Each year, thousands of individuals decide to give up working for “the man” and set up their own businesses. While it’s true that many of us have the entrepreneurial bug, only a fraction of new startups survive their first 12 months of trading. The sad truth is that many folks new to the business world aren’t aware of what it’s “really” like to start a new enterprise.
Sometimes, individuals decide to try their hand at entrepreneurism because they can’t get a job. Often, they’ll have little to no capital to invest in their startups, but they assume they can easily get funding. However, what they don’t know is that there are some harsh realities to starting a business when you’re broke. Here are nine examples that you may not know of:
You won’t always make a profit from day one
When you’ve got limited money in your bank account, you need to get hold of some cash fast. Otherwise, you could end up in financial turmoil! Some people see starting a business as a way to make money fast. Unfortunately, few people manage to make a profit from their first day of trading. Check out this article from Forbes on the subject.
It’s not always possible to start a business with nothing
Sure, there are many niches where you could start an enterprise from home without the need to buy anything. For example, if you’re a web designer and have a PC and the right software tools, you’re ready to go. But, there will be times where you need to pay out for stuff.
For instance, retail startups will need to pay for stock in cash as few suppliers will offer new businesses a line of credit.
You’ll find it hard to focus on long-term goals
If your desire to work for yourself is to earn money immediately, you’ll lose sight of your long-term plans. For instance, you may wish to hire staff to work with you or expand into other niche areas in your industry. By not investing any profit back into your business, it’s unlikely to grow at any real rate.
Your debts could hold you back from having a profitable business
Entrepreneurs with a lot of debt could find it hard to get capital investment in their businesses. In other words, investors might think you are a bad risk and be unwilling to lend you money. In such situations, it’s better to look at reducing that debt before starting an enterprise.
Service providers like Money Expert could help with options such as debt management plans to reduce outgoings. That means you could have more spare cash to invest in your business without the need to borrow anything.
You’ll feel alone
Sadly, some people feel ashamed about the fact that they haven’t much money to their name. As a result, they won’t feel like socializing or networking with other people in their industry. That can make new startups feel quite lonely in the business world, as they may feel that their bank balance is a measure of their success in life.
It’ll take your business a long time to grow
It’s no secret that some growth opportunities in the business world demand a financial outlay up-front. If you miss such chances at building your startup, you could find it’ll take some years to make your brand well-known in your industry. As a result, you’ll have to work long hours for sometimes nothing in return just to keep things going at a profitable level.
You can’t afford to buy cool stuff
As a business grows, it will need to spend money on new equipment and machinery. Even digital businesses need physical products like computers and other tools to help them stay at the forefront of their industries. When you start a firm with hardly any capital, you’ll have to wait longer before you can afford to buy any “cool” items like gadgets for your business.
You’ll miss opportunities to work with large corporations
Even if you’re just a one-man-band, it’s still possible to work with businesses bigger than yours! The thing is, if it’s evident you haven’t invested in your firm, those large corporations may overlook you for your competitor. The thing about starting a new enterprise is that image is everything. If you don’t portray the right one, you’ll miss some lucrative opportunities.
You’ll be under enormous stress
Last, but not least, trying to run a business is often quite stressful. In fact, doing so on a shoestring budget is likely to impact your personal relationships and make life harder for you. No-one is saying that it’s impossible to start a company when you’re broke; it just won’t be plain sailing for you.
Thanks for reading today’s article.