 hours in Germany, and then fly back home.
What a great way to travel.
Your business will impact your personal life
Could you go weeks without seeing your wife or kids?
Could you go months without seeing or talking to your friends?
There is no way you can keep your business and personal life separate. Your business will impact how much time you can spend with your family and friends. If you aren’t willing to make a sacrifice, then you are going to have a tough road ahead of you.
And even if you are willing to make the sacrifice, is your family ready to make it as well? Because if they aren’t, you may ended up losing them.
The odds are against you
Yes, Zappos did sell for $928 million. Yes, Ebay bought Skype for $2.6 billion. And best of all, Facebook is worth billions.
You are hearing all of these great stories, but are you hearing about all of the failures? I don’t know what the exact odds of succeeding are, but I’ll bet you for every Facebook there are millions of failures. You never hear about these failures because no one likes talking about how they failed, but instead they only like to brag about how successful they are.
I know what you are thinking though.
But Neil, look at people like Evan Williams. Not only was he the founder of Blogger, but he also founded Twitter. If people like him can be successful twice, why can’t I be successful just once?
Yes Evan is very successful, but you aren’t him. The odds of any entrepreneur succeeding more than once is very low. A lot lower than succeeding once.
When it rains, it pours
Everything may look great when you are first starting your business, but believe me, a lot of things will go wrong. And when things go wrong, it will probably be your luckily day because more things will end up going wrong.
You can’t predict the future or control everything. All you can do is try your best, which in many cases won’t be enough. This is one of the main reasons that will cause you to stress out, lose a lot of your hair like me, and maybe even get depressed at times.
This happens to all entrepreneurs, and it can be devastating. For example, I just recently met an entrepreneur who had a company that was profiting 15 to 20 million a year. But after we went into this economic downturn, he had no choice but to sell the company and walk away with nothing.
You’ll have to become an asshole
I know you don’t want to be that mean guy, but sooner or later you will have to. Just think about when you have to fire someone. It may seem easy at first, but after you have worked with that individual for a few years and they become your friend, it won’t be easy to let them go.
Trust me, you’ll feel like an asshole!
And firing someone isn’t the worst thing you’ll have to do. Every business has it’s own set of problems; you just have to be willing to lay down the law, when the time is right. It won’t feel right, but that’s life.
Your lifestyle is going to change
If your company does well, you will be living the life of the rich and famous. But the chances of it doing well aren’t so hot.
When you first start your company, you are going to have to make sacrifices. For example, when I started my first company this meant that I couldn’t do anything that cost money because I didn’t have any. I had to work at a theme park, picking up trash and cleaning restrooms, so that I could have enough money to keep my business a float.
Your lifestyle can get back to normal, but it maybe years before that happens. Or even worse, if things don’t go the way you are planning, it may never go back to how it was before.
Success isn’t easy to come by
I personally don’t think I am successful yet, but you may think otherwise. You may look at me and say that you want my life.
Yes from an outside perspective I have done well at a young age, but it took me years to get here. I am now 24 years old and have been creating businesses since I was 16. 8 years is a long time to put into something and you probably never hear how I struggled for the first 3 to 4 years. It doesn’t matter if I was making tons of money because at the end of the day I was in debt around 1 million dollars.
If you are going to start a business you have to be willing to pay your dues. Don’t expect things to look good within a few years. Even if you are starting to make good money, you shouldn’t get greedy by taking a high salary. Consider the bigger picture and reinvest that money back into the company.
Conclusion
By no means am I trying to tell you that you shouldn’t start a business. But before you pull the trigger, you need to consider all the negative aspects and not just think positive.
With me, I got lucky. I started a business at a young age (I didn’t have a family to worry about), my parents took care of all of my bills, and I knew that I could always live at home.
Now on the other hand if you aren’t in the situation I was in when I was 16, your risk of starting a business is much higher. And if you can live with that… well… that’s what makes you a true entrepreneur.
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I mistake I think we made was as a married couple going into business together after a time of stress and grief. My wife had quit her teaching job after a miscarriage and shortly afterwards I was laid off from my job. After a few short term jobs I decided to join her on the home business she had started and I did on the side. The miscarriage was not the only thing that happened in the course of the past 5 years she also lost three other close relatives one being her father and and the same time I was acting like an A-hole boss when I should have been putting my energy into bringing in a stable income and being a loving husband.
A business is not worth risking a marriage over. Thankfully we are trying to work things out and I have realized things I have done wrong that have hurt rather than help the relationship.
I highly recommend couples who are thinking of going into business together to really seek out counseling first. If a couple is not prepared with the marriage on strong footing (even if they think they are fine) the stress of a business can be dangerous to a marriage.
Going into business with a significant other or family member is always extremely challenging. There are plenty of cases when it works, yet plenty of cases when it doesn’t work. It’s all about being able to control your emotions.
What resources will you require to begin your business? If you are counting on other people to help you get started (including your spouse, significant other, family members or your best friends that can be trusted). I would suggest all must be in proper documented and if possible legalize it. This is the best way to link and bond each an. This is called partnership.
This post is very well written and completely true. Our company is successful but it has taken 10 years and 24 hour tech support to make that happen. It takes sacrifice and tears!
I would do it all over again if I could because I believe some people want the challenge and some people don’t. If you don’t want to start your own business, then go be the best employee you can be and THAT IS OK! Wait, that is GREAT! I believe being a business owner isn’t for everyone and I hope everyone finds what is for them.
Well said Erica. If you want to have your own business, expect to spend the next 5-10 years working your ass off. Hey maybe you don’t have wild crazy dreams of traveling and owning expensive cars and houses, so if that’s not your cup of tea, stick with a 9-5.
Of course if your business is just making money online, you’ll have a bit more control over your life (though you’ll still need to put the hours in to succeed).
I disagree. All of my businesses are online and things are very hectic.
@Todd
It may seem first that things are cool online but try understanding this. As Neil aptly said you are going to have more than one bosses and add to this if you have an online business with an ad based revenue model just think about the chaos and pressure it creates once you understand that not only there are thousands of bosses but also you dont know them personally at all. Life online is highly and least connected the same time.
Making money online through ads, services, etc. Can be a lot more tedious and difficult. Instead of having your competition being only local, when you have your business online, your competition is WORLD WIDE!
That is true, your competition is worldwide, but then again is your client base. In terms of advertising online (e.g. Adwords, media buys, etc.), you end up fishing in the ocean, as opposed to a lake (local). The competition is stronger, but there’s always more fish for each fisherman out in the ocean.
My wife and I have been running a small design shop out of our house for the last 2 years, and this spring I went full-time on it. This was a stressful, and painful period in our life, and on our marriage. I can tell you that I thought many times about hanging up the SMB idea and going back to a 9-5. I am so glad that I did not.
We are struggling through the rough times, and living nice in the good times. I am working on more ways to expand our business and working to bringing my wife home full-time on the business also.
If you are willing to put in the hours. Deal with clients emailing you on Monday and asking why the project they are just now telling you about is not done yet. If you have the guts to walk away from a client because you know it will not be worth it in the end, then you can make it.
I encourage people to start a business, but start it small and start it around a passion. If you are not 10000% in love with the thing you want to do for a business then do not do it. When the cash dries up (oh it will at times) are you willing to stick it out and keep working on your passion, or is the business all about the dollars and no passion.
Exactly! Don’t jump into something your going to half-ass. Everyone’s interesting in something, so follow what you like
David, you mentioned dealing with clients and asking for a project’s status that has been overdue. Why not expand your business by hiring more hands on deck– I’ve found local college students to be more than resourceful and are willing to work for “cheap”.
Thats a great add! college student are VERY interested in working and like you said, it’s super cheap labor.
Great Post! It is nice to hear someone post about the real side of entrepreneurship. I was a freelance designer a few years ago. I loved it at times and hated it at other times.
As a freelancer, you’ll have many good times, but probably more bad times
Good for you to keep sticking it out!
Yaa there is no harm in being optimistic as you said Neil.. Its not easy to be successful.
“As soon as there is life there is danger.” – Ralph Waldo Emerson.
This quotation suits well for business men.
I’m an engineering dropout.Quit my education to make something on the internet.I am 20 right now.All that I earn is equal to my bills i.e I remain with $0 at the end of the every month.This is not what I expected before entering into this online business.But I’m still very confident that I’ll bring everything in my way, because my enthusiasm in this business remained the same.
Yes success is’nt easy in a business,we’ll have multiple bosses,lifestyle change and asshole etc etc .. but I believe business is the only way to make million or billion dollars.
Well by you making enough money online to pay your bills, is more than 90% of the other people trying to make it online, so good job. Keep at it, your time will come and your hard work will pay off.
Nice advice, having gone from running then selling a company to being a “wage slave” I absolutely agree that being an employee has it’s perks.. getting paid EVERY week, one boss and the ability to clock out at 5:30pm every day is nice compared to working all hours, getting paid when there is cash and having dozens of demanding customers that you just can’t ignore.
But still being self-employed does provide a sense of empowerment that employment just can’t match.
It comes down to the old saying “no risk, no reward” With your own business, obviously there is such a high risk, but the ability to make 10x more is worth it for many.
No risk, no reward is one of the oldest adages in business. This formulation of strategic risk was first expressed in written form by the Greek scholar Herodotus in 450 B.C.
I love this post in that it helps those thinking about starting a business realize it is much harder than it seems. However for me the risks and stresses of having a job (in the true sense of the word) are far worse than the stress and risks of a business. I love that if I need to make more money, I am in control of that. You cant go ask your boss for 1k more than what you made the month before. If you need to do that as a business owner, you can. You go out hustle get some more clients or sell some more products and you just got a raise. I love that my mortgage is paid because I pay it not because someone else does.
I am not saying an employee doesn’t earn their money, I am saying that letting someone else dictate how much you make is scary.
Also I have found that you can be very strict on your schedule with clients etc. If you don’t want calls from Germany, don’t take clients from Germany. Learning how to say no to clients was one of the best business lessons I have ever learned. It frees up your time to find those that are truly a good match, it also decreases your stress which opens up for innovation and creativity. If you feel you need the overseas client, then hire someone to answer the phone, if you aren’t making enough off that client to hire someone then they probably aren’t a good client after all.
I quit my job after marriage and 2 twins. I started with the worse possible scenario, a young wife and 1yr twins. I adjusted by working nights a lot and yeah my wife didn’t get to hang out with me as much as we would of liked, but I helped her with the kids during the day and that was a trade off that was worth it. When I had a job she was at home with twins by herself and that was much harder. Now because of the dues I paid (and you do have to pay dues) I can hang out and vacation when I want with my family. 5yrs later and I still have clients and deadlines etc. but I have a system of communication that works for them and me and allows me to spend more time with my family than I work.
With that being said, if you want to start something as big as facebook or Twitter, Google etc.. then the time factor from family is definitely more of an issue. I have a family friend that makes over 400 million a yr and he has no family, let a lone family life it, is said.
That is fantastic Chris! I’m glad that after you spent all that time, you are finally able to spend more time with your wife and kids, that’s exciting! Anyone can start their own business, but let’s be honest, in times like these, it’s better to weigh your options.
Good thoughts Neil.
I too started a ‘lifestyle’ service business (like Chris here) back in 2001 (with severance, a little savings, and 9 credit cards – with a newborn and one in diapers). 8 years later, with jobs dwindling (as well as perceived security), many friends and family approach me looking for that ’silver bullet’ of successful business building.
What they never contemplate are the lifestyle choices we made (moving out of our large home into a basement apartment, selling a car, etc.) and continue to make. The first 2 years we had next to no income – whatsoever. Year 3 we broke through, but 24 months without much income is too much for most to handle emotionally. It realigns your priorities – and teaches you frugality by fire – that’s for sure.
Several years into it – we were still living in that basement apartment – paying off debt in huge chunks – but because we didn’t show the ‘trappings’ of ’success’ (i.e. long term middle class debt) – we’d get the ‘are you doing OK’ speech from everyone. Not until we built the new home and replaced the cars we’d given up – did our family really get it.
Risk = Reward
I’ve bootstrapped a profitable service business, but am starting to take the plunge on some of my bigger (leverage based) ideas b/c its not all its cracked up to be. Service businesses are especially exhausting – even with several dozen people working for you.
However, building a service business that doubles or triples their old ’slave wage’ is probably doable for most people – if they sacrifice lifestyle (time, toys and trinkets) and always push the value equation. Too often they turn into a job you just own.
But most people won’t pay that price, and I’m starting to think that most people shouldn’t. I have an especially strong marriage, mostly because my wife is patient and full of faith, but what we’ve been through would wreck most couples.
Start small, keep your day job, don’t go cold turkey or expect it to replace your income in a short time window.
If you have the day job income, focus on an idea that has leverage – not a service. Otherwise, all you’ll be doing is trading your current job for a much tougher one.
My 5 cents worth…
I wish I could read more on your experience. Maybe you should write an article as well
Can I just ask your about “the leverage”, what exactly do you mean by that?
Also, if I may add, sometimes going cold turkey is the only option for people. It’s either that or being stuck at a day job and being able to get out. Of course it’s not for everyone.
I’m contemplating about my own business. It ain’t easy, I have no illusions about it. But I haven’t been able to get out of my daily routine and concentrate on what’s important.
Thanks for the insight.
I think that was a little more than 5 cents
Great advice to give from someone who’s been able to go through a lot. Unfortunately most people won’t pay the price and would rather look for the easy button, let’s hope people figure out the possibilities of that happening quickly enough
Hi Neil,
I wrote a similar post that chimes with yours a while back – my perspective is slightly different in that I never had the big wins you did along the way!
If you’ll indulge the link, readers will find it here:
http://monevator.com/2009/01/05/start-you-own-business-risks/
If you’re not successful we’re going to have to redefine success!
Thanks for a great blog.
M.
Thanks, I’ll take a look at it and see how it compares.
Yikes, I should have gone back and spell checked it again. (Very pleased to have you checking it out.
)
Ha! At last, finally someone tells it like it really is and not just give hype to sell some damn get-rich-quick ebooks that aren’t going to do anything to help lazy individuals who wanna get rick quick! Neil, thanks for keeping it real.
If I had a dime for all the things I failed at, I’d be rich a long time ago. As a matter of fact you may have inspired me to write a book of my own titled “1001 Ways to Fail”. And I say this with pride, because it was only through failure that I was able to appreciate successes (no matter how small or big). This article shouldn’t discourage anyone serious about starting their own business. Anyone with enough smarts and heart can still go out there and do things they want and live life their own way. You just have to be aware that the bowl of success is not completely filled with milk and honey!
Daycom
http://www.daycommedia.com
twitter.com/daycommedia
That’s actually a very interesting title for a book. I’d read it
What about the Tim Ferriss thing? The whole idea of selling stuff online, automating it, and gneerating passive income? That’s a fantasy I have about doing business online…
p.s.
I have owned a business (food industry) for three years now and I am very slowly beginning to return to the lower-middle class/student lifestyle that I already had working as a 25 year-old copyeditor. My experiences corroborate everything I read in this post.
What about the tim ferris thing? All that stuff about having an automated passive income can work, but only if you spend the years of hard work and labor to make it grow. There are no shortcuts to success.
There are plenty of people doing that, but even Tim said he worked for an insane amount of hours each day to build up his original supplement business. It was once he was established that he could choose his customers, outsource customer support and streamline the entire business.
Working an insane amount of hours each day is an understatement to what’s really in store.
Spot on!
Running a business is 1000 times harder than doing a regular job, and that’s why I always advise people who ask me for guidance to not start their own business. With most regular jobs you switch off when you leave the workplace. And there’s regular vacations.
When you run your own business, you are either working or worrying about your business at least 100 hours a week.
Right. If you can, start a side business after your day job and see how it feels. If you begin to see results, then take a few baby steps to do it full time.
This thing is a great step to start your business.. Rather than starting full time, we can start with part time business and if it starts performing well, then we take a risk and convert it into full time business. But still its not that easy a job. You are bound to neglect your personal life for the betterment of your business.
When you are starting a business, say GOOD BYE to your personal life. If this concerns you, don’t start a business.
One more thing- I posted earlier about starting a food business-
Although it’s been a TON of work for very little money, I am about to get to the point where my business more or less passively (5 hrs of work a week on my part) generates about 30-40K/year for me, on top of paying down a mortgage every month on a commercial property.
I do think that once I have that sort of baseline income with a bunch of free time I’ll be leveraged to spend time and money swinging for the rafters a little more with future ventures…
Long story short- it has sucked, and I am still poor, but I still think it’s a very wise long-term strategy.
Well if your unhappy with what you’ve done, I would hardly consider it a wise move
No, but I understand what you mean, and there is a ton of work for very little money.
Yeah. When I said it has sucked, I didn’t mean that I hate my life or anything… just that it’s alot of work and has required alot of patience… it is not easy.
I was joking, but I get what your saying. I also respect the amount of patience you were able to put into it because frankly, I believe that most people lack that trait.
Wow, what a post, Neil! Shows us different perspective of business.
although this post is great, and shows us different perspective of business, i just wonder, would share with us what makes you start your own business? What inspires you to do it?
I’ve heard that what makes people move isn’t knowledge, yet different perspective, but inspiration. And i think you could share with us your inspiration.
Thanks before.
Best Regards,
Fikri Rasyid
What inspires me? My motivation is for my mind to grow and learn more
Anyone who thinks life would be much easier after starting your own business, is naive.However, the way I look at it: instead of working hard for someone else work hard for yourself. Ofcourse, owning a business is not easy and comes with big responsibilities. However, if you are starting a business without expecting these difficulties then you failed from the start.
Most people are in ‘la-la’ land when they think of starting their own business. People need a reality check and then make the decision to do it, or pass. Get what I mean?
How’d you get to be 1 million dollars in debt?!
One dollar at a time
I was pouring money into my business, and getting little to nothing out.
I see all these business fellows saying how much debt they’ve been in. Makes me feel like I’m not trying hard enough having never been there myself
I can bet that you probably aren’t trying hard enough…because if I said you are, you would of reached your level of success, don’t you agree?
I think what you wrote gives good insight into starting a new business. It also brings to light that planning to start a new business is one of the most important aspects. Good planning can avoid many of the pitfalls.
If you are married, one of you should keep a regular J-O-B so there is less stress on the income side.
I also believe that there is less risk in starting a home business that is internet based. There are many out there and many will just take your money, but there are a few out there that are really inexpensive, have good sound products and have good payment plans. MLMs allow you to leverage your efforts with other people who are like minded. If you have the right “vehicle” MLM can be a godsend in these times. I started mune out for $27. And I am still married. LOL
lol. Any business you try to run on your own will be difficult. Whether it’s online based or B&M, a start up business has challenges because of it’s lack of being known. Create a powerful marketing strategy and prepare yourself for some wretched times.
Great article.
People think freelance is great because you’re your own boss. In practice you’re working for a series of bosses, some of who will try to weasel out of paying you. You still have to take orders, but without the benefits of job security or overtime pay.
If your freelancing, then it’s probably a good idea to take orders up front.
I agree with all of the points listed, but when you’re like me on disability with nothing but time, what do you have to lose? Thankfully my online business has very low overhead so it never took a bite out of me in that way. Time management is the one thing I really need to learn (working too hard and not very smart).
Time management is VERY important. If some people are able to do hundreds of more things through out their day than you are, well, then you obviously not working hard enough. We all have the same # of hours everyday
Good point Neil Time management is VERY important : One thing is for sure you need to organize your work and use your time efficiently. The main reason is money always comes back but time never comes back.
Time is the one thing you can never get back. Time, like change is infinity. They work in an opposite effect.
This is one of the biggest lessons I’ve learned when starting my own business from home. You’ve really keyed it in, and I’m sure this point has been made clear so many times… But yet I think the majority of people get burned out too quickly through their day and lose focus. Or perhaps people may not be able to effectively and efficiently handle time matters because they don’t have any tool to manage their time. My solution: Blackberry + Computer time tracking software. If I’m on the go, I use the scheduling function provided by Blackberry apps, and when I’m on the computer, I try to make good use of my time by using a productivity time tracking application (Google for “Toggl”).
Ahh cellphones, making life easier huh. Time management is always key so whatever helps you in that aspect, I say go for it
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Great post Neil! It could not have come at a better time for me personally. I just quit my ’secure’ job and am finally diving full-time into my own business that I have been bootstrapping for three years now!
Despite all the negative aspects of running a business, I’m fortunately in the situation where I don’t have family responsibilities or any major debts to worry about. I’ve also been saving a ton of money for the past two years to be able to fund my venture. Since I’ve been bootstrapping for quite some time, I do also have experience in terms of the expectations. Yes, even running a part-time business will give you failures, no social life, lost sleep, and horrible clients. I am SO ready to struggle and kick butt (eventually)!
I’m glad you’ve stuck through it Ann, congratulations. Success and money doesn’t come easy, but when it comes, it brings friends
Great post Neil! It could not have come at a better time for me personally. I just quit my ’secure’ job and am finally diving full-time into my own business that I have been bootstrapping for three years now!
Despite all the negative aspects of running a business, I’m fortunately in the situation where I don’t have family responsibilities or any major debts to worry about. I’ve also been saving a ton of money for the past two years to be able to fund my venture. Since I’ve been bootstrapping for quite some time, I do also have experience in terms of the expectations. Yes, even running a part-time business will give you failures, no social life, lost sleep, and horrible clients. I am SO ready to struggle and kick butt (eventually)!
BTW I love your blog!
Thanks Ann! I’m glad to hear that you were able to start your venture. It’s a struggle, and it ain’t gonna get any easier just yet
You make a lot of valid points. Starting a tradition home home business can be a lot to overcome. But if someone really want to work from home then internet marketing can be an easier alternative. If done right you can actually set your own hours, have a low overhead and not have to deal directly with customers. If you become an affilaite marketer you can create a website, place your affiliate ads on it, and then start to generate targeted traffic. This is easier sad then done but it is a lot lest tedious then a typical work from home job.
Everyone and their mother go for internet marketing. You can definitely set your own hours, but don’t expect to make much.
Your right, it is WAYYY easier said than done. In fact, making money online as an affiliate market is SUPER challenging. It can take several years to see a decent stream of income.
A friend and colleague of mine likes to say, “Running your own business is great; you can set your own hours. Just pick any 16 hours of the day!”
lol. 16 hours is the least
how much hour will you suggest Neil?
Don’t set yourself with any limits.
Neil, great comment. I agree with this wholeheartedly. If you set yourself with limits, then your achievements will be limited. Of course you shouldn’t be working 20 hours a day and sleeping the remaining 4. Being able to maintain a healthy balance in your lifestyle is also key to running a successful business.
The only thing you should doubt is your limits – price pritchett
Neil, great post on the reasons TRADITIONAL businesses are a long shot at best. A good follow up to this would maybe be what types of business models ARE GOOD to start… virtual companies, information product publishers, simple sites with recurring billing models, etc…
I agree the traditional path is a mine field, but there are some business models that tear it up! I’d love to hear which get you excited the most.
That’s a great idea, I’ll use that for a future post. However, I still suggest that most people should either stick with or find a 9-5 and work on their other businesses afterwords.
I think that you should be more encouraging of people trying to do their own thing and it’s probably not generally a good thing putting out negative articles.
I’m just telling everyone like it is. Too many people are rushing to try and make money online only realize that it takes much more hard work than it does at a normal 9-5.
Oh I completely agree with that its hard work and there will be times when you have to make sacrifices but positivity is key with growth.
Focusing any time on negativity is a waste of time.
Exactly, it’s the difference between trying to go forward by looking at the review mirror and looking through the windshield.
That’s a good way of putting it all into perspective. Seeing your customers as your “boss” its definitely true, If you’re customers don’t like what you are doing and they resign from using your company— you are fired, basically. It’s all about outside perspective for those who do not have their own business. It’s not as nice as they assume it to be. You never really know unless you do it for yourself. As you say, its hard to become successful, and when you are trying to become successful you have to sacrifice a lot before you can start reaping in the real benefits of “owning your own business”. You for instance had to put in a lot of effort for the first few years before you made it big.
Till then,
Jean
I still put in a lot of effort. Becoming successful is a very lengthy process. Even when you think you’ve made it, your far from it.
obvious Neil.Building an online business has taught me so much about time management, creativeness, persistence, and connecting with others. you believe what you have learned is the reason you are so successful, and every one can learn these things very easily to apply to thier own business.
It’s great to have a business for what you want to achieve. In fact, create a business plan if you didn’t already, and keep it with you at all times. Look at it several times a day!
Starting up a business while you are still employed (especially an online business) will be the best proof whether an entrepreneur is upto the grueling demands of owning a full time business. This is what we have done @ 108bits.
Right, if you are interested in doing a business online, make sure you have a stable job, especially in this economy.
Neil,
Are you encouraging me or discouraging me?
That’s for you to decide
It all boils down to what you call success.
If you want to make a million dollars, or get on the cover of a magazine, your bar is set pretty high.
If you call success making your first dollar without punching a clock or being able to have more control over what you spend your time on, that’s a different level.
I may work 18 hours a day, but I’ve learned more about myself and running a business than I ever would have with an MBA. I want 1,000,000 bosses because I know I can help them better than the people who pretend to be all about customers. I genuinely want to help and am only limited by my technical know-how to be able to get it done.
This is all reverse pyschology to me. I probably “shouldn’t” have started my business but I’m 10000% glad I did.
lol, you couldn’t of said that any better Chance. I love the way you look at your business and future
I love this post. I started my own record label a year ago, and I am our artist. Before I started the business I assumed that all artists had the potential to do what I was doing. After surviving for one year in business I was forced to question that assumption. It has been SO HARD! I have used all the emotional fortitude, intelligence, and faith I have to get through this year and it’s only the beginning.
I agree that if you’re in a relationship, that person has to be on board, and you have to communicate what you’re going through to them so they can try to understand.
Also, when you’re young like I am, most friends and acquaintances won’t understand and that is hard.
I still believe someday it will get easier!
It will get easier, but it will get much harder before that. I know what your going through Sarah, but like me, you just need to keep on pushing through and work your ass off!
Yep those are definitely things you need to consider before trying to start a business. It really does take a lot of time and energy in order to run your business right. Thanks for the great post.
Time and energy are probably the biggest factors that will hold you back…Then comes your wallet;)
Nice Neil. Some thoughts…
Choose your customers (bosses) wisely, and you’ll be happier in serving them.
Set your hours in advance, and do what you can to stick to those hours (most of us work too much and are less productive the more hours we work).
Involve your friends and family in your business, not in a way that gives them control, but allows them to interact with you at work.
Expect some luck to come your way but work as if it may never come.
A little bit of luck never hurt anyone
Great insight. Choosing customers may seem like a good idea, but when you’re broke, chances are that you’ll take anyone, anywhere.
hmm good post, one should always realize when starting a business (at least from my experience):
-you dont get something for nothing ie you have to be prepared to make sacrifices be it time or money or your social life, or all of the above!
-start a business when your young, inexperienced and have nothing to lose, not when your a 6 figure senior manager with a wife and kids and all the experience.
- overcome your fear of failure, or dont even bother.
-its f#$& work, dont be lazy, consistencey is key.
evan williams struggled with his first company that eventually became blogger, almost going broke, but he dident give up and achieved success, which allowed him to leverage that success into bigger success.
The idea being that your first “business” dosent have to be some 20 million dollar a year lightening in a bottle like twitter is. Baby steps, like with Neil and advice monkey, then acs, then pronet, then crazy egg, then kissmetrics. Now hes a rockstar. As long as your a smart person, (and most arent) there is no reason why you can’t achieve success.
You know my story
Ideally, you should go into any business you take on 100%, but realistically, you must work your ass off.
You only need three things to succeed. Critical thinking, perseverance and effort. You don’t have to be smart, have talent, have money or anything.
With critical thinking you can develop a smart game plan for virtually any situation.
With effort you will see that plan through with an added drive.
With perseverance, you continue to move forward, even when knocked flat on your face.
The reason why most businesses fail is that most of these traits are not things that can be learned. Some people have them naturally. They must be nurtured and developed over time if you want to acquire them.
Add that to exactly what David said in a comment above and you will succeed.
Great insight Sherad. You’re right, you don’t have to be a genius to become successful and make a lot of money. Perseverance itself is HUGE.
At the moment I work. I like working because at the end of my shift I can go home and not worry about how the company I work for is being run.
My online earnings are made through blogging and to be honest I’m not pushing my online efforts because of what you included in your post.
Interesting. It’s definitely a safe bet for now, but continue to prepare whatever your plans are for the future.
Neil,
First, I love this post – I think many people who dream of being their own boss have no ideas that it has the potential to be even more stressful than a job.
Second, it’s true that if you don’t have a clear vision of how you want your business to support your life, it can run your life. You can end up serving the business, rather than having a business that serves you.
Third, because starting and growing a business can be so stressful is exactly the reason why I created PebbleStorm and CEOFlow, to help me and others ‘make money through enjoyment’ and keep the enjoyment going even as a business grows
If you prioritize growth and revenue at all costs (and above happiness), being a CEO is the worst and loneliest job in a company. But it doesn’t have to be.
Rock on!
Aaron
Well put Aaron, thank you for the insightful comment. You’re right, it doesn’t have to be, but it will be like that for a long time. Too many people get involved and claim their reign to be different, unfortunately it ends up being the same as everyone else, a struggle.
Neil/Aaron,
Neil, thanks for the TRUTH behind the ROI on some of the successful exit events.
Therefore, should we prepare for the marathon vs. a 5 to 10k for our start-ups to reach an exit?
If so, I agree with ideas such as what Aaron is pitching. These strength builder (or stress reducer) personal or group programs can help the entrepreneur cross the finish line with a “kick” and they won’t be the only one there to enjoy it.
Example for me. I’m now working out 3-4x a week and book it (and honor it) just like a client appointment. Results = more strength and better attitude working the start-up.
From a 7 year start-up that works with start-ups and still kicking…
Aaron, I’d be interested in a short call soon. I’ll track you down.
This is a good article and it could not have been at a better time. With the economy so bad and many people without jobs. Many are thinking maybe I can do it on my own and make it big like, Shoe, Niel, or fill in the blank. You can and you should try but have no false hope or promise. It is hard to make it online and it take more than most are willing to give.
People might be better off buying an old domain and trying to fix it or monetize it better than to start from scratch.
Why is it that so few people make money? Most people rush into an Internet business ill-equipped to be successful. They have neither the knowledge nor the resources to run a money making operation. Unfortunately, most people fall prey to get rich quick schemes that promise millions for little or no work. These types of programs are almost always destined for failure.
People rush to find shortcuts. Most people fail online simply because of that.
That and people make it look easier than it is. I wonder what the percentage of internet companies fail in the 1st year. I need to go look that up.
It’s like any other business, over 90%.
Well, don’t jut buy a domain and try to create something. Get an idea, test it, then go after domains etc.
I wasn’t implying to just go and buy any domain, but you would be better off to buy an existing one and then build it better than the 1st guy. Provided you have done the research and have a good idea for what the demand will be for whatever it is you are working towards.
Maybe I didn’t word that correctly?
“By no means am I trying to tell you that you shouldn’t start a business. But before you pull the trigger, you need to consider all the negative aspects and not just think positive.” – this is definitely right. We should look at two sides first before pursuing something. The pros and cons.
Thanks for this great article. It helped me a lot.
Exactly, so only move forward if you can clearly outweigh your cons with your pros.
Thats a fantastic article Neil.. You are right on saying that starting a business is not a piece of cake. You are definitely going to do huge amount of sacrifices at the start of your business journey. Its not like if you are so much successful then others start imitating you and they will also get huge success. What I believe is it depends upon the amount of handwork and smart work..
It is a lot about hard work and smart work indeed. They say that imitation is the best compliment though
Starting a business is always full of risks so you should take both aspects into consideration (failure and success. From my experience, i know that optimism will drive you forward in business but being too optimistic has its drawbacks as well…
hmmm, interestingly put. Too much optimism may prevent you from viewing reality, so yes, you’re right.
Neil,
I’ve answered many questions regarding starting a business the same way. Redapt has been around since 1996. I can’t even describe the amount of issues I have to deal with that aren’t related to making a profit. Health Insurance, Taxes, Bad Employees, security, software licenses, associations, commercial real estate, collections, etc.. The list goes on.
There are a million ways we could have failed. In business and in life, you will always face problems and adversity. Good business people have an ability to recognize problems and persevere.
BTW, thanks for taking some time to help me last week. Another good quality of a successful business person is to be ask for help when you need it.
No problem David
Good one, here’s what i have to say about it.
Guess people don’t realize their strong point’s when they are running a small business they just want to get cash from every possible direction which in my perspective never happens. So they fall in various schemes which never work and after a year they are in debt and have ruined their life and a couple of others.
You’ll begin to notice that this apparently happens quite often in life. People keep looking for shortcuts, never find it, and then complain about why they haven’t “made it” yet.
Yep. Get to reality bro. Just wish some beginner doesn’t read this we don’t want to scare them off.
Having own business has lots of benefits also…I am now taking more money monthly than my mom’s and dad’s salary combined.
You can also automate your business and be your own boss, think of Tim Ferris.
However, when we look at reality, all of the things you said are true.
About competition though…some might be scared off but this is like perfect for me..I am motivated by competition so imagine the feeling when I see people over the entire world being my competition
Yummy :0)
Lol. That’s exactly the type of mindset and attitude one must have to make it!
It is always better to work for your own. If you do a good planning, have a business plan and be organised, then there is nothing better working on your own.
It’s a smart idea however to have a very solid business partner.
I’ve always wished someone would be able to give a little bit of the ‘other’ side of things to balance out the Rich Dad Poor Dad picture. This is a great way to shake those wide eyed persons who just think it’s all going to come so easy!
Even though those “rich dad/poor dad” guys don’t necessarily say it’s easy, they do paint the picture easy enough for you to be sold on a dream. I do understand what you mean though.
Neil,
Nice post dude.But can u enlighten more on how to manage family and business?
You need to create a schedule with your business and personal life combined, not separate. Start with that.
You make it sound as if there is some law set in stone that you have to make enormous personal sacrifice and lose all your hair to have a money making business that replaces a W2 job as an income source. It’s just not true.
I just started up a outdoor pretzel and lemonade stand (I know, grow up right?) at the mall on weekends for a couple hundred bucks- I work for 5 hours and pull in $1000-$2000 profit like clockwork every Saturday. Yeah not a ton, but I’m doing better than everyone else out there slaving away because they read your blog and think there’s some law that says they have to lose money for 3 years and only have a 10% chance of making it. And on an hourly basis, I’m making more than a doctor or lawyer. Selling LEMONADE.
But you don’t see the vending biz get attention, it’s just not as sexy to the internet marketing crowd trying to start the next facebook or Google Cash affiliate scheme while they get evicted and have to move back in with Mom.
I hope more people keep chasing the dream of trying to start another facebook, otherwise they will wake up and realize that boring businesses like vending are where it’s at I’ll have more competition. Which will leave me less time during the week to go around making love to all your neglected wives and girlfriends
Alex, very interesting hustle. Just curious, which mall is it? I can relate to your business, as I invested in vending machines and coffee/tea machines at company offices. But I think what Neil was getting at was building a multimillion dollar business– There’s quite a lot more sweat equity involved with the latter.
Your definitely doing really well at what you do that’s fantastic! This post more refers to people who are interested in building a “big” businesses. Sure if people have the next “big” idea, go ahead and pitch it to the right people. In this economy, it’s tough and if people think their half-ass ideas are going o make it, they should wait a bit longer.
TOTALLY disagree with your comment on being successful more than once. The success of the winners like Ev, or Steve Job (Apple, Next, Pixar) are based on characteristics and perhaps resources. In fact, there is an unfair advantage they usually have, which makes winners MORE likely to succeed on subsequent ventures.
But with the better successes, they often retire, or their subsequent venture becomes less business oriented (sometimes low key).
You named 3 people, and you can probably name a handful of other ones, but the truth is that it applies to most people, obviously the top 1% group of everyone in the world is a small percentage, but still a big number.
New Jersey:
“Do you want to start a business? You get to be your own boss, set your own hours, and potentially even work from home. Doesn’t that sound great?…When you work at a 9 to 5 job you have one boss that you have to report to…” yadayadayada
Neils experience is the multi million dollar category, but this post is oriented toward the “fire your boss” people who currently have jobs and are thinking about venturing into self-employment. Otherwise he wouldn’t be comparing to 9-5 vs self employment.
I hate to say it but the recent PA gym shooting should give a lot of people pause who think it’s acceptable to throw their personal lives in the trash in pursuit of any objective. That guy was a loser and a psychopath obviously for killing innocent people, but it certainly reminds us there are many currencies in life outside of the mighty dollar.
Alright I’m spending too much time online, especially reading blogs, especially this one. It’s just too damn good (Kudos Neil). Time to go sleep with more neglected entrepreneur girlfriends & wives (daughters too, yummy!), ta ta!
You have an interesting take on this, lol. This is supposed to simply SCARE most people who think its super simple to just start their own business, especially in this economy.
I can’t say I agree with everything you’ve said about starting a business, but it does require sacrifice, that’s for sure.
Sacrifice is HUGE. That’s probably what most people aren’t willing to do.
You usually fail twice in any business before you really succeed. Failing doesn’t mean bankruptcy, it means being wrong and paying for that mistake.
The alure of entrepreneurship is like a treasure hunt. You have to be committed over the long haul and it has to be in your genes… it really isn’t for the fainthearted.
Many people get or are forced into entrepreneurship for the wrong reasons. There are millions of people turning to entrepreneurship as a way to pay their bills after the job they thought was stable dissapeared.
Here are my suggestions.
1. Surround yourself with industry experts to pick apart your business idea/plan
2. Conduct a detailed market analysis looking for reasons why the business WON’T work as well as why it will
3. Build a real financial model with income statements and revenue projetions based on advertising returns so that you can see if the idea can actually be a profitable business.
If you can get over these three hurdles you will have a much better chance of succeeding.
Those are all fantastic points David, clearly you know what your talking about
. It does take commitment and the willingness to know that you probably will fail, but you must get up and keep pushing strong.
I opened my own art gallery made a fair bit of money but I was working every hour that god sends and then some, hard work, sold up and now enjoying a decent wage working for someone with all the free time I need
Hard work definitely has a tendency to pay off
Darren i disagree with your ideea becasue working for your self is much nicer than for other and beside in my opinion what is the thing by passing life and do not risc something at all. Just think of this like a game, becasue if we think a little deeper this is just what it is.
Bigger risk bigger reward, no doubt. Also, I think it’s a fantastic idea to look at everything as a game, it makes work a lot more fun and enjoyable
I’ve been on both self employed (owned my own business) and working for others. In all honesty, I really enjoyed being self-employed. While it was very challenging and had it’s ups and downs, I never regretted it. Having returned to working for someone else, I’m beginning to feel that I was more satisfied working for myself. The jury is still out.
Working for yourself is probably always more self fulling, but as you said, its a hell of a lot more work. Depends on your goals and dreams, you can figure out if its a path thats worth it for you or not.
In my opinion, you should definitely start a business if you are coming out of college or are young and just starting your career. If you already have a stable job, you can try starting a business after-work.
Its better to have something stable first and then work on something on the side, well in this type of economy at least. The expection would be if you’re already rich though
But I can imagine having a job could suck all the energy out of you if you’re trying to start a business. At least, that’s what happened when I was at school. I was bringing in a fairly decent income, but spending 6+ hours per day learning mostly about things that were irrelevant really sucked the life out of me.
Business suck out energy like a vampire. Time is never on your side when you’re running a business. Learn the skills necessary to change that as quickly as possible or else you’ll just constantly be drained.
I have to agree with you John. It makes it a lot easier to start a business just coming out of college when you are already poor and don’t have a family that is dependent on you. It’s so hard to try creating a business in off hours. I can attest first hand. I wish I would have taken the risk when I came out of college and could have always taken a full time position somewhere if all else failed.
It is very difficult, no doubt, but the rewards can easily outweigh the risk. It all depends on how passionate you are about the project.
Some of my first business ideas where ones I didn’t think through enough and ended up paying the price later. You really have to know what your going to do before you do it, or you set yourself up for failure.
It tends to work that way for some reason
. Well luckily you’ll be able to learn from your mistakes if nothing else.
I’ve failed just like you have in a dozen or so businesses…. and all I can say is this quote by Edison:
“I have not failed. I’ve just found 10,000 ways that won’t work.”
lol, that’s one of my favorite quotes.
I have a mixed feelings about this. Being your own boss would mean running an empire like Microsoft or Apple. Even they have to face problems at times. This would be more about any individual’s choice. For me I’d really love to work for a big company where I get the opportunity to implement my ideas or else, I’d be happy to run a company with a few good investors.
Who said being your own boss would have to mean working for a Fortune 100 company?
You can be financially successful (or stable) being your own boss running a 1-10 person team.
In my opinion, and as is my approach to life… Less is more.
I have to agree. You can be very successful in the right niche with a smaller company or team. Before I sold it, I owned a very successful gun holster company that consisted of a 5 person operation. It developed a very niche based following and performed extremely well. Before anyone asks, I sold as I received a very nice offer from a larger competitor.
Being acquired by your competitors is amazing and ultimately the goal for many entrepreneurs.
right, well it obviously depends on different situations and various circumstances.
Too many people are out their chasing a dream that has been created a million times already. Doing something unique and different is one thing but “making money online” has obviously gone too far.
I don’t think enough people realise just how much of a change running your own successful business will make to them and I don’t mean in a good way! You alluded to the fact that making the tough decisions “will make you feel like am asshole” well unfortunately when some people become successful they actually BECOME assholes with the power and the money they attain.
More often than none, you need to carry a certain of a persona that maybe ‘asshole-like’ which is required to show authority. Authority is obviously necessary to run an effective company.
I think having to fire someone who you’ve grown close to has to be one of the worst parts of running your own business. I know I don’t want to do it.
You are right about how you will have multiple bosses, at least in the beginning. But as the company becomes profitable and grows hopefully you can delegate responsibility to employees.
This is outlined in some degree in the book The Emyth, which is a must read for anyone thinking of starting their own business. It outlines how to work on your business instead of being a slave to it.
Firing someone is definitely not an easy thing, but it’s important to place your emotions aside. Just make sure you’re a powerful communicator and the person your firing can take the even in a positive way.
Thanks this post. I love it but in my view , eveybody wants to be own boss but sometimes this is risky.On the other hand,if you work at other reliable company,you can take money and dont need to think the future of company.
No necessarily, but it’s definitely not as stressful, which obviously puts a limit on how far you can actually go.
Neil,you are exactly correct but a guarantee salary is very comfortable,specially if you work in official(goverment) company so it is better and enough for me.But, if you want to make big money maybe it is not enough for you ,my aim is just a relax life,not stressful
It is comfortable, no doubt. Some people are complacent with what they have and that’s perfectly fine. Many others aren’t, and they want more. It all depends on your goals.
Dear Neil Patel,
Do you know the difference between liabiliti and assets?I’m sure you don’t…read first Rich dad-poor dad from Robert T.Kiyosaki.
Then you will understand what an Entrepreneurs are.
I think you are what you are because you want to be what you want to be!
Rich people have more expences and less income and poor people have less expences and more income.
If you can understand this than you will be very rich and wealthy.
Good luck
Kind regatds,
Mr.Z.Kazlevski
I do understand and it sounds “good”, but is it really? There is just so much to explore in this world, but there’s obviously a price you must pay for it.
Not all people are fit for the job. There is a lot of knowledge to be learned before operating a full time business.
Most people aren’t fit for a job. That’s why most people who go in a field that can potentially make you a lot of money… quit. The ones who don’t, usually make it.
You are right about having to be an asshole. When my clients are trying to get a cheaper deal and trying to push me against a wall and demand I give them a discounted rate or they’ll find someone else to do it for less, I have a tendency to just give in. I’ve been working on saying no, and it’s hard. You want your customers to be happy, but you want to be able to eat at the same time.
Well there are times when it’s okay and times when you need to just be stern about your position.
Darren i disagree with your ideea becasue working for your self is much nicer than for other and beside in my opinion what is the thing by passing life and do not risc something at all.
Just think of this like a game, becasue if we think a little deeper this is just what it is.
Working for yourself isn’t as what’s its cracked up to be… That’s because the idea of working for yourself sounds so enticing.
Hey Neil,
I think you should also mention some of the reasons why you should, even though the chances are low…
You can become very rich, comfortable, and FREE! You don’t have to work for the boss anymore…
Sadly, most people will never achieve this because honestly it’s a ton of work, and I do mean a TON!
Sincerely,
Jay Jalodomisa
It’s more work than most people who’ve never experienced can imagine. If you browse around Quicksprout, you’ll find plenty of articles that give you advice on starting your own business. Talking about why you shouldn’t is just a way for people to hold enough until the market get a bit better.
Anyone who thinks life would be much easier after starting your own business, is naive.However, the way I look at it: instead of working hard for someone else work hard for yourself.
Thank you..
Yes… and it’s actually much harder than you can imagine considering that the lesser accountability you have, the less likely you’re going to work.
Really solid advice! It is nice to hear from someone who’s been through the entrepreneurship tumble dryer and come out the other side. Starting up has been full of it’s ups and downs but rewards make it all worth while.
It definitely helps to hear from someone who has gone through the ups and downs… Just make sure you avoid as much as possible making the mistakes that I have.
It’s actually FAAAAR from overnight. It could takes years and years of painfully hard work.
You probably will be miserable, unless you love what you do ;D
Good point.Have realistic expectations for your business. Expect to start out making a small amount of money, but insist that your business grow each month. If your growth rate is stagnant, find out why.
By the way “it’s = it has” also