I want to be my own boss. I want to work for myself, not for others. I should be enriching myself, not a bunch of strangers.
A common echo, seductive in its simplicity. Who wouldn’t want to be self-directing, not answerable to others, keeping all the fruits of one’s labour?
The answer is this: YOU shouldn’t want it. That’s right, you.
Wanting to be your own boss is not a good enough reason to start your own business. That reason is about YOU, and the boundaries of your comfort zone. It is not a good enough reason to take the plunge. If it’s your only reason, please think again.
Wanting to be rich is also not a good enough reason. Sure, everyone wants to be rich. But the sad fact is very few of us are going to get rich through the method of starting a new business. We may think we will, by observing seemingly wealthy business owners all around us. But we are misled, because we are observing the survivors, not the casualties. We are studying the small awards ceremony, not the huge cemetery behind the festivity hall.
Globally, it is believed as much as fifty per cent of all new businesses fold within the first year of operation. That’s bad enough, but in African markets we may have an even bigger problem. South Africa’s trade minister recently revealed that the statistic for his country may be as high as five in seven businesses failing in year one. Even of those that survive, a minority actually make a genuine profit. Most just get by, or lose money continuously.
There you go. That’s why I was telling you not to do it.
Why the high failure rate? The reality is, a whole bunch of folks plunge into business for all the wrong reasons: the reasons contained in the first paragraph above. They rush headlong without a proper business idea, much less a set of capabilities or a business plan.
They join a me-too crowd, and mimic everyone around them. They offer nothing of distinction, and add no special value to their customers’ lives. They make basic errors in pricing and in managing cash flow. They confuse cash for profit. They take customers for granted. They run out of working capital. They start spending on themselves too soon. Then they lose heart, and the business dies.
So don’t do it, folks. Keep the salaried job. Let the money come into your account every month. Find other ways to generate additional wealth. Starting a business only looks simple. And the ones that seem simplest, like opening a small shop or eatery, are often the most likely to fail, because of the huge crowd of people opening those very businesses every day.
Are you still reading? Do you still want to do risk it all? A-ha, perhaps you are made of sterner stuff than most. Perhaps you have understood that working for yourself means working sixteen hours a day, not eight. Perhaps you have understood that you will have to lose your sleep and the balance in your life, but you still want to do it.
If that’s the case, then please meet a second condition: have a decent business idea. Please have spotted a genuine gap in the market, an unfilled customer need. Please do something distinctive and unusual. Please be prudent and dogged. Please focus on your customer and not yourself.
Then, maybe, just maybe, you have a fighting chance. The world has no need for a crazy crowd of mediocre wannabe tycoons; it has a screaming need for a smaller group of thoughtful entrepreneurs who devise fresh new products or do things in innovative new ways, and add real value to others. If that’s you, get started. May you enrich yourself as you bring riches to the world.