Time is money. You have heard this before. However, most aspiring entrepreneurs totally underestimate how much it costs to start a business. The organic approach costs those people far more than they would accept to appreciate. That’s because at that stage of their journey, the entrepreneur is full of optimism and ignores the downsides, despite pretending that they have taken them into account.
First of all, the opportunity cost of having a full time salary/wage is just the start of things. People also forget a major foregone investment of superannuation that their employer would be obliged to contribute on their behalf. Also, if the business takes at least 2-5 years to achieve anything like their last salary or wage of the past, then those 2 components alone are enough to make people think twice. What if the business fails at such a level whereby residual and ongoing debt needs to be serviced?
I’m not suggesting for those entrepreneurs to give up their dream of running a business, totally the opposite. I love the entrepreneurial spirit and the opportunity to have a lifestyle far greater than as an employee, however, with one main caution. Don’t do it under-financed. Don’t slog it out in those early years. Statistics often point to 4 out of 10 small businesses failing in their first year and a staggering 8 out of 10 in the first 5 years. Almost in all situations, the lack of funds, cashflow and the frustration associated with this have contributed to these statistics.
Don’t be a statistic, be a successful business owner. To overcome this, I suggest you save up and or borrow to avoid such hard times. Then, with the appropriate funding, you can market yourself appropriately, recruit earlier than otherwise and of course pay yourself from the beginning. If that means working longer and delaying the dream, so be it, otherwise, you will be living a nightmare. Starting a business is a journey that people will take on anyway, but, to do it properly, speak to an expert and a business coach will help you run it correctly. Surround yourself with people who will support you and never doubt you. Most of all, enjoy the journey.