Is it the right time to start your own business? The current unemployment rate is low, and the stock market has been thriving. Many aspiring entrepreneurs are beginning to entertain ideas of launching their own business empires. Despite the allure associated with foraying into the competitive marketplace and starting your own company, however, many people are ill-prepared for the tense business world they dream of conquering.
There are many reasons to start a business – and just as many not to. Here are five reasons that help explain why starting a new business isn’t always the best option to pursue.
Your old business is failing
Sometimes, when a romantic relationship begins to fail, partners may attempt to “take it to the next level” and get married in hopes that this new commitment will solve their problems. Similarly, when some amateur level business operations begin to suffer due to a lack of commitment. It may seem like a good idea to formalize the business and launch it as a real legal entity. They then expect things to take off now that they have “committed to doing it seriously.” In both cases, the same problem is being ignored. Small issues that prevent you from succeeding at an amateur level can’t be dismissed by taking things up to the next level. This will generate additional problems.
If you’re running away from a terrible job that’s not paying your bills, you need to understand that launching a business is a costly and risky endeavor. If you start a business without financial security to bolster you in the case of failure, you could be turning a shaky situation into a total disaster. Don’t overextend yourself and try to do it again if your old business endeavors are failing. Instead, look to what’s going wrong with your current operations and try to right the sinking ship.
You expect to earn a massive fortune
If you’re interested in launching your own business because it will reap you millions, it’s imperative to wake up. Most small businesses don’t earn profits for at least a few years, and many of them fail. About half of small businesses fail before existing for five years, according to the Small Business Administration. While those who make it through the wringer will probably attain profitability, that’s a long-term investment to make if you’re hoping to earn a quick buck by launching a new brand.
A family member has a proposal that’s too good to be true
There are pros and cons of doing business with your friends and family. One of the worst disadvantages is that family members often expect you to back them and their ideas even when they are not founded in reality. The dangers of doing business with your family are many. It is essential to understand that there are few things worse than foraying into a competitive industry only because you were convinced by a close relative. Especially one who you may not be willing to criticize with honesty when assessing their business proposal.
Be aware if you’re being told that you and your brother, aunt, niece, or uncle may be able to make vast sums of money by working to “start a family business.” The financial reality of your situation may hit you hard sooner rather than later.
You want to see if you “have what it takes”
It’s perfectly understandable to dream about starting your own small business – sooner or later, most people give it some thought. What’s less understandable is risking your financial future and public image if you lack serious business experience elsewhere. Is starting a company worth it? Usually, if you have some pre-existing management or entrepreneurial experience that will help you get through the early days. There will be long working hours and tough business decisions that could make even a veteran crack under pressure.
If you’ve never held a serious business job before, consider getting some experience under someone else’s purview. Make sure you have the experience before leaping headfirst into an unfamiliar market environment where you’ll be expected to call all the shots.
You have an unresearched innovation
Countless individuals have claimed to have devised a new method of doing business or to have created a new product that will “change everything.” What too few of these individuals do is check to see if their idea is truly unique. Often, you may think you’ve solved a great market problem and stand to make vast sums of money. Only to find someone else may have patented something similar well ahead of you.
Always research your innovations to determine if they’re authentic and protect-able. Otherwise, you will have wasted valuable time, money, and effort.