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The Risks and Rewards of Going into Business for Yourself

The Risks and Rewards of Going into Business for Yourself

No one would deny that starting a new business is fraught with risks, but given the uncertainty involved why is it that the US sees over 500,000 new business starts every year? After launching and running several successful businesses, along with my fair share of duds, I’m confident in my explanation. Despite the potential pitfalls, entrepreneurs launch new ventures because the benefits can be equally if not more significant than the chances that something might go wrong.

Nonetheless, it’s up to everyone to decide whether the rewards outweigh the risks of going into business for yourself.

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Risks Associated with Starting a New Venture

Again, there numerous risks associated with starting a business. Here are five of the most common ones to consider before jumping in feet first.

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  1. Long and Erratic Hours. Whether you’re adequately funded and staffed or not, as a new business owner you can expect to put in many more hours than you would at a 9 to 5. In fact, you’ll probably work more hours than anyone else in your company and with good reason–entrepreneurs wear many hats. Plus, at the end of the day when all is said and done, as the business owner, the buck stops with you. So, the moment you start your new venture you’re signing up for long and often erratic hours.
  2. Many Ruffled Feathers. Again, long and unpredictable hours are often commonplace when starting a business. So, as you might imagine the hectic schedules that often come with entering a new venture often leaves little opportunity to cultivate what matters most–relationships. Hence, family and friends can often find themselves on the short end of the stick when you begin your new venture; therefore, it’s important to build breaks into your schedule because if you don’t force yourself to stop and smell the roses, it won’t happen.
  3. Unforeseen Changes in the Market Environment. Sometimes as entrepreneurs, we start businesses oblivious to massive shifts that are occurring all around us. Many of which could easily have the potential to negatively impact your new business concern. For example, I’ve seen so many sink tens of thousands into new storefronts only to be told by local authorities – after the fact – that upcoming zoning laws will require them to make expensive renovations to ‘stay within code’ or close their doors. Of course, you can sometimes offset these types of scenarios by performing your due diligence. Nonetheless, there are some changes that you just won’t see coming no matter how much planning and preparation you do, which is why you must factor a certain degree of the unknown into all that you do as a business owner.
  4. Lack of Management Experience. There is a notion that I’ve seen among many new entrepreneurs that if they hire good managers, the owner’s lack of management experience won’t matter. Unfortunately, as many find out this is often not the case because without the requisite experience, how will you be able to identify whether your managers are making mistakes. This inability to distinguish between wise or poor business decisions is why many business experts recommend that entrepreneurs take on management positions for someone else before striking out on their own.
  5. Potential for Financial Loss. Running a business requires careful budgeting and financial management. However, the problem with many entrepreneurs is that we tend to start businesses without understanding key management functions, like how to forecast profits and losses or create financial reports.

Our lack of financial know-how is often compounded by the fact that many new businesses start before they’ve had an opportunity to secure adequate funding. Hence, it’s not uncommon to see new business owners scrambling to find odd jobs to make ends meet. One way to avoid severe cash shortages is to set aside six to twelve months of personal expenses before starting your business.

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Rewards of Starting a New Business

While there are vast challenges that come with starting your own business, the rewards can often make up for it.

  1. The Opportunity to Grow through New Challenges. One of the best things about being an entrepreneur is that you get to break away from the monotony of punching a clock and doing the same job duties, day in and out. As a business owner, you’ll face new challenges and tasks on a regular basis. In fact, it is rare that you’ll do the same thing two days in a row! And the best part of performing new activities on a regular basis is that it gives you the opportunity to grow and learn, which will ultimately help you become a better business person.
  2. You Get to Surround Yourself with Great Folks. Let’s face it, as nice as it is to earn a steady paycheck, a 9 to 5 certainly has its drawbacks. Perhaps chief among them is having to work in an environment, not of your choosing. Doing so means that you have zero say in who you will work alongside. Hence, a common complaint among those who choose to work for someone else is that they can’t get along with their supervisor or other co-workers. However, when you’re the boss you get to choose the folks that you work with, and if it turns out that you hired someone that’s hard to get along with, you have the option of letting them go.
  3. Chart Your Own Course. The ability to determine the success or failure of your business is a big draw for many entrepreneurs. In fact, many business owners cite this as their sole reason for going into business. Given that entrepreneurship tends to attract those with a take charge mentality, the business arena is a great place to go if you enjoy making weighty decisions.
  4. A Flexible Schedule. Although we often associate entrepreneurship with long and unpredictable hours, there is another side to it. Running a new business sometimes gives you more flexibility than you’d have as a full-time employee. For example, many business owners have more time to travel and participate in volunteer than full-timers.
  5. Financial Potential. There are many different motivations for doing one thing or another. For instance, some are motivated by helping others, while others find motivation in facing new challenges. But whatever helps you wake up in the morning, it’s difficult to overlook the hefty financial rewards that could await those who can successfully manage business risks. As a business owner, you’re usually only one deal away from reaping huge financial dividends.

There you have it, the most common risks and rewards of starting a business. Learn how to mitigate them, and you’ll be well on your way to big things in the business arena. Here’s to entrepreneurial success!

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Last Updated on August 20, 2018

Quit Your Job If You Don’t Like It, No Matter What

Quit Your Job If You Don’t Like It, No Matter What

Do you know that feeling? The one where you have to wake up to go to your boring 9-5 job to work with the same boring colleagues who don’t appreciate what you do.

I do, and that’s why I’ve decided to quit my job and follow my passion. This, however, requires a solid plan and some guts.

The one who perseveres doesn’t always win. Sometimes life has more to offer when you quit your current job. Yes, I know. It’s overwhelming and scary.

People who quit are often seen as ‘losers’. They say: “You should finish what you’ve started”.

I know like no other that quitting your job can be very stressful. A dozen questions come up when you’re thinking about quitting your job, most starting with: What if?

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“What if I don’t find a job I love and regret quitting my current job?”
“What if I can’t find another job and I get in debt because I can’t pay my bills?”
“What if my family and friends judge me and disapprove of the decisions I make?”
“What if I quit my job to pursue my dream, but I fail?

After all, if you admit to the truth of your surroundings, you’re forced to acknowledge that you’ve made a wrong decision by choosing your current job. But don’t forget that quitting certain things in life can be the path to your success!

One of my favorite quotes by Henry Ford:

If you always do what you’ve always done, you’ll always get what you’ve always got.

Everything takes energy

Everything you do in life takes energy. It takes energy to participate in your weekly activities. It takes energy to commute to work every day. It takes energy to organize your sister’s big wedding.

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Each of the responsibilities we have take a little bit of our energy. We only have a certain amount of energy a day, so we have to spend it wisely.  Same goes for our time. The only things we can’t buy in this world are time and energy. Yes, you could buy an energy drink, but will it feel the same as eight hours of sleep? Will it be as healthy?

The more stress there is in your life, the less focus you have. This will weaken your results.

Find something that is worth doing

Do you have to quit every time the going gets touch? Absolutely not! You should quit when you’ve put everything you’ve got into something, but don’t see a bright future in it.

When you do something you love and that has purpose in your life, you should push through and give everything you have.

I find star athletes very inspiring. They don’t quit till they step on that stage to receive their hard earned gold medal. From the start, they know how much work its going to take and what they have to sacrifice.

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When you do something you’re really passionate about, you’re not in a downward spiral. Before you even start you can already see the finish line. The more focus you have for something, the faster you’ll reach the finish.

It is definitely possible to spend your valuable time on something you love and earn money doing it. You just have to find out how — by doing enough research.

Other excuses I often hear are:

“But I have my wife and kids, who is going to pay the bills?”
“I don’t have time for that, I’m too busy with… stuff” (Like watching TV for 2 hours every day.)
“At least I get the same paycheck every month if I work for a boss.”
“Quitting my job is too much risk with this crisis.”

I understand those points. But if you’ve never tried it, you’ll never know how it could be. The fear of failure keeps people from stepping out of their comfort zone.

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I’ve heard many people say, “I work to let my children make their dream come true”. I think they should rephrase that sentence to: “I pursue my dreams — to inspire and show my children anything is possible.” 

Conclusion

Think carefully about what you spend your time on. Don’t waste it on things that don’t brighten your future. Instead, search for opportunities. And come up with a solid plan before you take any impulsive actions.

Only good things happen outside of your comfort zone.

Do you dare to quit your job for more success in life?

Featured photo credit: Unsplash via unsplash.com

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