Ignore the Hype - Straight Talk About Starting or Running a Business.

It’s time to debunk all the useless, but more importantly dangerous, advice that's being published today about starting or running a business. Yes, this is a bit of a rant, because of people being mislead by those that don’t have the experience or authority to tell people how to run a business. Yet no one challenges them. These are the individuals that post hollow statements on social media on what it takes to be a success or do this one thing and your sales will skyrocket, with little or no proof. Yet, they get rewarded with hundreds of likes or comments such as "So true" or "You nailed it". Nailed what? It's fluff! Where are the executional details? There's no meat on that bone. Making a statement without providing the “how” is just BS!

So much of the advice is directed at how to be a successful entrepreneur or, if you’re already in business, how to 10x or 100x your enterprise. It all sounds so easy. But it’s not. Seriously, if it was that easy every business owner would be incredibly successful.

Going into business is incredibly risky and people are unprepared. That's why most businesses fail. These individuals believe that they can just go into business and be rewarded. That's not how it works. Let's get one thing straight. It's not for everyone! Actually, it's not for most people and thinking that it is, is just crazy. All the hype around entrepreneurship is giving people false hope. The traditional failure rate for small businesses is upwards of 85% within the first 5yrs, with 50% failing in the first year and because of all the hype, that number is now increasing. Consequently, the odds of success are not great. But you know what? They never have been.

I’m not trying to discourage anyone, but after seeing misleading posts clutter Linkedin, I want to share some open and honest throughts on what entrepreneurship truly is. I want to make sure that if you’re considering this path that you’re ready for one heck of a ride. Is the end game worth it, you bet it is! But only a small percentage of business owner ever get close to living the lifestyle they envisioned or reach financial independence. Many more manage to make a decent living but not much more. In many situations their existence has been one of worry and stress, with very little freedom.

So, here's 5 things you better understand about being self-employed that no course, post or forum ever tells you.

 Entrepreneurship Can Be Lonely

Being self-employed is one of the most lonely and demanding jobs you'll ever have. Absolutely everything is your responsibility. Sales, marketing, administration, logistics and finances all fall under your purview. You won't have anybody to talk with that can give you direction. Oh sure, people have opinions, but chances are that's all they are, opinions, because most have never been where you are. That's why you better be a self-starter as well as self-reliant. You better be a problem solver. I don't care how positive of a person you are, being in business will test your limits to the extreme.

Where Does Your Product Or Service Stand

You may think you've got a great revolutionary idea, but chances are it isn't. There are no new ideas out there. Everything has been done! Amazon is an amazing success story. It's absolutely mind blowing what that company has achieved in a relatively short period of time. But let's be honest, at its core it's a mail order business and mail order has been around since the fastest mode of transportation was a horse. Sears, Montgomery-Ward, Eaton’s all had massively successful, world beating mail order businesses long before many of us were born.

People would order from the catalog, initially by telegraph, then by phone and the product would eventually show up on the next stagecoach. The stagecoach ultimately was replaced by company owned trucks. What those once great companies failed to do was innovate and that's what Jeff Bezos did. He innovated the process and teched the heck out of the concept. What's ironic is that Amazon is now buying thousands of their own vehicles to provide direct to home deliveries, just like those once great retailers. Another back to the future moment.

Innovation is the key driver today and by definition, innovation is not creating something new, it's about improving something that already exists. Need another example? Grocery delivery, is all the rage, but go back a little in history and you'll see that once upon a time every grocery store in every city had a kid on a bicycle with a big basket on the front of it, that would deliver the groceries right to your door. These orders were commonly ordered over the phone with the local grocer.

Eventually, bicycles were traded for pickup trucks. That alone was an innovation because the deliveries were done faster, and the store could expand its trading area. Because of the explosion of the automobile, this was followed by an era where everybody went to the store, bought their groceries and took them home. Suddenly every major grocery retailer is looking at or reestablishing home delivery. Again, not a new idea.

Do You Have Industry Experience?

Time and again I meet people who are going to change an industry with their idea or product. Although a minor few may achieve that goal, most won’t even get to bat. Why? They have no idea what they’re doing. They know absolutely nothing about the industry they are going to tackle. Even if they simply want to invent a better mouse trap and not revolutionize an industry, there are rules and gatekeepers that make it incredibly difficult and expensive to be able to play in their sandbox.

For example, I meet individuals that want to launch either a new Health & Beauty Aid product (HBA) or food item and want to get it into every pharmacy or food store. When asked about their industry experience, they have none. Little do they realize how much it costs just to develop a product. Then there’s packaging, production facilities, warehousing and distribution and let’s not forget their sales and marketing strategies. Yes, there are co-packing facilities and for hire distribution, along with sales brokers and marketing agencies, that are willing to give you advice and take your money. But without any experience how can you challenge their plans? How do you know that their recommendations make sense for your product? You don’t!

But that’s not the end of it. Once you’ve put your outsourced team together, there’s an even bigger challenge of getting these chain stores to even carry the product. Of course, writing a five-figure cheque for their listing allowance, usually helps the process along, but I don’t know many startups who can afford to write many of those cheques.

The point is, every industry has rules and without experience you set yourself up to be blindsided. Without experience it’s difficult to challenge the advice you’re being given, because you have no reference point. So go get some experience and increase your odds.

Considerations On Sweat Equity

The best people already have paying jobs. To think people will work for free is a fallacy. Always remember, you get what you pay for. It’s pure naivete to assume people will work for months on end, with the hope, not promise, of maybe getting rewarded. People need money to live, so you better expect to pay something for every hour, week or month people work. It doesn’t have to equal industry averages, but you’ll have to pay something.

The other risk is promising shares in return for a reduced or no paycheque, is that if the individual doesn’t work, you’re still stuck with a partner in your business whether you like it or not.

Individuals fantasize about being part of a great startup and reaping future rewards. This works great until they need grocery money. Being in business is not a commune, where everybody shares everything for the greater good. Those kind of ideal, never last long, unless of course you’re opening a commune.

Do You Know The Art Of Bootstrapping?

You better learn the art of bootstrapping, because contrary to what you think, there aren’t rooms full of people waiting to lend you money. No, the reality is that there is very little, if any, money for your idea. Of course, there’s always Shark Tank and Dragon’s Den, to which all I’ll say is, good luck with that! Just remember, those shows are entertainment. In other words, more fictional than real.

Being able to bootstrap your idea is one of the most fundamental skills you can learn. If mastered, it will provide you with the foundation of your decision making for years to come. It will serve to keep you grounded, because you will have learned just how hard it is to make money and therefore set risk parameters that you can live with.

But the best part of bootstrapping is that you’re not beholden to anyone. You own 100% of your company and you don’t have to ask for permission, nor be told what to do. Isn’t that one of the reasons you want to go into business in the first place, for independence?

Going into business is a serious endeavor and has serious ramifications. Let’s be honest, everyone on social media is successful, right? Untold are the thousands upon thousands of companies that fail every year because they were unprepared. It happens because it’s real. Conversely, we never hear about the millions of business owners who quite enjoy the lifestyle they created. They went quietly about their way, building businesses that give them as much freedom as they want, but ask any of them if it was easy and I’ll bet most will tell you it wasn’t.

So, if you’re thinking of stepping onto the entrepreneurial highway, good for you. But remember, the reality is far different than what you’re being led to believe. So, I caution you to – Ignore the hype!

What is your biggest pain point for running your own business? Let me know in the comments.

You can find more of my business insights in 5 minutes or less on my podcast, the Small Business Minute.