Many are misled in thinking that with sufficient capital they could establish and operate a successful business. A successful business needs more than sufficient capital.
It is a dream of many people to start a business one day to become their own boss. They say, “Only if I have capital I will quit my job and start my own business” without considering that operating a business is not that simple as they think. If you are an employee you are responsible only on the job you are hired for base on your job description. And at pay day you will receive your pay-cheque weekly or biweekly whether you employer’s business is losing or not.
If you operate your own business you would be responsible for all aspects of business operations like: marketing, accounting, finances of the business, hiring and firing of employees/workers, janitorial services, and other related functions in operating a business. Moreover, you have to pay first your employees/workers and you are the last person get paid if there is enough funds left in your business.
With many accountabilities to establish and operate a business, if you do not have a business acumen or an ability to manage a business, you would bound to fail regardless how big is your capital. People without their own capital would be able to get capital from financial institutions if they could submit a viable business plan and could demonstrate that they have the know how to operate a business. Capital is not a major factor in the success of the business because banks could provide it. In fact, Dr. Napoleon Hill in his book, “Think and Grow Rick” listed capital among the last of more than thirty reasons of business failure.
An example is woman who received more than $100,000.00 from the proceeds of a life insurance of her husband who passed away. She decided to operate a small business that needed a capital of only $30,000.00. She believed that with her big capital she would be successful in operating her business. Unfortunately, she did not possess the skills of running a business. After a year her business went under, and her more than $100,000.00 capital also evaporated together with her business. Now she is broke and there is a possibility that her house maybe taken over by her creditors.
Before you start operating your own business, you have to take an inventory of your: ability to manage a business; skills, experience and expertise on the business you wish to operate; because business success is more than a sufficient capital alone.
Adam Aspilla is a Senior Financial Counselor of the Debt Clinic of Canada Inc. and the author of the book, You Can Negotiate All Your Debts. He also writes a biweekly column, “What Matters In Life” in “Taliba Newspaper. For free initial, professional and confidential consultation, please call 905-306-7572.