Did you know that Coca Cola spent $74 on advertising and only made $50 in sales their first year?
Adjusted for inflation, they only sold $1,371 in product their entire first year! They also lost $658 after advertising costs. Yet that same company that's worth over $80 billion today.
20% of businesses fail within the first two years according to the U.S. Bureau of Labor Statistics. And that's just the ones who get to the point that they register their business.
Many don't ever get that far. One of the differences between successful entrepreneurs and those who fail is their ability to stick with something for the long haul, even when things don't go exactly the way they expected.
Where are the leprechauns and fairies the ads promised?
Just buy my program, and leprechauns will line up with their pots of gold to dump into your business. Fairies will make your days of drudgery in the office go away on day one too, and you can spend the rest of your life on the beach. Right?
That couldn't be farther from the truth for most businesses.
You need to spend money to make money
Most people start a business to make money. A few do it purely to be charitable, but those don't usually last very long because it takes a lot of work to run a business.
The truth about starting a business to make money is that you need to be prepared to invest cash and time into your business before it'll take off. Websites, buildings, marketing, people, equipment, all of those add up fast. I don't know many successful business owners who can't tell stories of wondering if they'll be able to cover their expenses at some point along the line.
If spending a few hundred bucks registering your business scares you, you might want to reconsider opening a business. You don't need a bazillion dollars to get your business off the ground, but you're also unlikely to make money day one unless you're just mowing yards.
Even simple businesses require investments
Even if you're just mowing yards, which I mentioned in my report Just Mow Yards: 100+ Easy and Profitable Business Ideas, you're going to want to invest in professional equipment at some point.
100+ Highly Profitable Business IdeasProduct on sale
Business is a race against time to become profitable before your funding runs out
Lack of funding is one of the main reasons businesses fail. The game is racing against the clock to become profitable before your funding runs out.
Check out this startup cost calculator from the SBA for some costs you're likely to run into when starting a business. Make sure to fill out a business plan as well if you're considering starting a business.
Running a business is not for everyone
While it can be incredibly rewarding, entrepreneurship is not for everyone. If you don't get excited about creating new things and aren't willing to spend at least a year or two pulling your hair out, stick with your day job.
But for the entrepreneur, there's nothing better
If you are one of those rare creatures who enjoy a challenge, are self-disciplined, and don't mind taking some risks and working your tail off, then by all means, start a business.
Most business owners will tell you they'd never go back to a regular job, even though some of them actually made more money when they worked a daily 9-5.
If you've got the entrepreneurial itch, it'll never go away until you scratch it in my experience. It'll probably even act up in the middle of the night and demand to be scratched. That's why people who are multi-millionaires or even billionaires keep working long past the point that they could have retired. At some point, it's no longer solely about the money. My fellow business owners know what I'm talking about.
Running a business can be rewarding, just have realistic expectations
Don't hold your breath waiting on those leprechauns with pots of gold to show up right away. They do exist, but you'll probably have to chase them for quite some time before you catch them.
Starting a business is hard work, but for the right people, there's nothing better. For the rest of the population, stick with your day job. There's nothing wrong with a steady paycheck and paid vacations, plus you'll lose less hair that way.
About the Author
Happily married with five kids, Smith owns a technology company, is the founder of this site, has served on the board of directors for multiple companies, and loves playing soccer, hiking, and mentoring.
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