It would be great working for yourself, wouldn’t it? Having flexible hours, answering to no one, being able to come and go as you please and earn lots of cash! This is what attracts a lot of ambitious mothers to self-employment and business ownership, but is the dream the same as the reality?
Let’s have a look at 7 things you should know before owning a business so that you’re not caught out. To help you along, I’ve given you some helpful recommendations too.
1. People are often “not ready” when they start their businesses
Waiting until the time is right or until everything is perfect is just about impossible. The majority of business owners I know, had a plan for starting their businesses, had a few items on a tick list, went through it and started trading.
For others, they didn’t even have a conscious tick list as such. They just knew they wanted to get some clients, found themselves with a client and that became day one for their business. Other business owners say that they just fell into what they were doing.
My recommendation: Understand that you won’t know everything when you start your business unless you’ve worked in your line of business at an executive level before. Don’t fall for the perfectionist’s myth of waiting until something is perfect before you can start it. You can’t perfect something until you actually have something to perfect.
2. Business owners are often muddling through rather than working to a plan
Owners can get used to working with a similar daily situation and get into a routine. This routine is mainly focused on “business as usual” rather than on business growth or strategy.
Board meetings and management meetings might be thin on the ground, especially if the business is small.
My recommendation: Have a plan, even a simple one and meet regularly either with your management team or with other small business owners in a mastermind group.
3. Most business plans aren’t reviewed regularly, if at all, once they’ve been created
Do you have a business plan? Do you know what’s in it? Do the key stakeholders of your business know what’s in it?
Many business owners breathe a sigh of relief when they finish their business plan – if they have one at all. It’s a plan that’s put to one side and only reviewed if there’s a new project coming up or they need to show their plans to someone outside of the business. In my business, we use the business plan for our quarterly board meetings to make sure we’re on top of our plans.
My recommendation: Use your business plan to fuel board meetings. Don’t have a board? Put “Review Business Plan” in your diary at quarterly intervals throughout each year. Go through your plan and see what’s working, what isn’t and what you’d like to change.
4. Business owners aren’t necessarily equipped with human resource management skills
Ever had a horrid boss? Make sure people don’t think of you when they’re asked that question! Also, you don’t want to be lumbered with an employee from hell just because you don’t know how to deal with them.
A happy, motivated team and owner (along with good products/services) moves a business forward.
My recommendation: If you know that you’re going to have a team of people working for you, make it easier for everyone (including yourself) by getting some team management training under your belt. It will give you confidence not only in your team, but in your overall business success.
5. You don’t need to be good at accounts to run a successful business (but it helps!!)
As long as you know the basics of business accounts, you’ll be fine. The basics include:
- Earn more than you spend. If you’re regularly earning more than you spend, you’re winning. Some companies are run on debt – this isn’t my preference at all, but if it’s working for you – great stuff.
- Turnover and profit aren’t the same things. If you have a high turnover but your bills are always higher than your income, you’ll be stuffed just the same as you would be with a low turnover and bills you can’t afford to pay.
- Have an accountant you can trust. She should be willing to explain things to you clearly and break down your accounts for you in laypersons terms if you’re not clued up with the terminology. She should be wanting your business to grow and willing to pass you over to someone else if your business outgrows her.
My recommendation: Take a course in accounts for non-financial managers (unless of course, you have sound accounts knowledge). If you don’t have time for a course, that’s fine, get a book* or jump on YouTube to learn how to read a balance sheet, profit and loss (income statement) and cash flow statement. Ask questions when you meet with your accountant and try to create a rolling 12-week cashflow projection.
6. You might be earning the least in your business
It’s not unusual for business owners to put in lots of hours, especially when their business is just starting up. How do you think that works out in terms of an hourly rate? Often a business owners hours are so many that their hourly rate could quite easily be lower than minimum wage.
My recommendation: Overestimate the amount of work you’ll need to do, factor in that you may not be compensated as well as you’d like. Allow for this in your business plan and work towards making a decent profit as soon as possible so that you can sustain your family and your business.
7. You will make mistakes
This is inevitable (sorry!). Understand this beforehand and don’t be so hard on yourself when it happens. Instead, fail forward: Some of your best lessons are learned from the mistakes you make.
My recommendation: Keep a lessons learned log or something similar so that you don’t repeatedly make the same errors – instead, just learn from them. When the error happens, pick yourself up, dust yourself off and move on. Don’t dwell on mistakes and don’t let them get you down.
Are you planning on owning your own business? Do you already and you’ve faced some of the challenges listed above? I’d love to hear from you below.
If you want to make sure that you plan a life and (business!) that meets your needs, but sure to download the free workbook Planning Your Best Life (& Living It Every Day). Just put your details in below and your copy will come straight to you.
*Some of these links in this post are affiliate links. If you click on them and make a purchase I’ll make a small commission without any additional cost to you.
