People who know me know that I love being an entrepreneur. There is absolutely nothing like the thrill of taking something that you created out to market. It’s a ton of fun, it’s challenging and it’s so rewarding to know that your future is entirely in your own hands. I really don’t know that anything helps you develop your own sense of self in quite the same way as creating your vision and then working hard to ensure its success.
That said, if my nearly-grown son were to come to me and say he wanted to start his own business, I’d have to balance my passion for entrepreneurship with some harsh realities that I think every small business owner needs to know before getting started. I think that the challenges of starting and successfully growing a small business fall into three categories.
The Truth About Small Business Entrepreneurship
Two Years and No Pay
We all know that starting a business is often about bootstrapping cash. What most people won’t tell you is that for a long time you will make more money an hour flipping burgers than you will selling your product or service. You are in for a rude awakening if you are expecting to make any money in the early days – meaning the first two to three years. This is the time frame when you live off of your savings, so to get started, you have to:
- Have a savings to live off of.
- Be very comfortable tapping into it for general living expenses.
Why so lean? Because you can’t get to selling or marketing your product until you wade through a huge number of administrative tasks that must be completed. Plan to spend a lot of time on things like creating your website, finding office space, balancing your lean budget and doing strategy planning.
To drive home this message, I’ll share a personal story. When I started my business my family went from living comfortably to barely scraping by on $2,000 a month. We had four kids, our credit cards were maxed and we literally had nothing in the fridge. My mother saw how bare the cupboards were and made an emergency Costco run to ensure we’d eat. I had the delusional belief that our company would be a success, but hadn’t planned for just how lean it would be in those early days.
The point: Know you’ll be strapped – for a while – and plan for it.
Relationships on the Back Burner
It probably won’t surprise anyone, but having no food in the house or disposable income can put a strain on your most cherished relationships.
What might surprise you is how consuming starting a new business is – it occupies everything you have, which means there’s not much left over for the people you care for and love. So, not only is your spouse dealing with the fact that you don’t have enough money to pay the bills, they have to also cope with the fact that you are spending all your time developing the business. And you have to spend this time…the business cannot survive without you pouring all of yourself into it. Don’t underestimate how much of a strain that can take on your loved ones and friends.
You have to understand, I have a great, super supportive wife. But I remember very clearly the day when she reached her limit and asked me to use my MBA and law degree to get a ‘real job’ and take care of my family. I didn’t want to, but I saw the strain my passion for entrepreneurship was putting on my family and I agreed to quit. In truth, I went to work that day intending to spend my time searching for a new job but was sucked into work and forgot to look at job sites.
Luckily, my wife had a change of heart and I didn’t quit – but it was rough.
Drained Emotional Reserves
Like I said, entrepreneurship is thrilling, especially when you see yourself create something from nothing. There is, however, a dark side to being so engaged in your work – you can become totally consumed by it. I mean, I was so caught up in it that I forgot to look for a new job when my wife asked me to.
The “all-in” nature of starting up your own business has you thinking about it all the time. It isn’t just the time and energy spent thinking about your business. It’s the mental and emotional strain you endure. You have to know going into it that every insecurity you have will eventually surface. Whether you bring them there, or someone you care about who has reached their max does, you are going to have to face some ugly thoughts about yourself. When you take the fear, uncertainty and doubt and combine those with a negative customer experience or a spouse who is questioning your delusional perseverance, you’ll get a recipe for wanting to quit.
Don’t quit. I believe the psychological battle we face as entrepreneurs is one of the saddest and most inspiring things to study. Sad when the entrepreneur succumbs to the psychological warfare; inspiring when the entrepreneur triumphs over it.
My dad taught me something as a teenager that I didn’t pay attention to until I was buffeted by the challenges of starting a business:
- Thoughts become words.
- Words become beliefs.
- Beliefs become actions.
- Actions become habits.
- Habits determine our outcomes.
I’ve found this lesson to be true. As entrepreneurs, we have to master our thoughts. When we do, we create amazing outcomes. It’s not the formula for solving every emotional challenge you have, but it goes a long way toward getting you on the right path.
Keep Focused, Plan and Improve Your Odds
Most small businesses don’t make it. I’m lucky that ours did. Even though it took a toll on my relationships, almost wiped me out financially and practically crushed me mentally and emotionally, I wouldn’t trade it for the world.
Don’t be afraid of the challenges as you start and grow your small business. Instead, plan, anticipate and prepare. Make sure to remember that every day you make it increases the likelihood that you’ll survive.
Thoughts Become Beliefs Photo via Shutterstock
Awesome post, made me think back a few years ago and what you mentioned was exactly what I went thru in my first business. Didnt make anything until 2.5yrs later, no time for anything, always stressed, anxiety attacks. Now I get anxiety attacks for not being busy enough!!
LOL! Why are we entrepreneurs addicted to anxiety? 🙂
Seriously, though, congrats on your success. Isn’t perseverance and amazing thing to possess?
I think small businesses can be what you make of it. It is certainly an adventure!
Great article. Inspiring
Thanks for the encouraging words bud.
You’re welcome, Aaron!
It is very well articulated and resonates to the life of every first generation entrepreneurs. The immediate family members may not realize the ordeal faced by an entrepreneur. But the fun and kick that the entrepreneurship gives is priceless. But one need to give strike a clean balance when something hits the roof and take hard decisions. That’s what entrepreneurship is all about. Great Article…
Like the article – “When you work for yourself, you become an innovator, or you dont eat” Johm Millard Marriott
Thanks a ton!
I just started my own venture… all what you have mentioned are true and Spot-on!
Totally profound advice. On the mark. You dont get taught this in most business schools, yet this is what makes or breaks you.
Simply great, down to earth and very practical article. At every step it feels like someone who has “gone through it” has written it.. Inspiring indeed.
Great post and very important for anyone considering starting a new business to correctly interpret the information you posted. Starting a new business can be extremely exciting, however it is not an adventure, life is an adventure. Starting a new business must be meticulously planned. It is imperative to do market research and create a solid business plan otherwise you are simply going to start something based on a dream, a desire or a burning passion of which none form a sound business foundation. Desire and passion can help grow your business and make it stand out but a business plan is your template for measured success.
Kimberly Sherman Leon
Great Article! Completely states my current position. I couldn’t have explained it any better! Success is key!
When I launched my executive search firm in late 2000, I did it from home and kept my overhead costs to a minimum. By the end of 2001, I had generated a six-figure profit. Later, I added office space, etc.
I believe that my results can be duplicated by almost anyone with a deep understanding of their market, strong sales and marketing skills, and dogged persistence. By the way, in hindsight, I believe that a big part of my early success can be also attributed to having a very supportive wife. She helped me to stay focused and not allow the inevitable problems I faced stop my momentum.
I agree. It’s so critical to keep costs as low as possible and pay yourself as little as possible in the early going. I believe nearly all small businesses that fail within the first two years can be traced to two things: an unwillingness to scrimp and an unwillingness to learn how to sell. Congrats on passing those two big tests… and congrats on creating a business from your skill and passion. I’m happy for you!
Starting a business and bootstrapping it is definitely not for the weak. It’s definitely a test, emotionally, financially and physically but worth it. I am a lot stronger than I thought I was. 🙂
Joyce, I completely agree with you. Launching my business Biziby was a true test of what I really was. So far, I am strong and doing well but only time will tell how I do.
Awesome, Joyce. One of the reasons I love entrepreneurship is because of the challenges it gives us–we are served up all sorts of life lessons that, if we face them head on, make us stronger. It’s not always fun to go through, but entrepreneurship does make us stronger.
I don’t think these ugly truths are true across the board, or for all entrepreneurs. I’ve been in business since 1999, and I’ve never made a killing, but I’ve also never neglected my family – I’m the kind who will knock off at 5, and block my weekends to be with my husband. End of story.
So while some good points are made here, I hope this article doesn’t scare anyone away from starting their own business.
Good for you, Mare. I applaud the balance you were able to strike from the beginning. And you’re right that this doesn’t apply to everyone. I’ve noticed that it applies more particularly in situations of survival–especially where the business owner is the sole breadwinner for a family. That’s when this stuff tends to really play out.
BTW, I totally agree with you that success doesn’t mean the business owner is making a killing–success is defined by business owners in many different ways. Again, good for you!
I can relate to your story. When an entrepreneur builds a business and it makes logical sense to let go, it’s difficult. It’s as if all the experience and effort are wasted. Thank you for this inspiring story. I really needed to read this today.
Clate– thanks for the words of encouragement!
We’ve been bootstrapping for 5+ years now– and being lean has caused us to be ultra efficient in marketing. When you don’t have the cash for marketing and sales, you have to rely upon customer testimonials and thought leadership to drive revenue.
Our vision has been to serve small business by repurposing what we’ve done for the big brands. It’s an enterprise saas model that is just starting to paying off.
I’m so glad that you’re sharing the reality of being an entrepreneur, since the rest of us might think otherwise if we listen to the hype out there. I believe in “get rich slowly”. Thanks for being so genuine, honest, and replying to folks in the comments!
Thanks, Dennis. It was great meeting you at InfusionCon in the spring. I love what you guys are doing to help small businesses. Keep up the great work!
Great article! I was fortunate enough to meet Dan from infusionsoft and your story is inspiring. Thank you for sharing this article.
Thanks for sharing your story Clate. I so appreciate hearing stories like yours because I am certainly not an overnight success and it would be crushing to think there was something wrong with me because I didn’t make 6-figures my first year, or second…
P.S. – I love, love, love InfusionSoft and one of my goals is to be an InfusionSoft marketer of the year – now, that would be success!
Thanks, Liz! I love hearing from customers whose businesses are strengthened by Infusionsoft. I look forward to the day you win one of our customer contests. You can do it!
Hey small businesses! If you liked this post by Clate, you’d love the webinar he’s doing next week on the topic of strategic planning for small business. You can register for free here: http://insft.co/12ggxie
Ugly truths perhaps but ones every entrepreneur should be prepared to potentially deal with. I wouldn’t say all of these are inevitable while starting a company, but some are distinct possibilities…especially in tough times. Thanks to Ivan for sharing this post with the BizSugar community.
So true and accurate it brings a tear to my eye. Thanks for reminding me it can be done.
Clate, this article couldn’t have been written better. Especially the part “not only is your spouse dealing with the fact that you don’t have enough money to pay the bills, they have to also cope with the fact that you are spending all your time developing the business.” is killer, I don’t know any entrepreneur who won’t be touched with this. Stayin focused on your goals but also always reminding yourself you have a personal life out there helps!
Laura Kraman Parquet
Wow! Almost brought me to tears. I’m still struggling after 5 years. What makes us so different than other people that we just cannot quit? On TED talks, there was a discussion about the amount of grit some people have compared to others, which determines the level of success despite what life brings them. I just compare myself to Golden Retriever. No matter what, I’m going after it.
Spot on. It takes a special person to be an #entreprenuer. Infusionsoft is a magnet for the best in the world. Nice read. Thanks Clate.
6 pm to 9 pm is the golden time for family. That is three hours out of 24 that anyone, no matter who they are or what they are doing, sole bread winner or not, can dedicate to their personal life. Making a decision to walk away from that measly three hours is a bad decision in my book and nothing else. It IS possible to have your own business and still have a family life just like it is possible to enjoy a drink here and there and not be an alcoholic.
Clate, As I kept reading your article, I couldn’t stop thinking that you have ‘plagiarized’ my experience!
Entrepreneurs are altogether from a different planet!
Like the Sun, they ‘burn’ themselves to give light to others. Entrepreneurs are the self-illuminating stars of the world. Only the stars can bring the twinkle in the peoples’ eyes….
Alas! All this comes with huge price! Someone, after all, has to pay the price… Apple’s Steve Job left the ‘Smart’ world behind his priced and prized entrepreneurship. His words that he spoke form his sick bed reverberate… “What is the most expensive bed in the world? “Sick bed”. You can employ someone to drive the car for you, make money for you but you cannot have someone to bear the sickness for you…Treasure love for your family, love for your spouse, love for your friends……. Treat yourself well. Cherish others….”
Clate, thanks for such a profound article on enterprise, entrepreneurship….