What must an entrepreneur assume when starting a business?

What must an entrepreneur assume when starting a business?

An entrepreneur should assume that failure will occur, but success stays from staying consistent. Bad days happen, you’ll doubt yourself, your employees won’t care, and you may even go bankrupt. However, your life won’t change if you don’t actively chase your dreams.

Imagine, starting a successful business that’s actually making you money. You’re making more money than you ever did in your 9-5 job.

Entrepreneurship can make you a lot of money, but it’s a tough road to success.

Luckily for you, I’m going to show you what an entrepreneur must assume when starting a business. After this article, you’ll be more prepared to start your own business than if you had just dived in.

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What must an entrepreneur assume when starting a business?

As an entrepreneur, you must assume you will fail, struggle, and doubt yourself. You will waste a lot of time, your employees won’t care, people will judge, and you will need help. However, the longer and more consistent you are on your business, the easier it becomes.

Building a business isn’t the easiest thing to do. After all, if building a business was easy then everyone would do it.

However, the reward of building your own business is worth it. You can be your own boss and have the time freedom to do things on your own terms.

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You will fail a lot

As an entrepreneur, you should expect to fail and fail consistently. Growth comes from failure and if you’re not failing then you aren’t trying hard enough. Failure can be the best way to learn your business if you can take away lessons from each failure.

Most entrepreneurs think they can open up shop and customers will flow. You’ll be sorely disappointed when you find out that couldn’t be further from the truth. Starting a profitable business isn’t easy and failure is what causes the majority to quit.

You need to be good at learning from failure. When something isn’t working, ask yourself why it isn’t going as planned. You need to be able to pinpoint why something isn’t working and make corrective action.

For example, maybe you aren’t getting any customers. Did you advertise your business so people know about you? Maybe you advertise through your local radio stations and see if business picks up.

Did business pick up? If not, what else can you do to bring in customers?

Entrepreneurship is a constant cycle of trial and error.

You need to understand growth comes from failing. People are scared of failing, which means they often avoid the things that bring in the most revenue. You have to tackle the hard parts of business in order to make more money.

For most people, the hardest part is just getting started. The harder something is, the bigger the potential reward, and the more fearful you are to get started. Just do hard things and success comes.

Success comes with consistency 

Another reason why most entrepreneurs quit is because success isn’t overnight. In order to reach business success, you most consistently take action towards reaching your goals. You can’t compare your journey to someone else’s because they’re on a different path than you.

The majority of people don’t see what it takes to build a successful business. Instead, they think starting a business can happen overnight. Therefore, the majority of entrepreneurs give up when they don’t see the results.

However, success isn’t a straight path. You have to work hard in the beginning with little results. Over time, the results start to slowly trickle in and one day explode into wild success.

You have to take consistent action towards your goals. As the saying goes, “Rome wasn’t built in a day, but they were laying bricks every hour.” You won’t build your business immediately, but what’s important is taking consistent action.

The only thing that matters is how much work you do and how quickly you do it. Speed and cranking out work builds results.

In order to build Rome, you have to lay bricks to reach completion. You could lay one brick per day or 100 bricks. Laying 100 bricks per day will get you to your goals faster.

However, you need to find a pace that works for you. You can’t build a business too slow or you’ll never see success. Alternatively, you can’t go so fast that you burn out.

You will doubt yourself

It is easy to doubt yourself and your abilities when you don’t see results. It’s important to stay motivated and avoid comparing yourself to others. Remember, your life stays the same if you don’t make any attempt at change.

You have to stay motivated when you’re starting a business. Remember, you see little results when you’re just getting started, but the results come later as a result of hard work. Set min-goals and celebrate your accomplishments.

Don’t compare yourself to other successful people because you didn’t see what it took them to reach success. A lot of times you minimize your own success by comparing yourself to other people.

Someone may have ten times the results you do, but they may have put in ten times the work. You don’t know how someone became successful. Often, success comes from the work that nobody saw.

Remember, your life stays the same unless you make change. You have a 100% chance of your life staying the same if you quit. Alternatively, you have a chance of building a great life for yourself if you just keep showing up.

Personally, I wanted to quit when starting my own business many times. I often doubted myself because I wasn’t seeing any results despite how much work I put into the business.

However, the one thing that kept me going is understanding my life wouldn’t change unless I made change. I had to know for myself that I was doing everything in my power to change my life.

Time will be wasted

You are going to waste a lot of time on tasks that produce little results. The important thing is that you recognize which tasks don’t add any value to your business. Understand that time wasting will happen, but it needs to be minimized as soon as possible.

Personally, I spent two years writing and promoting content for this blog that nobody read. Yes it was unfortunate, but I learned how to not run a blog.

Now, I’ve learned what tasks add value for my business and I can focus on the tasks that bring results. I’m not wasting time anymore, which brings the most amount of growth.

In most businesses, only 20% of the tasks bring in 80% of the results. This concept is called the 20/80 rule. The more you can focus on the 20% of tasks that bring the majority of results, the faster you’ll grow.

No profit for at least 2 years

Most businesses don’t churn a profit for the first 2-5 years of business. Businesses are either trying to figure out how to make money or paying off initial startup costs. Therefore, you need to ensure you have enough money to stay afloat for a minimum of five years.

As we’ve discussed, most business owners are trying to figure out their business. You’re going to make a lot of mistakes, which is going to hinder your profits. On average, it takes business owners 2-5 years to find the groove of their business.

Even the businesses that make money have startup costs. Your first few years are going to go back to those initial startup costs, such as rent, bank loans, equipment costs, etc.

Your employees don’t care

Unfortunately, most employees you hire won’t care about your business. Don’t turn a blind eye to your employees and make sure they’re providing enough value. Nothing can hurt your business more than a bad employee.

Employees don’t care about your business and you shouldn’t expect them to care. Your employees have no incentive, other than a paycheck, to work hard. Most business owners make the mistake of thinking their employees will care as much as they do.

Do your best to incentivize employees for performing. Employees respond to positive encouragement and rewards. Do your best to give employees every right to care, without expecting them to care.

Employees should not be left alone to their own devices. Most business owners make the mistake of trusting that their employees are working. Always know what your employees are doing in order to keep them working, not slacking off.

When left unsupervised, it can be tempting for employees to slack off or check their phones. Too much slacking off can ruin your business.

You should get rid of bad employees as soon as possible. A bad employee can be toxic to the workplace or just someone who’s not working. Your business is to new and not profitable enough to support a bad employee

You could go bankrupt

As a worst-case scenario, you could go bankrupt depending on your business. Going bankrupt is every business owners nightmare, so make sure you have a plan in place to avoid it. Ask yourself, “how would my life be affected if I went bankrupt?”

Bad days happen

You are going to have bad days when nothing goes right. Understand that everyone, including business owners, have bad days. Don’t let a bad day get you down, but understand there is always tomorrow.

You need more money than you planned on having

It doesn’t matter your business, you need to have more money than you planned. Something is going to come up that you didn’t plan for and it’s usually costly. Make sure you plan your businesses expected finances for five years and add an extra 30-50%.

For example, you might start a woodfire pizza truck. You’ve carefully planned out your expenses, but you didn’t plan on breaking your pizza oven. Your emergency fund can help you replace the oven, without you breaking a sweat.

People have opinions

People will always have an opinion, good or bad. You will need to develop thick skin and tune out people’s harsh criticism. However, you also need to be able to distinguish between hate or jealousy from opportunities for improvement.

Customers are not afraid to voice their opinions, good or bad. Some might say you have the best products or service ever and others might rate you negatively on Yelp. The less you value other people’s opinions, good or bad, the easier your business will be.

There is a line between hate and room for improvement. You need to be able to distance your feelings from your products or services. You need to be able to separate out haters from legitimate opportunities for improvement.

Going back to the woodfire pizza truck example. Someone might write on Yelp that your pizza crust was a little doughy. Be honest with yourself, is your pizza crust slightly doughy normally or is this a hateful comment?

Don’t be afraid to ask opinions of your friends or family. However, make sure your family or friends know you want honesty. Family and friends will lie to your face in order to protect your feelings, which does more harm for your business.

You will need help

At some point, you will need to accept help from others in order to grow. You can’t run a business by yourself, especially if you want to scale. Be willing to accept help from others if it makes your life easier.

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Summary: What must an entrepreneur assume when starting a business?

As you can see, there are many things an entrepreneur must assume when starting a business. You will fail a lot, but failure can be a good teacher. Success doesn’t come overnight, but take consistent action towards building your business.

Building a business isn’t easy, but you can do it with enough consistency. Make sure your financials are in order and prepare for emergencies. Bankruptcy is a potential outcome if you take on too much debt and can’t generate enough revenue.

Remember, you shouldn’t expect to generate profit for at least two years. In some cases, businesses won’t be profitable for five years.

Bad days happen and people have strong opinions. All you can do is keep moving forward. Look at every criticism as a learning opportunity.

John is the founder of TightFist Finance and an expert in the field of personal finance. John has studied personal finance for over 10 years and has used his knowledge to pay down debt, grow his investment portfolio, and launch a financial based business. He is committed to sharing content related to personal finance based on his experience in his career, investing, and path towards reaching financial independence.