Congrats! You found your passion! Now what? You have heard everyone tell you how great you are and how you can make money doing this. You are gong ho and ready to start. Well slow your role, hate to be the bearer of bad news. Most entrepreneur will struggle to keep their business a float, according to data from the U.S. Bureau of Labor Statistics, about 20 percent of small businesses fail within their first year. By the end of their fifth year, roughly 50 percent of small businesses fail. After 10 years, the survival rate drops to approximately 35 percent.
I belong to a fb group and it is so amazing the questions and answers that I have read. But when I read the above statistic, I am not surprised. Besides the skills the person possesses, they possess nothing else. Most people don’t follow a business plan or even know why it’s an important guide. No one has educated themselves on the fundamental of running a business. There are too many credible sources (ex: SCORE.org) with the information needed for you to listen to random strangers on a platform. People, with the best intention, offer mostly opinions that are based on their experience. I think if you are going to invest all your time and money into your business, you should consider investing in educating yourself by taking a business class at a local community college, checking out videos on Udemy, or simply looking for a mentor in your area. There is more to business than most people realize. Trial and error is an expensive and painful way to build a business. There is a business side to every industry. I work in the healthcare industry for 25yrs and it’s rare that you find a clinical person with a business mind. The owner of the practice I worked at recognized that he is a doctor and has compassion and empathy for his patients but understood that the business side does not share his views. Instead, the business runs on practicality and profit. Policies are put in place to make sure the two are separate. Without the proper tools, it is hard to run a successful business. You are not expected to know everything but you should know enough so you make informed decisions.
I met a lady who was looking to open up a beauty bar because she is so talented. When I asked her basic questions in regards to running the business part of her beauty bar, she informed me she will be paying someone to do those things so she does not have to worry. I shook my head although I wanted to shake her instead. I asked how would she know if they were doing a good job? or how much of her profit that she hasn’t made yet would she be paying out? How would she pay people? are they 1099 or employees? If they are employees does she understand her responsibilities as an employer? Did she do the math to see which makes sense 1099 or employee? How will she pay for things? Did she understand business credit? I had so many questions and her answers seem not so thought out and I thought she will fail in her first year. I told her to spend the money and invest in information so she can be prepared. I told her the first thing to do is make a business plan and gave her a template and then talked to an accountant. If she didn’t have one get one through recommendations of friends or families and do not use a tax preparer because they are not the same. I suggested that she join a group of salon owners so she can learn about the ups and downs. She couldn’t go back to school but I gave her some ebooks she can listen to so she understand that running a business is more than talent.
Goals without plans are dreams!
