The Brutal Truth About Starting Your Own Business: Are You Ready?

Starting a business is a monumental task that requires a deep understanding of various aspects. In this chapter, I want to share my perspective on your idea of starting a business. I may exaggerate some situations and judge stereotypically, but please believe me, I only want to help you succeed.

Responsibilities and Realities

First, you need to understand some aspects of running a business:

1. Total Responsibility: As the business owner, you are responsible for everything.
2. Employee Accountability: You are accountable for all the employees you hire.
3. Taking the Fall: If something goes wrong, you take the fall.
4. Business Finances: The money your business earns is not yours; it belongs to the business.

Commitment and Challenges

Your task is to understand how deeply you want to get into this business. You can't enter it halfway or just a little; you must dive into it completely. You need to work 24/7, even when you sleep, dreaming about solving business problems. Despite all your efforts and how well you develop the business, you will have no time and no money.

You will experience burnout and think that what you do is unnecessary. That is true; what you do is only important to you, and only you must want to develop what you do.

A Harsh Reality Check

I want to scare you into stopping thinking about the business and returning to routine work, receiving your guaranteed salary. But if, after reading this, you are not scared and understand what lies ahead, we can fantasize a little and assume how to start your business.

Identifying the Key Asset

First, you need to understand what is the asset in your business, i.e., what should bring profit, without which the business will cease to exist. You cannot make yourself the main asset because the business will not exist without you, and you will not be able to sell the business if necessary. The best asset is clients who regularly pay for the business's services.

Developing Core Services

You need to come up with the main services the business will offer because only consulting and solving individual problems of other business clients can be unsafe. Let me give you an example:

Example: The Downfall of a Dependable Business

For two years, I had a good client who, along with all the other clients, did not stand out. He had an average service from my business and paid regularly, but at one point, his business closed. I contacted the owner of that business and clarified what happened because his company was quite successful, worked for about 15 years, had about 20 employees, and assets in the form of an office and vehicles. It turned out that strategically, he chose only three clients over 15 years, large companies he worked with. These clients paid him for the work, and everything was going well. But at one point, a turn of events led to one client refusing services and the other completely closing and also refusing. In three months, my client went bankrupt because operating expenses exceeded income. He declared bankruptcy and closed his business after 15 years of successful work.

The Lesson Learned

What do I mean by my story? You need a certain number of small clients who pay little but many of them. Even if someone stops using your company's services, the percentage will be minimal, and it will be quite easy to find a replacement for such a client.

Clients and Employees: A Practical View

Also, you need to understand that clients are like consumables; they should bring money, and that's it. A good analogy is if your pen stops writing, you take another one that writes; the same is with clients. The same applies to employees; they must work. If employees do not work, you need to find those who will.

Delegation is Key

Moving on. You also need to delegate 90% of routine work and 95% of professional work. What do I mean? Others should do everything that another person can do for you. You will feel that no one can do your job better than you, and you will be right. But if someone can do your job at 50%, you need to hire two people so that your job is done at 80%. Hired employees will always work ten times worse, slower, and less qualitatively than you.

Outsourcing Essential Services

It is also necessary to outsource things like accounting and legal services. These things need to be outsourced because they are vital for the company's life, and you cannot allow them to depend on your employee or you; professionals must handle them.

The Odds of Success

I also want to note that 90% of startups (new businesses) do not last longer than six months. This is often influenced by the following factors: insufficient funding, inflated expectations, strategic miscalculations, lack of professionalism, high competition, and so on.

Often in business, the business owner takes quite a long time to reach the same level of income (for themselves) as they would in a good position as an employee.

Conclusion

On this wonderful note, I am concluding the chapter. You need to think and reflect.