Everyone knows at least one story of how a small business succeeded against massively powerful competition, but this is an exception and not the general rule. You see, 9 out of 10 startups result in a failure, which is the grim reality we live in and is something that most people choose to ignore. With this in mind, here are a few harsh small business realities people often tend to overlook.
1. Making a Profit Takes too Long
While a lot of people enter the business world with dreams of being able to earn some easy money, this isn’t a likely scenario for a time being. On average, it takes 6 months up to 2 full years for a startup to become profitable, which means that its owner will have to find another way to survive in the meantime. A lot of people start a business as a side-project, while still keeping their day-job as a main source of income. Others sell an asset, rent a room or find another source of revenue to support their household until their business finally gets on its feet.
2. Mental Toll is too Great
Even if the logistics seem to be in order, weeks, months and years of stress over work put one’s mental health to a serious test. Working late hours and being strained between your business and personal life are just some of the things that are too difficult for some people to bear. To make things worse, in small businesses, it usually all falls down to that one person in charge, which means that when they start collapsing, the company will soon follow. This is why finding an exhaust vent outside of work (and finding time for it) is a necessary step.
3. No One Trusts the Newcomer
On one hand, you are out there full of enthusiasm, making special offers and ready to make a name for yourself, but on the other, no one trusts a newcomer. Most people prefer to get the word-of-the-mouth recommendation before they decide to do business with someone. Well, this is simply impossible if they are your first client. One of the ways to reassure them is to get all the necessary certification or even consider getting JW Surety Bonds. This way, even though they don’t know how reliable you are, at least they don’t have to worry about their investment going to waste.
4. Mistakes Happen
Finally, you need to keep in mind the fact that mistakes happen to everyone. For instance, you may have a great idea, which you follow through with an even better plan. You research your target demographic thoroughly, make the best possible budget estimate for the first year and organize your logistics in the most efficient manner in the area. However, once you start putting this plan into action, you may find it lacking in many aspects you didn’t even consider. Furthermore, the set of circumstances may become so specific that no amount of planning would help prepare you for it. This is something one needs to be ready for at all times and it is why the best plan is usually the most flexible one.
These four grim realities aren’t exactly a secret, but they are definitely something most people choose to forget about. After all, tales of quick profit are always more likely to catch on, than a story of how a startup failed during the first quarter because its manager had a nervous breakdown. While to some all of this may sound highly demoralizing, those with the entrepreneurial spirit always want to know what they’re up against. All in all, you need to prepare for the worst and hope for the best.