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October 2010 - Starting a business is a serious business

Starting a business is a serious business

☳ by Adam Aspilla

It is a dream for many to start and operate their own business rather than work as employees under a boss often times they do not like.

First of all operating a business is not like a walk in the park, unlike an employee you are only responsible to do the things spelled-out in your job description. After you work for eight hours you are done for the day and go home, be with your family, and expect to receive your pay cheque every pay day. As an employee you have nothing to worry at all about the business operation except to do the specific job assign to you.

Whereas, when you operate your own business you are responsible for every aspect of business operation which include: sales, accounting, advertising, janitorial, personnel relations, and finance (which covers paying: employees salaries, rent of your place of business, utilities, business licenses and other miscellaneous expenses).

On top of that, before you receive your income or salary you have to pay first, all the expenses mentioned above before you are paid. If there is nothing left, you will not get paid. Not only that, you would work more than eight hours and some of your unfinished works you bring them at home. 

According to statistics, 90% of businesses failed within the first year of operation. Those survived after the first year of operation failed within the next five years.

Why the high rate of business failures? According to studies made, some of the reasons why most new businesses failed are the following:  first, most of those who went into businesses, they started on un-educated enthusiasm, they acted purely on their emotions; second, they don’t gather facts relative to their business; third, they do not ask advice from knowledgeable people; fourth, they do not calculate the cost or capital; and fifth, they do not anticipate or prepare to solve problems that would come along the way.

Business acumen does not guarantee your success in business without avoiding the causes of failure above mentioned.

If you want to start a business it would be wise to start on a part-time basis not to resign from your present job. Once your income on your part-time business is at least equal to what you are earning now, you may consider resigning from your present job and work full time on your business. Unless you are willing to assume the risk of failure and be financially broke as a consequence.

Considering the high rate of business failures, if you are dreaming to start your own business, you have to remember, that, to start a business is a serious business.

 

 

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.