A while ago, a coaching client of mine posed a question before me that made me ponder my own answer.
She had been in business for almost a decade and was wondering why the hell she did it in the first place. As we talked for the next 2 hours, her reasons only became more muddy instead of clearer. Finally, she made the decision to close her business and go back to a regular job.
While many of us start businesses for a variety of reasons, most of us do it because of family demands, financial demands or because we were forced into it (losing a job, etc.).
That doesn’t mean that we SHOULD start a business.
The statistics are against small businesses when they’re first starting. Only 50% make it as far as 5 years and only 1/3 make it to 10 years.
And the #1 reason for failure?
Before you get your hackles up and tell me off saying that “I’m an expert in ______”…………. just DON’T.
Doesn’t matter if you’re an expert in your field. That doesn’t mean that you should own and run a small business.
Take my client, for example.
She IS an expert in her field. She was laid off in 2001 after 20 years in her industry. So she started her business as an answer to what she called “Corporate Incompetence” that resulted in her being laid-off.
Her boss didn’t know jack about business systems, scaling, handling employees, taxes, or pretty much anything in the field they were working in. About a year after she was laid off, the company declared bankruptcy and closed — further proof of incompetence.
And although she was an expert in her field, she experienced a lot of the same problems and issues in her business that her boss had at her old company. It wasn’t that she didn’t know her field — it’s that she didn’t know about the REST of the business.
Then, a decade flew by. She’s no longer closer to her retirement goals — in fact, she’s further. She dipped into her retirement funds to start and occasionally maintain her business during tough times. She wasn’t able to pay herself even a third of what she was getting at her corporate job. And she had a lot of employee turnover.
All of this resulted in a lot of stress and financial issues, which ended up with her getting divorced. It also made it a lot harder for her and now ex-husband to put their kids through college because the divorce and business ate up a lot of funding. Then she started having health issues because of all the stress she was under, as a mom, during the divorce and as a business owner, having to make sure she could pay her employees.
And by the time she started working with me, she was completely burnt out. She was done. Even though she came to me for help in rescuing her business, I had to present some pretty painful facts; the primary one being:
She shouldn’t have started a business in the first place.
This was pretty hard for her to hear. But after a couple of minutes of discussion, she realized I was right.
The thought of a business was exciting to her. To be able to shake off the corporate shackles and have freedom. To beat the statistics. To fully live her dreams.
You know the saying, “The grass is always greener on the other side?”
That fits this scenario perfectly.
Because, to her, having her own business meant more freedom. More flexibility. More money. More recognition in her field.
None of which she got.
The grass was far more brown on this side.
So instead of coaching her on increasing sales and making more profit, we made an exit plan for her. She ended up selling the business to an employee of hers and re-entered corporate life.
For the next 2 years, she worked that corporate schedule and got her life back to where it needed to be. She even had a better relationship with her ex-husband and kids since she wasn’t so stressed! Her health got better and her finances stabilized.
After working for 2 years in the corporate world, she came back to me with a new business idea.
And before I would let her even think of taking on a client, we sat down and made a plan. We figured out what she needed to do first and created a blueprint just for her.
That new business idea of hers has paid off and her business will be celebrating 5 years this year. And she’s now making 2x what she did in the corporate job.
But over the past 15 years that I’ve been working with clients like her, I’ve seen a lot of times when people should NOT have started a business.
Being a small business owner can take a lot out of you.
You are ultimately responsible for EVERY little aspect of the business. From taxes, to forms, to hiring/firing, legal, fulfillment, marketing and more, you, as the small business owner, are responsible for ALL of it.
And it’s even harder when you don’t have the systems or people in place to help.
Now, not everyone wants to run a larger-sized small business (think 50 employees or more). Some people only want to do what they do best and not worry about expanding. And that’s completely fine.
But even to run a small, one-person business means that you have to get analytical. And if you’re a super-creative person that doesn’t have the right framework behind you, you’re not going to do as well.
There are forms to be filled out. There are taxes to submit. There are legal issues you need to cover. There are clients to invoice. There are vendors to pay.
And that’s all before you even get to renting office space or hiring employees.
There’s lots of books and information out there on starting a business, but none of them ask some of the really hard questions.
- Are you willing to work 100 hours a week starting up?
- How much can you invest financially into your business?
- Do you really need help right away?
- Do you really need an office, or can you use the guest bedroom or garage?
- Are you willing to sacrifice a social life while you get started?
- Are you willing to sacrifice financially to keep the business going in hard times?
- Is your spouse/partner on board and how can you keep them as a cheerleader?
- Can you replace yourself in the business?
- Are you willing to grow a thick skin to combat all the worries, insults and issues you’ll have to deal with?
- Are you willing to take the ultimate responsibility for your business like you would your kid?
- Are you willing to lose everything?
If you can’t answer these questions honestly, then you shouldn’t be in business. Maybe you would be better off working for a small business doing what you do best.
And even after reading this, you’re still interested in pursuing your business dreams — let me know. I’d love to hear your ideas, so come join my free Facebook group and let’s get your business going the RIGHT way!