Six Real Truths About Starting Your Own Business
Starting your own business can seem daunting. Many people shy away from starting their own business because of fear of the unknown and not wanting to take the risk. But those that have taken the entrepreneurial path can attest that being your own boss can be very rewarding. This month at LTAW we will focus on entrepreneurship, from the basics on how to get started to personal testimonials from people who are currently in business for themselves.
I can’t believe it has been 28 years since I took the plunge to start my own business. I was 32 years old and really scared but I knew in my heart of hearts that it was the right thing for ME. I also recognize that entrepreneurship is not for everybody. I have learned volumes on my entrepreneurial journey. Here are my most important lessons.
- Being a little scared all of the time is a good thing. You don’t want to get too confident that you have made it. The slight feeling of “will I be able to keep this going” helps you to stay engaged, always looking for new ways to maintain and grow the business.
- All that really matters is cash flow. You have to do regular financial reporting in the form of income statements, budgets and balance sheets but these are static point in time measures. On a weekly or even daily basis you have to have enough cash to meet your financial obligations like payroll, taxes, and suppliers.
- Keep your fixed costs to a minimum. Most businesses experience fluctuations in demand. If you have a lot of fixed costs, the bills have to be paid even when the income is not flowing. Costs for physical space, labor, equipment, and other supplies can drain your cash during the slow times.
- Related to #3 is do not incur large amounts of bank loans. I recommend growing the business slowly and use the profits to reinvest and expand. Contrary to what you might have heard it is difficult to obtain small business loans even in the best economic times and it is certainly really hard now. Think of creative ways to capitalize your business that reduce your financial risks.
- Nobody that you hire will have the same passion and vision for your business that you do and will not likely have the same entrepreneurial tenacity. Don’t expect it and you will not be disappointed.
- If you decide to go into business with a partner, do so with extreme caution. Make sure you have a LOT of dialogue before signing a partnership agreement. Friendships have been ruined and families destroyed as a result of business partner disputes.
Be Your Own Boss!