Are you considering becoming an entrepreneur? Before you do, let me offer you a little reality check. A recent survey, the Wave Small Business Report, polled small business owners about why they started their businesses and the pluses and minuses of being their own bosses—and had some surprising answers. Before you hand in your resignation or lease that retail space, please take a moment to read on.
First, the good: A whopping 86 percent of small business owners say they love what they do for a living, and 82 percent say the rewards far exceed the challenges. When asked if they’d ever consider working for someone else again, the majority say “Never.”
Why did these entrepreneurs get into business? The majority (57 percent) wanted to be the boss and make the decisions. In contrast, just 18 percent started a business out of necessity because they couldn’t find a job.
Now, the bad: Half of respondents admit they underestimated how hard it is to be your own boss—although 96 percent of those say knowing the truth wouldn’t have changed their plans. Why is it so tough? Time management is the big hurdle—as any entrepreneur knows, there are simply too many things to do and not enough hours in the day. Almost half work on administrative tasks outside normal business hours, and one in five do so on the weekends. Overall, two-thirds of respondents said work/life balance was their top challenge.
Finally, the ugly: Almost half (48 percent) of respondents’ businesses didn’t earn enough for their families’ needs. At the same time, 77 percent say their businesses either met or exceeded their expectations in the past year. Wave sees this not as a contradiction, but as a sign that business owners have a realistic attitude toward the current economy—in other words, they don’t expect their businesses to meet their financial needs right now.
Those figures worry me a bit. It’s one thing to be optimistic (as 66 percent of small business owners are about the coming year), but another to bury your head in the sand. If your business is consistently failing to meet your basic financial needs, you need to make some changes.
That might mean passing on price increases to your customers, marketing more aggressively or upselling existing customers. Encouragingly, some 73 percent of respondents in the survey were planning to expand their product offerings or start new marketing campaigns in the next 12 months.
I do not want to scare anyone away from starting your own business. What I am saying is that you need to go into it with your eyes wide open—and you need to know where you can go to get help.
One great place is SCORE, where you can get free business counseling from experienced mentors. Visit the SCORE website to get matched with a mentor and get help online 24/7. SCORE mentors aren’t just for startups, either. Even if you’ve been in business for years, you can turn to your mentor next time you need a reality check.