Three Things To Consider Before Starting A Business

Three Things To Consider Before Starting A Business

Leadership | Posted by YouInc.com - November 7, 2018 at 12:00 am
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Many nine-to-fivers who have dreams of becoming entrepreneurs often press their noses up against the glass of the entrepreneurial lifestyle and fall into a swoon imagining the paradise that awaits once they embrace it.

I certainly don't want to discourage anyone with entrepreneurial dreams from setting down that path, but if you're contemplating the leap, you have to be careful not to fall into the trap of romanticizing the lifestyle or of underestimating what it's going to take to get your enterprise off the ground. Here are some thoughts on a few of the most common things I've seen entrepreneurs underestimate when they're first starting out.

1. Underestimating the time and energy your business will take

Deciding to become an entrepreneur isn't all that different from deciding to run a marathon. You can't just plunge in. You have to be in shape, and you have to understand the level of commitment that running a marathon involves. Are you prepared to arise at four in the morning in sub-zero temperatures to put in your training miles? Are you ready to take sizable chunks of time away from your family so you can give your goal the often-obsessive focus and attention it requires? Are you prepared to take on a physically, mentally and emotionally draining task? I hope so, because if you're not, you won't last.

If you're thinking of launching your own business, you may be imagining the exhilarating freedom of dictating your own hours and control and flexibility you'll enjoy with respect to those hours. I hear that sort of thing from aspiring entrepreneurs a lot. But what if you wind up having no hours, no control and no flexibility? Building a business is a round-the-clock job. There's always something to do. So if you have a picture in your mind of an idyllically well-balanced life or business that runs itself, you need a reality check.

2. Underestimating the finances you'll require

Another big mistake I see entrepreneurs make when they're first starting out is underestimating how much money they'll need to launch their business. There are very few certainties for entrepreneurs, but one I've found that one you can pretty much count on is that a new venture always costs more than you think it will. Most entrepreneurs are ideas people; financial savvy isn't typically their strong suit. Pie-in-the-sky thinking works beautifully for visionaries, but it doesn't work so well on the financial side. Don't forget to think through all the potential costs carefully before you start, and ask others whose expertise you trust to eyeball your projections in case you've omitted something. Then put your numbers through hypothetical stress tests to make sure they'll hold up under pressure. That way at least when a crisis comes--and it will--you'll be ready.

3. Underestimating the need to balance your skills

One mistake that many would-be entrepreneurs make when they're first starting out is thinking they can do everything themselves. You can't do it all. It's essential to surround yourself with others whose skills are complementary to yours. The people you hire don't have to be your best friends--you're not running a social club--but they do have to be individuals you respect and they should believe in what you're doing. You also need to accept that you'll probably have to hire them before you can really afford to. If you wait until you're one hundred per cent ready, you'll never get your venture off the ground.

There's a Chinese proverb I like to quote about how you can't take two leaps to cross a chasm. You have to think through how you're going to approach the jump, get in shape for it, and consult others with more knowledge of physics and variables like wind and weather to ensure you've considered all the variables. Before you leap, you want to make the unpredictable predictable to the greatest extent possible. Even when you do all that, though, you can never really be sure if you're going to land. You need to sometimes just make that leap with the information you have at the time, along with your instincts. That, in a nutshell, is what being an entrepreneur is about. So, do you think you can handle that?

I'd love to know what you think was your worst mistake starting out? What would you do differently if you had the chance to start over?

 

Tags: arlene dickinson, dickinson, blog, mistakes, entrepreneur, unafraid, time, balance, business, business advice

Arlene Dickinson

Arlene Dickinson is one of Canada’s most renowned independent marketing communications entrepreneurs. As CEO of Venture Communications, her creative and strategic approach has turned the company into a powerhouse with a blue chip client list.  She is also the CEO of YouInc.com, a company she founded in 2012 that is dedicated to serving and investing in entrepreneurs and the entrepreneurial lifestyle. 

Dickinson is best known to Canadians as one of the venture capitalists on the award-winning CBC series Dragons’ Den, The Big Decision and marketing expert on Recipe to Riches.  She is the author of two books, the number one bestselling book, Persuasion and her most recent best-selling release, All In. 

Comments
T Carey
October 28, 2012 at 2:35 pm

Like you said, underestimating what it would cost. I really needed more $ for advertising. I also opened a shop in a tourist town and overestimated the amount of business during the off season. also, my assumption going in was that the town was very prosperous. I learned the hard way that retail business owners were only trying to keep up appearances.


I also agree wholeheartedly that having a business means you will have little time for anything else. But it's a good learning experience.

Norma Klassen
October 28, 2012 at 3:00 pm

In a former business, disaster restoration, the biggest challenge I had was expecting employees to measure up to my standards. Eventually I realized it was a rare person that could provide the demanded performance and wished I could re-hire people I had dismissed for less than perfect work. Some of them were as good as I would ever find in 12 years of operation.

Steve Megaffin
October 28, 2012 at 3:15 pm
For me, it was not taking into consideration the cost of shipping. You can have a great product and all the marketing to back it up, however if the cost to ship is as much as the product their buying, it can be a real deal breaker.
Dragan Cvijan
October 28, 2012 at 3:17 pm

Trust, trust, and trust. With preopinionated is waste of time and energy.

Diana Read-Miedema
October 28, 2012 at 4:56 pm

As the only Sage University Contract Instructor/Sage Certified Trainer for Simply Accounting living in the Maritimes (NS, NB, PE) I have set-up hundreds of successful small businesses in past 23 years. I have done countless accounting tech support jobs and the #1 reason why businesses are in danger of bankruptcy is that they had not paid for professional bookkeeping training and software at the beginning and they had held on to CRA "trust funds" of G-HST and/or Payroll-WCB for cash flow purposes! The banks will not loan money to pay off CRA. 

Diana Read-Miedema
October 28, 2012 at 5:02 pm

I have a gift for small biz owners whether new or experienced, poor or wealthy. An online flip-book "Simply Financials-Tax Accounting Handbook 2012" at SimplyFinancials.com website. Click here - Free online: Simply Financials-Tax Accounting Handbook 2012

Christy Richardson
October 28, 2012 at 5:37 pm

Similar to your point on finances, I didn't realize how long it would take to make a profit.  The first year we didn't take home a paycheck...any money we made went right back into the business to pay for another expense. Thankfully we had a bit of savings and a line of credit!

Chris Jones
October 28, 2012 at 5:55 pm

In my view, if it happened, I was meant to learn from it. Therefore I have a hard time thinking of anything as a mistake.  But if I had to choose something, it would be not creating a clear outline for the role of my team members.  This did cost us an original team member who was a great contributor. In turn, it has forced me to re-examine my expectations, put things in writing and make sure future members understand their role.  In our case, team members are not paid employees but receive free promotion and advertising so we ass-u-me-d anyone involved would be grateful. I guess that would be my biggest mistake so far...more to come, I'm sure.

Carla Charles
October 28, 2012 at 6:38 pm

Not being educated was my biggest mistake.  I'm an idea person, with a lot of ADD running through my veins.  I'm not organized nor am I  financially savvy.  It has taken me 3 years to acknowledge that I need to take control and not just act randomly.  So, I'm taking business courses, and honestly feel more confident already.


 

Ron De Silva
October 28, 2012 at 6:56 pm

...if I was to add to this.... it would be...not willing to step out of your comfort zone to make things happen.

Barbi G. Petersen
October 28, 2012 at 7:37 pm

We did not realize no matter how well researched a proposal or how confident we are after a pitch, absolutely nothing is a sure thing until the deal is inked.  We have learned to accept rejection as nothing personal, it's the way it goes; take what you can from it and move on. 

Karen Pentland
October 28, 2012 at 11:44 pm
The last two on your list definitely resonate with me. Trying to work within a too small budget, I've been stalling on hiring people with expertise I really need. It's a crazy-making cycle.
Andy David
October 30, 2012 at 8:24 pm

The worst mistake I made was buying into TV advertising from a smooth talker.  Don't get me wrong, I believe in advertising, but it has to be done properly and as a business owner you have to know what your are buying into.  Start slowly locally in news papers, Internet then once you can or want to buy into bigger campaigns, then do so.  My mistake almost cost me my business. I must be part cat as I only have 8 more lives.

Sherry Colbourne
October 30, 2012 at 8:32 pm

While I agree that considered thought needs to go into all entrepreneurial ventures, one can over think this phase. The greatest gift anyone ever gave me as an entrepreneur was the advice to "build the plane as you fly it". There is a real pearl of wisdom in this as you can't course correct unless you're moving. If you wait to figure it all out, you'll never get started.

peter forbes
November 1, 2012 at 3:43 am

Best advice I ever received: baby steps, one step at a time. Don't get your brain tied up with what might happen or what you might need five years from now. Instead set daily goals and just put one foot in front of the other.


You need to be passionate about what you do, never give up and just work hard.

Richard Larkin
November 1, 2012 at 6:09 pm

I hope this will be some help especially to the younger entrepreneurs (especially men) sorry guys.  It's OK to ask for help, it's not a sign of weakness or lack of intelligence. (like asking for directions when you're driving somewhere) In fact, I believe it is a sign of strength and will show your wisdom in the long run. I have worked with many business owners and in my experience women usually don't have a problem asking for assistance or guidance along the way. Recognize and acknowledge what you know and don't know.  Align yourself with people that care about you and your success and are willing to assist in the areas where you don't have the expertise. It took me a few years to figure this out and I sleep better now!

Shari Blanchard
November 2, 2012 at 6:16 pm

Great article- thank you!

Cheryl
November 6, 2012 at 9:23 pm
I would have to say that I allowed the money investor run the company over experience I already had and didn't argue and stand up for what I knew. So in turn this was not a mistake but a choice! I have since realized that as you said before a lot of this comes from your gut and your instincts. I have since taken a very strong role in my company as CEO and president and am speaking up maybe even a little too much ;) As a result things are heading the the right direction! Up! I loved the article about balance, I have 4 daughters and 2 step daughters on top of this business I own and take one dilemma at a time rather then trying to fix everything all at once! Happy business everyone!
Roger Pierce
November 7, 2012 at 7:27 pm

My worst mistake was thinking the current client work would last forever. It didn't, and we scrambled to get more work. I learned that marketing and selling isn't something "to do sometime", but rather a continuous activity. Otherwise, new entrepreneurs can work themselves right out of work.

Laura-Jean Bernhardson
December 22, 2012 at 11:27 pm

I did all 3!  Starting from an artistic background and wanting to be a fashion designer, I started making things and selling them.  Every step of the way I underestimated how much money things would take and the commitment needed to pull through. In a lot of ways though, I credit my naivete in allowing me to take the plunge at the tender age of 24 (oh so many years ago) and just get started following my dreams.  I made mistakes along the way, cried in the shower, fell on my face, but I also had guts and just kept plugging.  I now have 3 stores and have been on the front page of the Financial Post, so I must be doing something right! 

Joe Wasylyk
April 16, 2016 at 12:46 pm
I suggest that there is a 'triple jump' for those people that want to try entrepreneurship later in life as a business or social entrepreneur. The last jump is composed of factors such as ageism, venture capital discrimination for senior entrepreneurs, and the high tech knowledge gap where you will probably need to collaborate with a younger entrepreneur to make this rather difficult jump.
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