The hard truth of starting up your small business.
You may have a fantastic reason for starting up your small business, this may be one of them.
Let’s say you are a relief driver for a reputable courier company, and you are working 70 hours a week, starting work at 4am and finishing at 6pm during the week, 6am-12pm during the weekend.
You dread the Christmas period as you would start at 4am and work through until 10pm for the 3 weeks before Christmas and the week after Christmas trying to cope with the huge influx of presents.
Every month the van you drive would break down and it would need a new clutch or gearbox, you would have to tell your boss that he needs to hire another van as well. He would often let a few choice words at you too.
You do not know how you keep taking on this crap while earning minimum wage with no prospect of a pay rise or promotion, you then start to look for other work but there is few and far between.
This seemed to motivate you to kick off your own small café / sandwich shop using your father’s recipes from generations of old.
Sounds Cool eh? The hard truth of starting up your small business may not be cool in the beginning but it will be.
Lets be realistic, there is something that is driving you to kick off your start-up, maybe it’s the following forces that are driving you to building your start-up
Your job really sucks because:
- Lack of income
- Over worked
- Toxic environment in the workplace
- Lack of promotional prospects
- Just bored of doing the same crap
- You are wanting a change in your lifestyle because:
- You want to provide the best for your family
- You need more income
- You’re wanting to set your working hours any way you want.
- Because people said that you can’t and you just want to prove them wrong
- You see an opportunity where you could prosper by doing what you love and earning money!
The best thing about starting your small business
- No legacy issues. You don’t have any pre-existing issues that is affecting your small business performance
- You can start from scratch and mould it into anything you heart desires. This is going to be EPIC and it is your creation and you’re not piggy-backing on someone elses.
- You’re able to pick any business structure you want! Go solo or go hard with the limited liability company. Each one has different pros and cons.
- Being your own boss. You don’t have to answer to no body! You set the terms of your business and any employees will answer to you.
- Flexible hours, because you’re the boss, you can work from home or just work 2 hours a day. Bloody awesome right?
Well in some ways this may not be as freeking awesome as it sounds. There is a few hard truths about starting fresh that you need to be aware of.
The hard truth
No one knows you exist
Let’s face it, going online for the first time, smashing up a Facebook page and a website as well as registering your business is only the tip of the starting point.
Your ideal target audience wont know you & your business and it is going to take a lot of hard work for them to get to trust you, let alone buy from you.
You haven’t had any exposure so in theory you are going to have to work your arse off to try and get customers to buy from you.
Lack of business street smarts
Quite often people slap up a start-up with a basic templated online business plan or simply just wing that shit, hoping that the heavens will bless them with entrepreneurial prowess in the current marketplace.
This is where 67% of New Zealand small businesses fail, simply because they do not have a plan of action that is specific, measurable, achievable, reachable & timed specific (SMART for short).
Lets be frank, doing a SWOT or TOWS analysis is great but it is simply not enough. You need to be ready to go to war to capture the market share landscape, smash your client’s doubts and own the competition.
The marketplace is an everchanging battle field and you must have a robust battle plan to plan and take action as well as react and dominate to have an edge on any threat and take any opportunity that opens up to your small business.
So many just don’t have a plan that is unique to their needs, and without one they fail and this can be detrimental to their business survival.
We can develop one for you, just ask.
Things are bloody expensive!
All good things cost a shit load of money if you’re not careful, starting a website from scratch with no knowledge and relying on a developer to build a site, host it and maintain it can cost thousands to start off with and then maybe thousands per year in maintenance costs.
Let alone you risk having your own website horror story if you put this in the hands of someone you don’t know.
There is also the cost of setting up, accountants, lawyers, building lease and more.
Doing a break even analysis will help you figure out what your financial viability will be (ill be doing a master-class on this later).
Planning for these costs will make things easier but not having a strategy on managing your costs will have a detrimental effect on your small business.
So many people do loose their homes for being negligent in this area but with the right tools and foresight you can work this to your advantage.
A lot of Cowboy experts
As soon as you start your venture, eventually you will ask for help, mentorship & you will start to look at what you can afford. So many newbies to the business game fall into this trap every time and end up paying dearly to con-artists that take advantage of the fact that start-up businesses cant afford much and promises them that they will gain more income within 2 weeks and need to pay a one time fee of $499.95 to pay for their media advertising package or some crap like that.
I had a geriatric cocksucker who promised to host & maintain my site for 30% shares in my company. All this cocksucker did was sit on their fat arse eating KFC and spitting crap about their personal life.
You need to be careful of the cowboys in this realm and not be scared to pay top dollar for good old fashioned advice & services from reputable experts.
What? Where is my money!
Don’t expect to be rolling in dough anytime soon, 72% of small businesses don’t break even for the first 6 months to 2 years. The amount of profit gradually increases over a long period of time.
You will be spending a lot of your savings before you can spend your business income to satisfy your expenditure.
This is the scenario of the organic growth without a plan tactic, those that do invest in a unique plan for their business can reduce the 6 month to 2 months (1 third of the time). This is proven that a structured plan of action will reduce the waiting time for you to generate profit.
I recently put our aggressive development plan to the test as an experiment for one of our clients and we managed to achieve the break even in 1 month.
Your time will be sucked away from your family and friends, say goodbye to your social life simply because you will spend more of your time building & starting up your small business, fixing your start-up and getting it running to the optimal standards that you set.
Your family, friends and those you love at some stage resent the fact that your spending time on your business rather than them.
Investing into time management is key. Learn it or pay the price.
Lets be honest, starting up your small business will not be easy
To be honest, starting up fresh can be fucking brutal at times.
I almost got divorced, family got worried and also my studies took a horrendous toll at times.
There were a lot of tears over hidden expenses, I even almost got bankrupt and fell victim to a cowboys antics.
You end up stressing for months about the income and wonder when your going to catch a financial break as well as breaking even.
Although this shit was rough for the first year, I learned from various mistakes and learned from so many others in our business community.
You will learn and be stronger for it too. However, you are going to have to endure a lot of crap, experience a lot of hardship and learn from your own mistakes to enhance your own start-ups. If you stick to it, get help from the experts and learn so much from what you do and from others then you will love the experience.
Don’t make the same mistakes that I did with my first failed business (I lost 30k). Learn from the experts in our community, Get a strategy into action and thrive!
Because starting up should be exciting! Not constantly stressing out.