I was listening to someone on the radio last week talk about the unemployment rates here in Canada. The point being made on the radio is that the number of people out of work was about the same as the last couple of years, but it didn’t take into account the number of people who are back in school because they couldn’t find a job, those who have stopped looking altogether, and finally those who are now starting up their own businesses. And that got me thinking.
Now finding a job is pretty hard work these days, but running a business? Running a successful business is even harder still. The general problem for anyone considering running a business is that while you may have a great deal of experience as an employee working for someone else in a given field, you probably don’t have the required skills at the moment to launch a business that will survive beyond a year – two at the maximum. And that’s not because you’re not bright, it’s because you haven’t had someone teach you those skills required to be solely in business for yourself.
And I think the above two paragraphs go a long way to explaining why so many new businesses close relatively shortly after opening. That’s a statistic that is also generally available and I suspect is pretty much true in other countries as well as Canada.
But it’s understandable isn’t it? I mean you try to get a job in your field working for someone else but you run into rejection after rejection. You may be tired of being laid off or are angry about getting fired, and so you eventually decide you’ll never be laid off again or get fired again if you are working for yourself. And so, the thought that started out of those experiences grows and you decide to open your own business.
Motivation for starting your business is very important. You are generally advised not to start your own business if you are expecting to make a lot of money immediately. Making money for most takes time; time spent launching a business, growing as you build assets up and of course it takes money to make money.
But running a business takes skills that you may or may not have at the moment. If you are fortunate enough to be employed at the moment but have an entrepreneurial bent, you should pay for courses available to learn how to run your own business now. Think of these courses as an investment in yourself, and like any investment, it’s designed to pay off in the future not the present.
If you are unemployed, resist the urge to prematurely launch your own business before you are ready. Hanging up an “open for business” sign is a huge mistake if you aren’t really prepared for it. And you only get one chance as a small business to make that critical first impression on your targeted customers.
As a business, you’ll be selling a product, a service or possibly both. You’ll need to have funds available either through credit or cash on hand in order to accumulate enough stock to fill orders and requests. People are going to need to know you even exist, so you’ll need some kind of advertising campaign, possibly involving literature, and you must have a distribution method to get both your advertising and your products out there.
Additionally, you’ll need to have the capability of accepting payment in a variety of methods depending on the scope of the business. Cutting lawns or shoveling snow can be a cash only business, but most businesses today rely on debit and credit card payments. And of course you have to understand you won’t get paid in advance likely for your work or products, and people generally are now used to having 30 to 60 days to actually pay for things. You can give them a bill today for services rendered, but it may sit on a counter at home for weeks before someone pays it, and even then they may or may not pay at all.
There’s a lot of upside to running your own business, but the upside is too obvious or it wouldn’t be so appealing. Hence I’m not really focusing here on the pros vs. the cons of self-employment. But it’s important to acknowledge they exist. But don’t turn on your blinders to the cons, or they will rise up and bite you so hard you’ll pack things in and be right back where you are today – poorer but wiser it’s hoped.
It’s far from fun running a business. While you may look forward to actually putting your product or services into the hands of your customers, and get real satisfaction out of doing things your way with no one to supervise your work, you have to realize you’ll need to devote time to the other things you didn’t have to do when working for a company run by others. There are taxes to collect and remit, paperwork to be completed, risks to be contemplated and managed, networking to be undertaken, ledgers to balance, complaints to be resolved and relationships to nurture.
Self-employment may be exactly what you need if you are unemployed, but realize you will be working harder and longer than ever before. Go in with your eyes wide open!