5 Reasons You Should Not Start Your Own Business
In America, we like to celebrate those who start their own businesses. After all, these self-made men and women are go-getters who are eager to grab their piece of the American dream. Eighty-four percent of people polled by Gallup had positive feelings about entrepreneurs. We’re even more enamored with small businesses – 95% of respondents said they had positive feelings about mom-and-pop operations.
Not only do we love the entrepreneurs among us, but many of us aspire to be like them. Roughly 50% of workers in the 20s and 30s hope to eventually own their own businesses, a 2014 University of Phoenix found. Turning the dream of working for yourself into reality is challenging, though. While the much-touted small business failure rate of 90% might be more myth than fact, there’s no doubt that many small businesses don’t survive more than a few years.
“Many potential entrepreneurs have great ideas and a strong understanding of specific industries, but often do not have the business background to turn concepts into profitable ventures,” said Michael Bevis, director of academic affairs for University of Phoenix and faculty member for the School of Business, in a statement.
The harsh reality is that not every wannabe-business-owner has what it takes to set out on their own. Here are five reasons starting a small business might not be for you. If you can’t overcome these obstacles, it may be best to stick to with your full-time gig.
1. You hate planning
A well-thought-out business plan makes it far more likely you’ll be able to turn your idea into a viable enterprise. It probably doesn’t need to be a 30-slide PowerPoint presentation, but you do need to sit down and think about issues like financials, who your customers and competitors are, and how you plan to grow. And that plan should be detailed and based in actual research – a few notes scrawled on a cocktail napkin isn’t going to cut it.
“[T]he strength of your business plan has a major influence on the outcome of your business, especially in the beginning,” wrote business consultant Larry Alton in an article for Entrepreneur. “If your business plan is poorly written, or if it leaves out significant information, it could prevent you from getting the funding, assistance or attention you need.”
2. You love having a steady paycheck
Give up your full-time job and you’ll also give up the security of a steady paycheck and benefits. That’s one reason why you need to make sure you’re financially secure before you hand in your notice to chase your dream. Not only will you probably need to live with less during your business’s start-up phase, but you could face financial insecurity for years to come.
Thirty-seven percent of business owners surveyed by the Corporation for Enterprise Development said they sometimes don’t have the cash to cover business expenses like payroll and utilities, CNBC reported. Some resort to giving themselves pay cuts when times get tough – 23% of business owners surveyed by Citibank in 2012 said they’ve worked for free for a year or more to keep their businesses afloat.
4. You can’t think creatively
Being able to think creatively is another quality common to most successful entrepreneurs, research by Gallup found. For some people, creativity starts with their business idea – they come up with a new product or spot an unmet need in the market. But thinking creatively is important for all business owners when it comes to marketing, identifying new opportunities, and solving problems.
“In order to conquer these challenges, you have to use creative approaches to outsmart your competitors,” professional photographer Yatin Patel told Business News Daily. That’s true whether you’re an artist or an accountant.
3. You can’t deal with risk
An instinctive ability to manage high-risk situations is another one of the 10 talents most successful entrepreneurs have, Gallup found. If you prefer the status quo and get sweaty palms at the thought of taking a chance on a less-than-sure thing, starting a business might not be for you.
Successful entrepreneurs don’t take big risks just for the thrill of it, though. Rather, they’re calculated risk takers who analyze situations and look for opportunities.
“The difference between risk takers and calculated risk takers is the difference between failure and success,” Leonard C. Green, a professor at Babson College, told Forbes.
5. You like the 9-to-5 routine
Sixty-two percent of small business owners work 50 hours or more per week, a 2005 Wells Fargo/Gallup poll found, and 57% work at least six days out of every seven. While those surveyed also managed to find time to squeeze in vacations and family time, if you relish shutting your computer at 5 p.m. and then not thinking about work for the rest of the day, starting a business might not be for you.
“I’ve been dealing with entrepreneurs for more than 30 years now, and I’ve never seen even one of them who worked less while building a business than when he or she was an employee, or a student, or something else,” wrote Tim Berry, an entrepreneur and the founder of Palo Alto Software.
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