While many books, movies, and TV shows have depicted the glory of entrepreneurship and starting a business, very few of them have shown what the process of startup up is actually like; running a new company can definitely be lots of fun, but it involves a great deal of stressful, frustrating, and downright unpleasant work that employees at an already-established company do not have to deal with. Here is a guide to ten things that no one tells you before starting a business for anyone that is considering founding a startup company.
10 Realities of Starting a New Business
1. You will have to work harder at getting people to like you than anything else
Although being your own boss will allow you to have much more control over your life and the people that you deal with, the beginning stages of a business’s life will involve much of the same undignified “networking” as the first few years as a new employee. The road to success cannot be traveled alone, and in order to ensure that the people around you want you to succeed and are willing to help you do so, it is going to be important for you to work hard for their approval/acceptance.
Although running a startup can be exciting, the rest of the world will most likely not pay attention to a small company unless it has already demonstrated its prowess in business. Because this takes time, you may have to kiss up to investors, customers, or other businesspeople whether you like them or not, just as all entrepreneurs must do at some time.
2. There are probably a thousand other people trying to do what you’re doing who, like you, think they are the first
There are a lot of people in the world, and pretty much all of them want to be rich. As a result, coming up with an idea that is 100% original is extraordinarily difficult, especially in the age of information when idea sharing is easier than ever.
This does not mean that it is impossible to develop new and innovative businesses, however; because of increasing competition in the market, the best companies are often not the ones doing something unheard of, but rather creating or offering their product or service in a better manner than before. For example, the idea of Facebook wasn’t entirely original as MySpace and other early social networks had already made it possible to connect with people online. But Facebook’s user interface and the extra services that it offers are enough to make it one of the strongest companies (with one of the richest owners) on the planet.
This does not mean that you will definitely not come up with something original, as it is entirely possible that you could come up with a product that was uniquely conceived in your mind. It is more likely, however, that your business will derive its success from the specifics of the product or the way that you cleverly run the company.
With enough innovative thinking, hard work, and good decision-making, creating a successful business in an already-existent industry is entirely possible.
3. Doing taxes and paying bills is dreadful, but hiring professionals is so expensive that you might just have to bite the bullet
Few things in the world are more boring than legal and accounting paperwork (unless your business involves either of these services, in which case we hope you enjoy it at least a little bit). Unfortunately, hiring a professional to do either of these things can be incredibly pricey, so many startup/small business owners opt to do them themselves.
While an accountant and lawyer are necessary for certain purposes, much of the work that a larger company might hire someone to take care of can technically be dealt with by the business owner/entrepreneur. Unless you are experiencing fast growth, attempting to franchise, or already run a sizeable company, hiring an in-house attorney or accountant is probably not necessary just yet- as awful as it can be, you would probably be doing your business a favor by simply buckling down and taking care of the stacks of paper that sit before you.
4. You will know true despair when the phone rings and it is a telemarketer, not the customer that you were hoping for
Even if your business does some cold-calling of its own, you will grow to develop a true distaste for those who solicit your business over the phone. When you pick up the phone with the hopes that you are about to make money and are instead met by the voice of someone who hopes to take your money away, you will begin to almost instinctively begin to slam it back into the receiver.In a world of brutal competition, you neither have the time nor energy to deal with people trying to tell you how much you need their product and as a business owner you are all too familiar with the loan companies or web design firms that have call centers working for them around the clock.
Rather than becoming truly angry, however, it is useful to think about the person on the other end of the line from a larger perspective; they are simply doing their job, and blowing up on them is not going to be any more helpful than it is to explode at a customer service rep for your phone company when the lines go out. In order to build up a reputation for friendliness and patience, it will serve you well to simply keep a cool head and continue on about your day (not without first hanging up on the solicitors).
5. Bank lenders will go from the friendliest to fiercest people you’ve met in your life the second their money changes hands
No, the banker on the other side of the desk is not giving you money because they care about ingenuity, like being a part of the startup culture, or hope to contribute to growth in the American economy; they want your money, and they want more of it back than they are about to give you.
While the people down at your local bank certainly might be friendly people, it is important to keep in mind that a loan is a business transaction about which the lender will be very displeased if they do not get the money that they are owed. Even if they are holding something that you own as collateral, extending money out to a borrower can make banks quite nervous. As a result, in order to preserve your credit, the reputation of your business, and the relationship that you have with the bank you are borrowing from, it is important to always ensure that only loans which can be repaid are taken out and that those loans are repaid on time.
By taking care of your outstanding debts, not only will you be securing the ability to continue taking out money when it is needed, but you will also be instilling confidence in potential investors that your business is able to handle its finances reliably. Being an entrepreneur is as much about the people who are funding you as it is about putting money in your own bank account, and losing sight of this fact can spell the end of the leveraged business.
6. The first time you see how much of your hard-earned money the IRS takes away, you will want to take your plot of land and secede from the United States
There is one day of the year that every single American is a Republican, and that is April 15. Taxes are no fun for anyone except maybe the people working at the IRS, and since they also have to pay taxes they probably don’t enjoy it either.
As your business grows larger and more profitable your tax rates will only increase, turning the IRS from an annoyance into your sworn archenemy (This would explain the countless “micronations” made up of business people with a strong libertarian bend that would rather divorce themselves from their sovereign country than fork over their profits.) Nothing is sadder to the business owner who has made $100,000 in a year for the first time and is excited to make a deposit into the bank than the moment when he or she realizes that much of his money will never make its way into their own wallet.
Additionally, depending on the structure of the business, more taxes might be owed due to the company’s status as a corporation that would be otherwise. Finally, the location of the business makes a difference as well, as it can determine whether there is a corporate/income/sales tax that will affect revenue. It is important that all of these specifics are considered before you actually begin doing business so that your tax burden is as manageable as possible.
7. Regardless of how perfect your business is, there will be customers who inexplicably view you on the same level that they do a used car salesman
You care about your business and customers and the last thing that you want is to come across as someone that only wants money and to rip off other people.
While many of your clients/customers might see this, there will always be some that are unsatisfied with your product and, as a result, see you as a scam artist who is simply out to make a quick buck instead of an entrepreneur who is building a company. Even if the goods or services that you provide are the best on the market, people will always find a reason to be unhappy and will criticize you accordingly.
While taking criticism from customers is important as it will sometimes help your business become better, when you encounter a customer that is simply angry for no apparent reason (or for a bad reason) you should address them politely while not taking their remarks too seriously. So long as you are doing your best to run an honest and high-quality business, there is nothing you can do to make people less likely to simply be unhappy with your product.
On top of this, things do go wrong – machine malfunctions, car breakdowns, computer crashes – so you have to learn to roll with the punches if your goal is to be the best business owner possible.
8. Making your first sale will, in your mind, dwarf the discovery of fire in magnitude to an immeasurable extent
You have worked hard to get to where you are, braving and handling all of the tribulations listed above and more. The culmination of all of the paperwork, brainstorming, and late nights involved in getting your business off of the ground is your first sale, which is bound to be one of the most memorable moments of your life as a business owner, no matter how small or trivial it is.
You have officially received confirmation from someone outside your company that your product or service is worth some amount of money, and that feels amazing – it represents the validation of all of your hard work. If things go correctly, this will be the first of countless deals struck with customers, but even if your business ends up on the Fortune 500 you will derive some of your strength from this moment. All entrepreneurs are driven by the prospect of growth, and this is where it starts.
9. Regardless of how many more ways you struggle as an owner than you did as an employee, the benefit of not being bossed around will outweigh all of the downsides
Sure, there are a lot of annoying things that a business owner must do that were taken care of by their boss when they were employed by someone else’s company.
Yes, the expenses that you have to pay now that you own your own business hadn’t even been on your radar before. But once things are under control and you are securely in business, being your own boss and having control over the destiny of your company is truly amazing.
You are doing what you love and not taking orders from anyone anymore, and although you might be working longer hours, they are hours that you can determine on your own. If the business succeeds, you can take credit for your victory and take home a sum of money that is likely far larger than the predetermined salary that you were paid before.
Starting and owning a business is a journey and can involve dealing with many bumps in the road, but a person who is a good decision maker and has a creative mind is almost guaranteed to enjoy the adventure of entrepreneurship.
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10. There are other ways to get funding besides the bank
Although starting a business can be a very rewarding process, it can also be an expensive one; getting paperwork filed, bills paid, and other miscellaneous costs covered can rip into a startups’ already thin savings account. Bank loans can take weeks to get approved for, if you’re even approved at all.
Factoring is a way that the business that you worked so hard to create can get the funding it needs to operate. Plus, it’s fast, easy to get approved for and doesn’t leave your company in debt. Don’t worry about pulling money out of your personal savings account to fuel your business model anymore.
Factor Finders can match your business with a factoring company that meets your wants and needs. Our services are free to you and take a lot of worry and stress off of your mind.
Ready to get started? Fill out the form below for a free quote:
Have questions? Just call us. Our factoring specialists would be happy to talk you through the process and answer any questions you may have.