Top Five Things New Business Owners Wish They Knew Before They Started.

Ask anyone who has started a business “what do you wish you knew before you started”, and no doubt the answers will vary depending on who it is, and what sector. However, for those who are looking into taking the brave step into the world of working for yourself, then the answer they will give you is “everything”.

So, I’ve summarised a list of top five responses, in no particular order, I’ve received from people when I’ve asked them this question. So, let’s see:

1) Just How Important Cash-Flow Is.  As obvious as it might seem, and despite the fact that the phrase “cash-flow is king” has been drummed into our collective minds repeatedly, nearly all of us underestimate how much of a worry this is. As having regular cash flowing through your business is as important as regularly having blood flow through your body, you always need to make sure that you don’t run short. Even with a full order book and a promising future ahead, some businesses have gone bust purely on this issue, such as Red Letter Days, which had to be bought out by Dragon’s Den investors Peter Jones and Theo Paphitis.

2) How Much Time It Will Consume.   When you start your business, you will have to do everything! Marketing, administration, legal, everything! Most people will appreciate that this will take a lot of time, but very few correctly estimate just how much of their lives will be dedicated to getting the whole company off the ground and running effectively. It’s not uncommon to hear of people working 16 hour days over six or seven days a week, just to stay above water. Remember, this is normal as well, so don’t think that whatever industry you’ve gone into will exempt you from this. However, we’re normally led to think that such hard work gives good reward. Well, this leads me onto my next item…

3) How Little You Will Be Paid In The Early Years. Anyone driving around in a brand new Ferrari because their business pays them so well didn’t always have so much money floating around. In fact, most people find themselves at the polar-opposite end. Some people have told me of earning the equivalent of pennies an hour (pro rata) because they need as much of the aformentioned cash-flow as possible, possibly for a few years! Hopefully the result of this lack of income is that the business grows to the point that it can sustain a realistic wage for the boss. However, that is a big “if”.

4) Not Everyone Is As Friendly As They Seem.   As the chief decision-maker, you make a the call as to whether a supplier gets your money or not. This means that some less-than-honest individuals will lie, cheat and steal whatever they think they can get away with. This can be a big knock on someone’s confidence to find out that someone has fed them a web of lies to get a contract they now can’t get out of, however it is a harsh lesson that often teaches diligence. Hopefully if it does happen, it doesn’t cause such an effect on the finances that it stunts the businesses’ growth, or worse…

5) Just How Stressful It Can Be At The Start.   Yes, it’s nice working for yourself. It’s nice doing something that you love, and it’s nice to be (more or less) in control of your own destiny. However this doesn’t mean that the constant worry about money (both personal and business), immense hours, slight paranoia when dealing with a salesman and everything else won’t start wearing you down. What’s just as important as all other points above is remembering how to wind down. There’s no point covering all other bases if you’re going to exhaust yourself, as you won’t be at your best when you need to be. Don’t forget to take a bit of time now and then to relax, enjoy yourself, and remember why you made this brave jump in the first place.