Owning a business is a relatively common dream for people to have, but have you ever considered what it takes to make it a reality?
Running a business is not as easy as you think. Ideally, it should be as simple as executing on an idea. However, most people have an idealized version of what the process of starting a business is like.
There are multiple reasons to open and operate a business. Maybe you want to sell the cool product you make, or you developed an app and you want to see it become the next big thing. Maybe it’s the idea of making your own hours and being your own boss where you don’t have to answer to anyone (Trust me, you always have a boss, it’s your customer).
But the reality is you will only get out of the business, what you put into the business. There’s a real difference between what you think being an entrepreneur is like versus reality. So today I wanted to go over what it really takes to become an entrepreneur, and what steps you’ll need to take.
Know what you want
Not everyone wants the same thing out of life, and that’s just as true for any business you own.
Some people are into running their own business to be their own boss and set their flexible hours. Some people just want to spend time on something they love doing recreationally and think they can make money off of it.
Neither of these options is wrong and are certainly fantastic reasons to open a business, but they traditionally aren’t going to become the next Apple or Google.
Having a clear picture of what you want out of starting a business will let you know what it will take.
Owning a business for pleasure is the same as running a hobby business, and there’s nothing wrong with that. However, you more than likely won’t become a multi-million dollar business without putting significant time and energy into it. You have to constantly fight to bring in more money and a better product.
Do you want to own a business with 50+ employees and making 10 million a year? Or do you want to work on restoring old cars, and be the sole worker with maybe one or two employees?
Once you know what you want out of it, it will help you decide what you need to put into it to make your dream a reality.
To have a profitable and growing company, you have to be in it 100%. Maybe that means you’ll work late nights, and have to work weekends, but you want to become a Fortune 5000 company, and you think you can do it. So much for the making your own hours to work less. They say entrepreneurs are people who will work 60-80 hours per week to avoid working 40 hours per week at a job. I can attest to that myself.
Just understand what that is, and taper your expectations for what you want it to be and what you expect it to be.
Understand the sacrifices
Once you’ve decided what you want to get out of your business, you should figure out the sacrifices you’re going to have to make to achieve your goals.
To make your goals a reality, you’re going to have to make sacrifices. You’ll need to make some changes to reach your milestones, or create new goals if you are not willing to make the necessary changes.
Everyone has the dream of making a lot of money and being successful, but to achieve that goal you have to understand the price you’re going to pay.
The expectation I set for myself was to put aside everything in my life when I was young, so I could focus on building my company.
I set aside things like college and starting a family. That way I could afford the family and life that I wanted to give them later in life. I also made the difficult decision to drop out of school to be my own boss.
I knew if I tried to start a family, they would suffer through the rough patches, and I wouldn’t commit to making the difficult choices you need to make when starting a business.
I was willing to put myself through working long days, sleeping on floors, and living in friends basements because I wasn’t generating enough income to live simply. So I sacrificed romance and remained single.
I wanted to have a family. But I realized I would have to make sacrifices in the beginning so that I could spend time with them later in my life. It was a time of hard choices. Instead of enjoying the college life and hitting parties, or settling down and getting married, I chose instead to work my butt off. So when I met the right girl, I was already in a really good spot, to slow down a little to invest in that relationship without the wheels falling off the wagon of the business.
Now, eventually I was able to have a family, but I had to wait longer. Now I can afford to take some time to spend with my family. I’m so glad I sacrificed that time early on.
You can always work more, the company could always be more profitable, but I wouldn’t be happy. I wanted to have a family, and I am willing to sacrifice our business taking longer to grow versus ignoring my family and being consumed only with work. It’s about living your life without regrets.
Play the long game
We’ve been doing this for 12 years, and most people would be shocked how little we made especially in the early years.
It was only in the last few years we started to pay ourselves decent money.
Now don’t misunderstand, we weren’t cheap in paying our employees, but we undercut our own personal paychecks significantly. For the longest time, I would have made a lot more money working another job using my skills than I would as a business owner. Even today, I would get paid more as an employee than what we pay ourselves, but we are still investing in growing the business.
There were a couple of reasons for this. One is just reality; you can’t just begin owning a business and have massive profit in the beginning. It simply doesn’t work like that for 99% of the firm owners. The second was we were playing the long game when it came to growing our business.
For us, we spend a lot of money investing in our staff and internal processes. Once the money started flowing in, we kept our take home profits small and put the money back into the company.
We kept the mindset of where we were going to take as little as possible now so that we can have more later. Mostly delaying the fruits of our labors.
We could have taken the largest profits right from the start and bought cheap equipment or offered few benefits, but instead of paying ourselves, we kept reinvesting and putting that money back into the business.
In the long run, if you want to be successful you have to save and put your money into tools to make your business run better. Instead of simply lining your pockets with all the profits.
Either you’re in or out
I don’t believe you can go halfway. I think in business, either you go all in or get out and cut your losses because you will bleed so much time and money and stress.
I don’t think people realize the sacrifices that entrepreneurs make. Not only putting in the crazy hours but after spending all the time and money, there is no guarantee that you will be rewarded for it. It doesn’t matter if you worked 80 hours a week for a year or two. You can still fail, and nobody is going to pay you for your effort. For example: on an average day I only get 4-5 hours of sleep. I try to have a least a 6-7 hour night in at least once/week to catch up. I’ve been doing that for years. My mind is always going, but just because I put in the time, doesn’t mean that we weren’t or couldn’t have failed.
It’s a pattern that’s formed from my earlier years of overworking and desperately trying to build my business. Because I went all in, I had to sacrifice sleep and a lot of health in my early days.
If you’re not hungry enough, if you don’t want it bad enough, you’re gonna get your teeth kicked in. Trust me, you will have a competitor that will put in the time.
If you have kids, you have to take that into account. If you want to be home by five and have the weekends free, owning a business will conflict with that.
Do you have enough? From a time commitment, money commitment, and it’s always worse than you think typically.
Like everything you want to excel at in life, you have to make the sacrifices to make it a reality. Know what you want, where you are going, and have a plan of action that you can realistically succeed. Then go to work. Good luck my friends!