I wish someone had told me these when I started out.
This piece is not to scare you away from starting a business. Rather, it is aimed at prepping you for any possible challenge(s) you may come across along the way.
As a result, we’ll break the topic into two facets:
1. Harsh truths no one will tell you about starting a business.
2. What you need to create a successful business.
That said, let’s dive in.
1. If you want freedom, forget business!
People often want to do business because they feel it is high time they ditched their 8–5 jobs. I’m sorry to disappoint you but the moment you start a business, you’re taking a 24-hour job. You will always work full-time planning, meditating, and strategizing for your business. There’s no escaping it, at least for the first 5 years, if you’re lucky.
Businessmen are often busy. Even those times you assume they are free, their subconscious is thinking about the business. There’s no escaping it. At a job, you can run from responsibilities but if it’s your business, you must be dedicated. Regardless of how stressful that might be.
2. You can’t do everything alone
You can be the founder, secretary, sales guy, partnerships manager, customer service officer, and strategy personnel when you start your business. However, if you are keen on taking your business to the next level, you can’t do that for long.
You must hire talents. You must hire people to do some of those stuff for you. No matter how (un)lean this model sounds, it’s your best bet. (Lean model of starting a business involves spending as little money as possible to get your business to achieve it’s laid down goals).
You can neither do two things at a time nor be in two places at once. Besides, two heads are better than one. And you are better equipped with some human qualities than others.
3. No backup plan
At some point, you will face challenges in your business. And when that happens, no premeditated backup plan can get you out of the mess. You’d need to adapt to the situation to get yourself out.
This is because a business doesn’t have a dictionary where you can easily check the meaning to any new vocabulary you come across. You must study the situation and use your understanding of that situation to save the day.
4. It often takes a long time to succeed
When you start a business, you’ll have a plan. A vital part of that plan is your revenue projections. Perhaps, you plan to break-even in 3–5 years. (Break-even is when you make back as much money as you have invested in the business as profit). You may not break-even in 10 years.
Now I know what you are thinking. You’re thinking you can just pick up anything, sell it, and break-even on your first sale. Well, that’s probably right. However, if you aim to become a multimillion-dollar business someday, then you must invest heavily in that business.
5. There are incredible highs and lows
Usually, most businessmen look towards the first million. And that’s often the toughest to achieve. The moment you cross the 1 million mark, you’ll be amazed at how high you can go.
You may be heading to 5 million in no time. Perhaps, even 10 million. Sadly, the lows can be just as incredible. A brave move with high risk could get you back to almost zero. At this juncture, you’d observe it’s harder to get back up than when you even started out.
I’m sure you’re wondering why that is.
Firstly, all your friends now presume you’re rich. And some family members are starting to look up to you for cash. In fact, except for those that really trust you, no one will believe you. Those that’d even believe you will most likely not be in the position to help since they have their problems as well.
6. Partnerships are vital to business success
No matter what you sell, partnerships can take you to the next level. Without them, you’ll be dead in no time. Let’s think about the most useless thing to say you’re selling. Have anything in mind yet?
Ok, let’s examine toothpicks for a while. When was the last time you used a toothpick? I for one can’t remember. But come to think of it, with the right partnerships, selling toothpicks can turn you into a millionaire.
There are several canteens, restaurants, cafeterias, and lounges. What if you’re supplying 10% of those toothpicks every day? That’s the first partnership. You have a hungry market. How do you then supply this starving market?
You look for a producer or wholesaler. Build another partnership to supply you the toothpicks, perhaps, even help you with delivery. Then you sit back and enjoy your profit. That is how far the right partnerships can take you.
7. It’s not as easy as it sounds
I’m sure you’re almost thinking of starting a business from the analogy I made above. Ok, take a deep breathe and calm down. It’s not always as easy as it sounds.
There are numerous factors that we’ve not considered. How do you build those partnerships? Why will anyone want to give you that power to become a sole supplier? Where will you get the capital? How about the logistics problem? How do you get the goods to the buyers? Will you supply daily or weekly? If weekly, will there be debts? If there are debts, how will you cover up?
The factors are limitless. Often times, the moment you thought you’ve figured it all out, you find out that another important factor is staring right back at you and waiting for you to fall a victim.
With all these laid out claws, how can you then build a successful business?
1. Start with the right team.
2. Partnerships and connection.
3. Sell a product or service that customers actually want.
4. Spend as little money as possible in the process.
Most startups that fail do so because they fail at one of these. A startup that’s equipped with all these four has a high probability of success.