Starting Your Own Business or Internet Business
We have been bombarded with calls and e-mail messages from people asking how to start their own businesses and especially how to start an Internet business. With so many people getting laid off or otherwise losing their jobs many people are thinking that now is the perfect time to start your own business.
Step 1 – Don’t Even Think About It!
Step 2 – Don’t Even Think About It!
Step 3 – Don’t Even Think About It!
That may sound silly but what I’m saying is just because you might be feeling financial pressure, don’t panic and do something dumb. Many of us are worrying about a job or a way to earn more money, so we decide to "work for ourselves" without really thinking it through. Before you just jump in, let me share a little bit that I’ve learned through many years of self employment.
We have all heard stories about people who are making tons of money with very little work, working their own businesses, often doing something over the Internet. Many of us get excited about a fast and easy fix for our money problems.
The reality is that having your own business is a lot of hard work and those who are making ridiculous sums of money are the exception to the rule. They are the ones prepared to work the hardest and sacrifice the most. The ads that suggest you can do it with no effort are just trying to get you to buy something. Your success is very dependent on how much you’re willing to work at it. There is a woman with a large and successful ministry. People are always saying to her, "Oh, I wish I could have a large ministry like you have." She tells them, "That may be true, but would you be willing to sacrifice and do the things I did so you can have that ministry?"
The same thing applies to having your own business. Starting your own business is so much more work than most of us would ever dream possible. When starting your own business, you often have to work twice as many hours as other people without any paid vacations and with more stress because all of the responsibility for your employees, customers and family rests on your shoulders.
There are so many little details to deal with, like not having someone to take out taxes, social security and other expenses from each paycheck and making sure that you have sometimes thousands of dollars saved up at the end of the year to pay your taxes and other major expenses. If you can’t bring yourself to save $100 a month in savings for personal use, it will be even harder to do for your business taxes and other expenses.
Even though you might think taking care of your accounts will be easy, most businesses need to hire an accountant to get everything right. There are many different taxes and licenses you have to report and manage and it seems that something unexpected always pops up. An accountant should be able to advise you about all of the things you are required to report and pay, and if you don’t realize you are supposed to pay a certain tax, you can be stuck with fines and interest later. These are just a couple of the many little details people don’t often think about.
Myths about owning your own business:
"If I have my own business I can take off whenever I want to." The opposite is true. If we take a week off or even a day we have to work almost twice as many hours the week before and after we take time off because the work still needs to get done. Most customers don’t understand when you say "Oh, I’m going to go on vacation for a bit and I will get you your products when I can." You may think you can take off the first two weeks of June but, when a huge order suddenly comes in from your best customer that needs to be filled right away, it can interfere with your plans.
"When I run my own business, I get to pick my own hours and I won’t have to work anymore overtime!" –Guess again!
Before I became sick, I typically worked 60-70 hours a week. I worked every day but Sunday. That isn’t unusual for a person running a successful business and it’s especially true in the first few years of a business.
"Your time is your own." Think again. You will have customers calling at all times of the night and day and they want things taken care of right now. Even with our website we try at least to take Sunday off but people often get upset because we didn’t get the comments they posted Sunday approved on Sunday.
I talked to an Avon lady yesterday and she said she has customers calling her at 2 and 3 am wanting to place orders.
All of these little things start adding up.
"Oh Boy! Oh Boy! I get to be my own boss. No one will tell me what to do anymore." Wrong. You go from one boss to hundreds or more in the form of your customers some of whom are very demanding, unreasonable and no matter what you do, you can’t make them happy. (Of course we have no customers like that at Living on a Dime :) :) You have friends, family members and customers all telling you what you should be doing and expecting you to make them happy.
The buck stops with you. Running your own business is a lot of responsibility, especially if you have employees. I couldn’t call in sick. If I was sick, I had to get up and work anyway because I had orders to get out. If I didn’t work for a day or two, my family was without money for those days and, when you first start a business, missing one day can mean a weeks worth of groceries.
I have had five successful businesses over the years, two large ones and three smaller ones, but they all seem to have some of the same general problems and things that go wrong. I know your business may be different and you may not think these things apply to you but each business has its own set of headaches to deal with and you’ll need to think carefully and decide if you are up to the stress that these things will cause.
Here are some things we never knew would or could happen and hadn’t taken into consideration before we started:
Your website crashes and burns and you call your tech guy to help only to find he is on vacation for a week and no one else can help you.
You Internet server goes down right in the middle a big sale. (Meaning you could or you do lose thousands of dollars)
You have to spend 2-3 hours a day just dealing with customers who can not understand how to order or use their own computers.
You lose all power for 1-2 weeks because of an ice storm or a hurricane.
If you ship products, you discover that the post office smashes or destroys 10-20% of your packages.
If you ship UPS, they decide to go on strike for weeks, making it harder or cost more to ship things.
Your suppliers don’t get you the supplies you need on time, causing you to be late in getting your product made and shipped to the customer. This is especially bad when the customer needs it on a certain date and you promised you would get it done.
You finally get moved in to your new building and are open for business when the city starts major road construction in front of your store and nobody can get through.
You go out of town for a couple of days only to come back to work to find your shop flooded from a broken pipe, which has destroyed thousands of dollars worth of your product and your insurance won’t cover it.
A wrong hole gets drilled in hundreds of pieces of the product your company manufactures before you realize it is causing you to lose tons of money.
You thought you would get to spend hours in your nice workshop puttering around building your product but discover you have to spend more than half of your time doing paperwork for the accountant and the government and on the phone dealing with customers.
Add to this all the things that can go wrong to an Internet business.
Small Home Business
There are even pitfalls with small home businesses. For example when I started doing ironing, which you would think was pretty easy, I had to think about things like what to do if I scorched a $200 dress while I was ironing it or when the people asked for starch and when I used the starch on the shirt, it stained it.
Then there were all the times people would say they would come by to pick up the ironing or the product at a certain time and wouldn’t show up. They would unexpectedly come by the next day and be upset because I wasn’t still there waiting for them.
Several times, I have spent hours ironing for someone who didn’t pay me. No matter how careful you are, sometimes you don’t get paid for your work. When you are depending on that money to pay this week’s rent or to buy groceries, it can be bad. There are also the bad checks. Often, if a customer writes you a bad check, the bank penalizes you for depositing the customer’s bad check.
With one woman, I spent 2 days ironing a huge amount of clothes and she never returned to pick them up.
Then there are all the things that happen when you add young kids into the mix, which adds in another whole set of things I don’t have room to deal with here– like the baby screaming bloody murder while you are on the phone with a customer.