New Business Start Ups: The Hidden Truth

Cashmanager | 7 years ago

Flexible hours, family time, more money or being your own boss; entrepreneurship is the best way to escape the constraint of the rat race and live the life that benefits you. Starting a business may seem like a great idea but there are many harsh realities you will face before the dividends. Here are a few truths you should be prepared for in your new business venture.

You can’t do it all

A mistake made by most business owners is thinking they can wear all the hats. You have a great business idea but no matter how skilled and talented you are, you can’t handle every area of your business. It is difficult to accept that people will have more knowledge on certain areas than you do but let go of the ego and hire a professional. Your time needs to be focused growing the business so outsource administrative and mundane tasks.

Success rates are low

New Zealand has a much healthier success rate for small business survival than most countries but 25 percent will still fail within the first five years. This should not be a figure to deter your pursuits, but you need to prepare for the odds against you. Business owners who have a clear plan and regularly revisit their goals, carefully manage their cash flow and invest more time and energy into planning will have a greater longevity.

There are always hidden costs

There are a lot of costs in setting up a small business and your profits are not guaranteed. Even with the most careful financial budgets and plans, there will always be unforeseen circumstances to set you back. CashManager accounting software and stringent cashflow management will give you transparency over your finances but you need to set aside an emergency fund and be aware that most of your decisions in and outside of work will be dictated by finances.

You will be working all the time

Flexible hours and to have more time with your family may have been reasons for setting up your business, but in the first few years you are likely to be working all hours to make your business succeed. Time with family and friends will be sacrificed as a result. Holidays and socialising will be forfeited which may not always be understood by those around you.

Things will go wrong

Just as in life, you cannot predict what is around the corner for your business. A lot will go wrong in the first few years and continue to go wrong throughout the life span of your business.

You will want to give up

There will be times when you have committed all your energy and savings into an idea for it to fail miserably. Successful owners are not those who invest emotions into their decision making but make choices that are best for the company based on logic and data. A successful entrepreneur is not on their first start up, they will have faced many setback and challenges to get where they are.

Running your own business is your chance to create the lifestyle you want but it takes hard work and determination. Start the journey well equipped, be prepared for the unexpected and maintain a positive mental attitude ... it just may be the start of something great!

CashManager accounting software has successfully been helping small business owners and their accountants efficiently manage their cash flow and understand their performance at a glance since 1992. Find out how we can help your business grow.