There are lots of misconceptions about starting up a business. Becoming an entrepreneur is not always as easy nor as hard as you think it might be and that’s because everyone experiences it differently and there are many different ways to become successful. However, underestimating costs and certain aspects of your business could create some bumps in the road as you try to establish and grow your business.
Here are 5 things small business owners tend to underestimate and why they shouldn’t.
1. The Challenge of Effectively Spreading the Word About Your Business
Many small business startups wrongly assume that establishing their new business and sharing the news with their friends and family will be all the marketing buzz they need. I personally don’t like the popular phrase ‘Offer value and the customers and clients will come to you’.
In the real world, things don’t work like that. Unless your business niche is very specific and there aren’t many other competitors in your area or online, you’ll need to stand out and promote yourself heavily when you get started and even afterward.
If you set up a stunning website, that’s not enough to get people to find it on the internet. Focus on promoting your business from many different angles. You can use word-of-mouth and offer an introductory promotion if you are looking for local customers and clients. You can also use social media to your advantage especially Facebook and Twitter.
Facebook ads are a great way to promote a brick and mortar or an online business. For your website, you also want to optimize it for SEO and consider starting a blog to improve your site’s SEO.
Also, consider doing online and offline outreach and networking with others in your industry in order to spread the word about your business. You can submit guest articles to prominent online platforms, be a guest on a podcast, or even ask to speak at an event.
2. The Time It Takes to Market Your Business
Business owners know it takes a lot of time to run a business, but business owners underestimate how much time it takes to market a business. Whether you’re cold-calling people or sending email pitches, expect to spend about 50 percent of your time marketing in the beginning stages.
It’s important to schedule enough time to market your business regularly because it can have a major impact on your earnings especially if you plan to scale up over time. If you work on your for 8 hours a day, expect to spend 3-4 of those hours on marketing and promoting your business during the first few weeks and about 2 hours per day after you’ve already established some customers/clients, have a solid network, and have a website up and running.
When I first started my freelance writing business, I figured I would spend most of my time writing but that wasn’t the case. As a solepreneur, I have to take care of marketing and administrative tasks as well. I don’t earn money directly from doing that type of work but it does have a huge impact on my business’ growth and ability to stay afloat.
3. The Amount of Money It Takes to Stay Afloat
Running a business can be expensive, especially if you’re just getting started. It’s important to know what your expenses are and keep them as low as possible in the beginning. The more money you spend on rent, outsourcing, supplies, advertising and miscellaneous expenses, the more revenues you have to bring in just to break even.
That said, some expenses (like advertising along with the required materials and supplies you need) are necessary to increase your income.
I’d highly recommend organizing all your expenses in a spreadsheet and tracking them weekly or monthly. Also, consider setting a business budget when you first start out so you won’t go overboard and spend more than you make. Sometimes, new start-ups will have a deficit in the beginning, but you should only plan for that if you have some savings lined up to keep you afloat.
Ideally, you’ll want to prioritize your expenses and cut out costs that you can do without so they don’t eat into your profits.
4. The Difficulty of Hiring Great Employees
Your team’s performance can have a huge impact on whether your customers or clients are pleased with your services. Small business owners can’t do everything themselves, and that’s why it’s so common to start outsourcing if you want to grow.
Unfortunately, great workers aren’t easy to find, especially if you can’t afford to pay them well. That’s why it might be better to have a few exceptional employees that can turn potential customers into paying customers than lots of mediocre staff members.
Also, I’d recommend staying away from cheap labor bidding sites if your standards are high because you probably won’t find someone who’s capable of taking on large and specific tasks. Sometimes, you can sell yourself short by getting cheap labor because you won’t get the results you want and you’ll either have to do the task yourself or pay someone else to do it.
To find quality help, ask your network if they have any recommendations or consider conducting a brief interview with candidates you’re interested to see if they’d be a good fit. Always ask for work samples or testimonials of their service and you can even set up a trial service to see if you both like working together before you commit to hiring them or signing a contract.
5. How Much Fun It Is to Be Your Own Boss
One of the best things about being in business is that you get to be your own boss. You get to make all of the decisions. You don’t have to follow rules that don’t make sense or participate in boring unproductive office meetings if you don’t want to.
Find a balance so you don’t take things so seriously, but also so you don’t have too much fun and get no work done. Take advantage of having a flexible schedule if you can’t stick to set work hours on a particular day.
The key is to have fun with it and really savor all the aspects of entrepreneurship that made you start your own business in the first place.
Being a business owner isn’t easy. In fact, you’ll probably work a lot harder than you ever did as an employee. Fortunately, being your own boss makes up for a lot of it. Before entering self-employment, be sure to do a few test runs and run your business as a side hustle first and ask other entrepreneurs about their experience so you can have realistic expectations and avoid underestimating anything important.