10 reality checks about owning a business

This is the first of a series of business tips that I felt I should share, all from experience, of course.

When The Apprentice and I first started NVGOR8, we had a dream. We would do things no one had done before, we would be the best in the industry in Uganda. Heck, we would change the industry.

The good news? We did all that and more.

The bad news? Nothing in this world had prepared us for the rigors of running a business.

We all have that look in our eyes every once in a while, the thought of being your own boss, working on your own terms, doing things your way, having fun and getting filthy rich while at it.

Well, before you quit your day job and paint a “Now Open” sign across your home gate, or pimp up your garage with 32 inch monitors and a desk, or squander your family fortune on that gold-digging business, take a brief moment for a small reality check.

I give you, 10 reality checks about owning a business:

Reality Check 1. Not everyone is meant to own a business.

Face it, it’s a fact. Some people are just better off being employed. It’s not a bad thing, it’s about accepting what you can or cannot do. Owning your business can be the most stressful thing in the world.

If you like comfort zones, if you’re too timid to go out and do marketing or promote your business, if you like the guarantee of a steady amount of money at the end of the month, if you like a decent 8 to 5 routine, if you get nervous every time you’re so broke you have to walk or skip meals, then I have one thing to say to you. Get a nice comfy job, work hard, save, etc etc.

Do not start a business.

Reality Check 2. You need to love what you are doing.

Or at least learn to love it. This one is self explanatory. Without that drive for your new business, you’ll be out of business in a few months. That drive, or passion is what will keep you going through the dry spells, and through the customer riots, and through the employee walk-outs.

Love your game, and you’ll play a good game, every time, win or lose, rain or shine.

Reality Check 3. Your business will make you a boatload of cash. But not at first.

Yes it will, eventually, if you stick at it long enough. And even then, most of it won’t be yours, unless you’re into bank robbery (in which case, please ignore this entire post).

You have to make sacrifices, in two major areas; time and money. You’ll find yourself spending all your hard earned cash in growing your business, hiring people, paying taxes, purchasing equipment. All these are expenses you did not have to worry about as an employee. The boss normally took care of them.

Well, guess who’s the boss now?

Reality Check 4. Business is a risk. You will make losses.

Depending on how you look at it, your first loss is your initial investment. A typical honest business will take about 2 – 5 years to break even. That means you need to make sure you have the money to keep in business for that long. And a solid growth plan.

Sometimes all it takes is enough money to keep restocking, like a small store. Sometimes it take a fortune, like a cutting edge IT business. Either way, it is a risk. Some you win, some you lose.

The first trick is to make sure you win almost as much as you lose. That is when you stop making losses and break even.

Next trick is to win more than you lose. That, right there, is called making a profit.

Reality Check 5. You will not be an overnight success.

A lot of the so called overnight success stories have been quietly building their businesses, working hard and long, under the radar until one day, they get a major breakthrough and they are all over the news. Just because you only heard about them today doesn’t mean they came out today.

Businesses, products and services have four major growth curves. See how Seth Godin explains it here.

Depending on the success of your product or service, you will see significant levels of success, but it will not be overnight. You will have to work hard, plan rigorously, lay strategies, market and do all those other things you never dreamed you’d ever do.

Reality Check 6. You are not your own boss, your business is your boss.

Unless you’re a non profit organisation or some sort of charity, you’re in business to make money, and not just money, you need to make a profit in order to continue running. Your business is like a new born baby. It screams for attention every single minute, and unless you attend to it, it will definitely die. Your previous freedoms are gone, your hassle free life is gone. Until your business reaches a point of stability, brace yourself to work harder than when you were employed. And that can take years.

And to put a human face to it, your customers are also your bosses. They will put more demands on you, and they do not care how many other jobs you have. They contracted you, you gave them a delivery schedule, and you have to honour it.

Reality Check 7. You have to work harder than ever because you do everything yourself.

Okay, every one knows this, but not quite. When you start out, because you’re new, you probably have a few orders, so you work less and chill more. As your business grows (that is if you want it to grow), it becomes more complicated. You have book-keeping to take care of, taxes, payroll, rent, utilities, legal, human resource, outsourcing, procurement, etc.

Unless you’ve been in a senior management position, nothing prepares you for the shock of having to deal with all this. And unless you have tonnes of money or business partners with skills in these areas, you will have to do everything yourself.

Reality Check 8. Goodbye social life, hello stress.

Many people think by owning their business, they will have more time to themselves. Wrong.

If you’ve been paying attention, you’ll realise by now that owning a business demands more time from you. While your colleagues are out there partying, you’re in office looking over financial statements or fussing over an unfinished order, or panicking over an unbeaten deadline. Yes, you the owner.

If your employee messes up your tax records, who takes the final beating? You. If the debt collector comes calling, you can delegate all you want, but ultimately, you’re the one left holding the ball. Also remember your own personal problems are not going away simply because you started a business.

Put it this way, when you were employed, you had to deal with your own stress and issues. Now you own the business, it’s the equivalent of dealing with your stress, plus the boss’ stress.

Reality Check 9. Your business partner could end up being the person you hate most.

I was blessed to have one of the best business partners I could ask for. You need someone who will understand the situation, and share a laugh on the long walk back home. Make sure your business partner understands your goals and visions, and believes in it enough to share the hard times. They also need to be able to put in their fair share of hard work, or else they will bring you and your business down.

If their first priority is to get rich as fast as possible, then let them go. Your priorities should be your products, services, your customers. Only then will you get rich.

Reality Check 10. Owning a business is the best business experience you could ever ask for.

If you decide to choose to look at it positively, you will learn a lot, you will fail alot, but ultimately, you will be a better person, even if your business collapses completely. The stuff you learn cannot be taught anywhere else.

And yes, you will have the time of your life.

—

Offtopic:

To turn really interesting ideas and fledgling technologies into a company that can continue to innovate for years, it requires a lot of disciplines.
- Steve Jobs

Nobody talks of entrepreneurship as survival, but that’s exactly what it is and what nurtures creative thinking.
- Anita Roddick

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