The truth is that being an entrepreneur is one of the toughest, most time-consuming things you’ll ever do. Your business will need constant nurturing and attention – you don’t get a “day off” from being a parent, and neither do small business owners.
The rewards that come with being an entrepreneur are enormous, but before you jump in to that crazy world, here are five things you should consider.
1. Never underestimate the commitment required
If you thought you put in the hours for your old boss, you’ll be putting in far more for the new one: YOU!
Truthfully, nobody knows what is involved in running their own business until they do it. The list of tasks which people take for granted under full-time employment is staggering! You are your own manager, accountant, salesman, tradesman, secretary and goodness knows what else.
2. Make sure you capitalise your business adequately
If you don’t, you’ll be struggling from day one.
You may not have a huge amount of business to begin with, but you’ll need enough cash around you for startup costs, and certainly to maintain yourself and your family.
Never get behind with the VAT or Inland Revenue, as these debts will be pursued vigorously. Try and always honour your suppliers’ debts too – turnover is what makes the business world go round (and you never know when you’ll need them to do you a favour).
All of this might sound obvious, but it is truly unbelievable the way in which money dribbles (or gushes) away. Always negotiate for terms of payment with your suppliers and customers alike and once done, do not be embarrassed to ask for money owed. Clients that withhold outstanding debts are a waste of time and need to be dumped before they drive you into bankruptcy. They will always dangle the promise of payment after you’ve done a little extra for them, but the money is rarely forthcoming.
3. Choose your business partner/s wisely
Think very carefully if you’re going into business with either family or friends – both can be rewarding and both require a huge amount of trust. Be absolutely certain you understand and communicate with each other perfectly.
The idea of family-based businesses sounds fine and it can be wonderful, as long as everyone knows where they stand legally and financially before you begin. You need to be 100% open and honest with each other, which doesn’t seem challenging when business is good. Things can become extremely fraught if the business takes a sudden downturn, and this is when strong communication is crucial.
Management decisions which are ordinarily tricky, are doubly so where family is concerned. Go into such arrangements with your eyes wide open.
4. Employee relations and health and safety issues
Employing people can be a nightmare due to the minefield of legislation that surrounds the workplace or site. Get to grips with your new set of obligations, including employee relations, health and safety issues and be certain that you fully understand your legal obligations.
Employees are your lifeblood and often the route to making a whole lot more money. Staff should be chosen carefully and treated well, pay them promptly, pay them before you pay yourself. Your business will form the basis of your employees’ life and will be spoken about when they get home after a long day’s toil – and whether that’s in a glowing way, or with deep resentment – is up to you. Word gets around fast and nobody wants to work for a neglectful or plain bad employer.
5. The financial and emotional rewards
It won’t be a bed of roses to start with, but when you get your business working efficiently and in a friendly way, it can be financially and emotionally rewarding.
The success of your business is completely in your hands. Prepare carefully, finance well, try and select good clients, pay promptly and manage cashflow efficiently and who knows, you might even have fun along the way.
Ben Copper is the founder of Nutshell Construction.
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