6 Surprises to Watch Out For When You Start Your New Business
If you have decided to take the plunge, then a massive congratulations are in order. After all, while we all might have great business ideas in our head, this is the exact place that many of them stay. In other words, very few of us take these ideas forward.
Of course, when you do make this big decision, it’s a daunting one. It is full of unknowns, and this is what today’s article is all about.
Unfortunately, there will always be surprises, but the following six that are about to be described are perhaps some of the most common, and most avoidable. Let’s now take a look at them to make sure you don’t get caught cold.
Surprise #1 – You don’t think about insurance
It’s one of those unfortunate facts of life; you need to be insured for pretty much everything nowadays. It’s no different when it comes to your own business, and, in some cases, you might have to insure yourself even more.
For example, let’s take those companies involved in the medical industry. One only has to read this information on medical indemnity insurance to see how much of a serious business this is, and also how you have to build this into your bottom line.
Surprise #2 – You’ll pay more out in salaries than you might initially think
Advertising a job at $30k/annum? Well, while your employee might get this as gross profit, you will be paying out a lot more. The exact amount is going to vary depending on where in the world you are based, but when you factor in additional taxes, pension costs and even your internal HR fees, it all adds up. There have been some interesting pieces that have been written about this, but in summary, you need to budget for a lot more than the initial salary.
Surprise #3 – Cash flow problems are not just theoretical
If you have performed any research when starting your business, you will have probably heard about all of the potential problems that cash flow can prompt. In short, this can be the silent killer for small businesses.
Unfortunately, these anecdotes are not exaggerated. Most small businesses are so focused on getting those initial contracts, that they forget that in the real business world other companies will try and stretch payment terms as far as possible. Ultimately, it can leave them with gaping cash flow problems, and at risk of falling into the infamous statistics regarding those businesses which fail in the first years of operation.
Surprise #4 – Flexible working doesn’t exist at the start
One of the big reasons why so many people opt to go down the self-employment route is because of the flexibility. In other words, they believe that they will be able to set their hours and have a much more balanced lifestyle. Unfortunately, at least in those early days, this seldom happens. Instead, new business owners will generally have to work significantly longer than they are used to, to get their idea off the ground.
Surprise #5 – You will say yes more than you would like
At the start, you will be pushed into a corner. There will be deals that get put forward to you, that don’t meet your requirements for whatever reason. Quite often it is due to cost, but it might also relate to the type of work that is being asked of you.
Unfortunately, during the early days at least, you feel pressured to say yes. As we have already alluded to, cash flow can be king, and this means that you need to get the money flowing to get your business off the ground.
Trust us, it won’t always be like this, but keep in the back of your mind that you might have to compromise during the early days of your new enterprise.
Surprise #6 – You might not get paid
Well, let’s end on something of a sour note. When you work in the typical 9-5 job, it might not always be the best feeling in the world, but you can go to bed at night knowing that your paycheck will come in at the end of the month.
As your boss, you aren’t necessarily afforded this luxury. Again, this tends to be at the start, but there might be occasions where things get a little tight. You will have suppliers to pay, as well as your employees who are relying on you, and you have to wait at the back of the queue. For this reason, always make sure that you have at least some savings to life from in the worst-case scenario – as your business attempts to get off the ground.
A closing note on early entrepreneurial surprises
Following on from the previous six points, you should now have an idea that starting your business isn’t all that the business books and TV shows make out. It can be hard work, and there can be surprises along the way.
However, let’s not also forget that it can be incredibly rewarding and if you do make a success of it, it will transform your life.