In my career as a Business Development Consultant I have had a fair share of working with first-time entrepreneurs, listening to their main challenges, and eventually helping them come up with sustainable business and marketing plans.
Based on that, I’ve synthesised here a few considerations for young entrepreneurs – so you know the main challenges involved in starting a business from scratch:
1. Entrepreneurship is HARD
A lot of first time entrepreneurs that i’ve spoken to fail to understand that starting new business demands A LOT of sacrifices. And even then, it doesn’t mean that your business will fly off and you’ll become the next Amazon in a few weeks time!
In fact it’s common that most businesses will fail within the first 18 months.
“The number one reason why so many businesses fail so quickly is because they don’t realize how hard it is, how “all in” you have to be, and how much talent it takes to be a successful entrepreneur”Gary Vaynerchuk
In business if you make a commitment, regardless of what happens, you have to deliver. Not only is your business’s image at stake, but also personal brand and reputation. As an entrepreneur, you have to deal daily with making hard decisions – which could put your status as an entrepreneur at risk.
2. Starting a business requires COMMITMENT
You come from a family of entrepreneurs (your grandpa started a trading business when he was 28 years old), you’ve probably gone to business school and in your free time you watch #AskGaryVeeShow on Youtube. By now, you might feel you know everything there is to know about running a business you are ready to start your own business.
Sounds like a great idea, isn’t it?
If you are passionate about being an entrepreneur, you have to first understand the level of immense commitment it requires. By starting a business you are making a decision that won’t allow you any time, in your first year, to do anything except growing your business. Bye-bye hours spent watching Netflix, no more late night partying and certainly you’ll be spending less time with friends and family. Hello working 18 hours a day, working on weekends or late at night.
In fact, you have to ask yourself are you ready to make that level of a commitment?
3. Financial considerations
Starting a new business, particularly one that requires an upfront financial investment and not just your time, drains money. Before you even start it, you have to make sure you have enough cash to sustain your business operations before you even turn a profit. Depending on your industry, most startups can run a for few years before they break even.
You need to be practical and understand financially what it takes in order to pay for bills like rent, inventory and staff salaries. Do a cashflow projection for at least 1 – 3 years and see if it makes sense for you to venture into this business.
Then, ask yourself:
Do you have enough money to stay afloat and for how long? Do you have one year’s worth of rent and operational expenses?
The fact is that starting your own business is a daunting task and with a high chance of failure within the first 2 years, is it even worth it? I know this may not sound ideal and a little harsh, but this is the reality of business. I want you to read carefully and understand the above considerations before venturing into a business simply because I want to see you succeed.
Are you a business owner? New entrepreneur or just seeking further advice? You can send me an email to start the conversation.
Follow me on Instagram. I am an experienced business consultant and i’ve prepared numerous business plans and feasibility studies for various business ventures in the field of property development, education and online retail stores.