By Rieva Lesonsky
So you’re thinking of starting your own business, huh? Well, let me give you a little reality check. I don’t mean to bring you down, but the Wave Small Business Report, a new survey on why entrepreneurs started their businesses and what they like (and don’t like) about being their own bosses, offers some news you need to hear before you quit your day job.
First, the good: A whopping 86 percent of small business owners say they love what they do for a living, and 82 percent say the rewards far exceed the challenges. When asked if they’d ever consider working for someone else again, the majority say “Never.”
Why did these entrepreneurs get into business? The majority (57 percent) wanted to be the boss and make the decisions. In contrast, just 18 percent started a business out of necessity because they couldn’t find a job.
Now, the bad: Half of respondents admit they underestimated how hard it is to be your own boss—although 96 percent of those say knowing the truth wouldn’t have changed their plans. Why is it so tough? Time management is the big hurdle—as any entrepreneur knows, there are simply too many things to do and not enough hours in the day. Almost half work on administrative tasks outside normal business hours, and one in five do so on the weekends. Overall, two-thirds of respondents said work/life balance was their top challenge.
Now, the ugly: Almost half (48 percent) of respondents said their business didn’t earn enough for their families’ needs. At the same time, 77 percent said their businesses either met or exceeded their expectations in the past year. Wave sees this not as a contradiction, but as a sign that business owners have a realistic attitude toward the current economy–in other words, they don’t expect their businesses to meet their financial needs right now.
Those figures worry me a bit. It’s one thing to be optimistic (as 66 percent of small business owners are about the coming year), but another to bury your head in the sand. If your business is consistently failing to meet your basic financial needs, you need to make some changes.
That might mean passing on price increases to your customers, marketing more aggressively or upselling existing customers. Encouragingly, some 73 percent of respondents in the survey were planning to expand their product offerings or start new marketing campaigns in the next 12 months.
I’m not trying to turn you off starting your own business, but I am saying you need to go into it with your eyes wide open. And once you’re in business, don’t let your love of being your own boss run your business into the ground.