So, what does it take to be an entrepreneur? Well, for one thing, if you have a partner in life, you have to have a plan on which you both agree and an understanding of the commitment a business needs.
I have seen more than one business fail because a wife or husband has said, “Yes, yes.” to a business plan and then has said, “No” when the business took too much of the other spouse’s time. I have also seen a spouse who was so selfish as to quit a job that paid benefits over frivolous reasons even though the household needed every penny it could get.
So if you’re going into business for yourself, you had better make sure you and your partner count the costs. You also better make sure you load up on an extra helping of commitment, generosity of spirit and understanding.
The next thing you need is business capital. This is; of course, is money and the credit needed to do the operations you have to do. The most common source of start-up capital and credit is the family home.
Now, I have seen businesses fail because of an immature understanding of the idea of using a home’s equity for business capital. 70% of all small businesses start off by using the family home for a line of credit. Even so, I saw a business fail because the business would not use the home for a line of credit. This person was bitter about other peoples’ successes and felt that the banks were rip off artists who wanted a credit line secured to a house because they were crooks. Mind you, the fact that that is how successful people start businesses didn’t matter to this person. Everything was about how mean the world is. Well, guess what? The world is mean, get used to it.
Another thing you need to understand when you set up a business is that the law of economics doesn’t care about what you think you deserve to be paid. This law cares about what people will pay you.
And this is a two way street. In one instance, I saw a business that overcharged itself into bankruptcy because the market would not pay the amount that the business owner demanded to be paid. On the other hand, I saw another person who felt guilty charging customers and would apologize every half hour for what he charged. His business failed too.
So find the right price. You deserve to be paid what you are worth if the market will pay it. Haggling is part of any price negotiation, true, but don’t undersell yourself either. You can’t eat rocks if you bid too cheaply.
Also, make sure you get paid at least an amount to cover your costs before you start. Customers can be crooks just like contractors can be.
In line with this, don’t give things away because you expect customer gratitude. Customers will not buy if you give free advice or add on free work to a job in hopes of a bigger job. They will treat you like a sucker though.
Also in a business, don’t work under the table. If you get hurt, insurance will not cover you and the less you report, the smaller your Social Security income is when you need it. (No it will not go bankrupt. In the year 1800, 85 % of the tax revenue of the United States went to service the debt, and we are still here).
See a lawyer too before you set up your business. You may be able to set yourself up so you receive workman’s comp if you get hurt or unemployment in the winter if you do summer contracting. You can definitely protect yourself from lawsuits by the way you are chartered.
Finally, if you have a hot tempered personality, have someone who can talk to customers for you. Perhaps use an answering service so you have a cool down period before talking with unreasonable customers. (Customers also hate answering machines).
Remember making even bad customers angry is not something that is taught in Business 101. They will spread bad reports about you, and some will even lie. And a good reputation is a business’s best assest.