Starting a New Business: Risks and Rewards
Every year, over 500,000 new businesses are started in the United States. While starting a new venture can be risky, entrepreneurs see the potential benefits as more significant than the uncertainties. In this article, we will discuss the most common risks associated with starting a business and the rewards that can come with it.
Risks Associated with Starting a New Venture
1. Long and Erratic Hours
Starting a business often means signing up for long hours, even if you have adequate funding and staff. Entrepreneurs wear many hats and need to be available at all times. As the business owner, the buck stops with you, making it essential to put in more hours than anyone else in your company.
2. Many Ruffled Feathers
It’s crucial to note that unpredictable hours often come with entering a new venture. With hectic schedules becoming commonplace, it can be challenging to maintain relationships. Family and friends can often find themselves on the short end of the stick. It’s critical to build breaks into your program to stay on top of everything, or you risk losing out on relationships and potential support.
3. Unforeseen Changes in the Market Environment
Entrepreneurs often start businesses without being aware of significant shifts in the market that could impact their business negatively. Examples of this include being unaware of upcoming zoning laws that require expensive renovations to stay in operation or sudden shifts in economic conditions. While due diligence can help to avoid this, some changes won’t be predictable, and it’s essential to factor a degree of the unknown into all your business decisions.
4. Lack of Management Experience
Many new entrepreneurs believe that hiring good managers will negate their lack of business management experience. Unfortunately, this is often not the case. Without required experience, how will you know whether your managers are making mistakes? That’s why experts recommend that entrepreneurs take on management positions under someone else before striking out on their own.
5. Potential for Financial Loss
Running a business requires financial management and careful budgeting, which many entrepreneurs do not have experience in. Additionally, many start-ups are bootstrapped, meaning they have not adequately secured funding before launching their venture. This can lead to severe cash shortages, making it essential to set aside personal savings before taking the plunge.
Rewards of Starting a New Business
1. The Opportunity to Grow through New Challenges
One of the best things about starting a new business is breaking away from the monotony of a 9 to 5 job. As a business owner, each day presents new challenges and tasks to tackle. Performing various activities regularly provides the opportunity to grow and learn new things. Entrepreneurs can ultimately become better business people.
2. You Get to Surround Yourself with Great Folks
One common complaint among those who work for someone else is that they can’t get along with their supervisor or co-workers. As the boss, when you start a new business, you get to select the people you work with. If someone doesn’t work out, you have the option of letting them go.
3. Chart Your Course
Starting a new business allows you to be in control of your own destiny. Unlike being an employee, you have the final say on how to run your company. Entrepreneurs love the ability to make weighty decisions and see the effects of their actions.
4. A Flexible Schedule
Although running a new business can mean long and unpredictable hours, it can also provide flexibility. Entrepreneurs who have started their own ventures have the chance to create their schedules and work around their other responsibilities.
5. Financial Potential
Lastly, starting a new business can bring significant financial rewards. Entrepreneurs are only one deal away from reaping huge financial dividends, making it an exciting time for anyone looking for financial independence.
Starting a new business can be challenging, but it can also be one of the most rewarding experiences someone can have. Entrepreneurs need to be aware of the most common risks and take the necessary steps to mitigate them. The rewards of starting a new business are vast and can lead to personal and financial growth. It’s up to each person to decide if the benefits outweigh the risks of going into business for themselves.