The Downside of Owning a Business

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Google search “how to start a business” and you’ll see over a million results of blog posts, memes, YouTube videos, classes, courses, and business coaches all saying how wonderful it is having your own business and that it’s the only path to freedom and wealth.

You might even see my name pop up. I provide business mentorship to women who want to start or grow a business. I call it, “BUSINESS THERAPY”.

That title isn’t just to be clever.

Running a successful business isn’t all sunshine and rainbows like a lot of people advertise.

It’s like a white water rafting adventure with obstacles to maneuver around, rapids that threaten to overturn your business, and spans of slowness that make you wonder if you’ll ever get to where you want to be.

The drama of owning and operating a business often demands the support and guidance of a (business) therapist.

So why don’t more people talk about the dark side of entrepreneurship?

I have some theories about this…

1. Capitalism.
   New or struggling entrepreneurs are often willing to spend thousands of dollars to get a business off the ground or make it more profitable.If you were discouraged in any way from starting or growing your business you wouldn’t be handing over fistfuls of cash to support a multi-million dollar business advice industry.
2. No one wants to be a Debbie Downer.
   Positivity is trendy these days. It’s all about “inspiring” and “empowering” others. Speak out about the negative aspects of entrepreneurship or even hint at discouraging someone from pursuing it and you’re instantly labeled as a pessimist who crushes people’s dreams.
   .
3. Business owners don’t want to be hypocrites.
   The only people who really know what it’s like to run a business are business owners. I’ve built two businesses and have seen the good, the bad, and the ugly. I’ll never be one to say, “If I can build a profitable business, so can you!” because I don’t think entrepreneurship is for everyone.But I’d be a hypocrite if I told someone that starting a business isn’t worth the struggle and they shouldn’t go for it. Right?

   I’d come across as an arrogant jerk who thinks she’s special and other people don’t have what it takes to own a profitable business.

   (For the record, I don’t think I’m special, but I also don’t think everyone has the skillset, resiliency, and determination required to run a successful business.)

4. No one can predict whether a business will be successful or not.
   I went to our local fair recently and saw a woman selling light-up snow globes. They were plastic cubes filled with various winter scenes and a boatload of glitter that would blow around inside when plugged in.If this woman had asked me if a snow globe business was a good investment, I probably would have laughed and told her not to waste her money or time.

   But it appeared as though she was doing pretty well selling those useless boxes of sparkle.

   You never know if a business idea will take off or crash and burn- until you try it. And no one wants to be blamed for keeping someone from starting a business that could become the next Air B&B or TikTok.

Here’s what it boils down to – you have to decide for yourself whether or not to start/grow business.

But in order to make an informed decision, you need the complete picture of what that’s like – not just the highlight reel.

Allow me to go against the grain, be the bearer of bad news for a moment, and share the reality of business ownership with you.

Here are some downsides of owning a business:

1. New businesses rarely make a profit in the first one to three years.
   Those six-figure launches you see plastered all over Instagram are the exception, not the rule. And what those people aren’t telling you is that they didn’t make any profit on those launches because they spent so much on ads.There’s an illusion that a business will make you instantly rich. It will not. It takes time to build a reputation, figure out what sells, set the right prices, and establish clientele.

   There are no shortcuts.

   Because of this, you need to be prepared to either have another stream of income (a job, a partner’s salary, etc.), have a stash of money in savings, or be willing to go into debt to pay your bills and fund start-up costs.

   Not everyone is lucky enough to have any of those three options.

2. Business owners will work for free.
   There are many moving parts in a business and you can’t charge for all the time and work you put into it.When I started my mental health practice, I charged $125/session. If all I had to do were show up for the one-hour counseling session, I’d have been on cloud nine.

   But I put in hours and hours of time gathering and creating tools and homework assignments for clients, researching diagnoses, finding community resources, managing billing, scheduling appointments, designing marketing materials, and returning calls and emails that when I added all the time, I was making less than the guy flipping burgers at McDonald’s.

   When I expanded my business, I went into massive debt. I was working 30 hours a week and paying myself $0- because there wasn’t any money to bring home.

   Not everyone can stomach working for free – for any period of time. People need to eat.

3. The boss always has to deal with the shit.
   When you own a business, you are at the top of the food chain- the final word, the person in power, the boss. Sounds great, right?It is until you have an unhappy client/customer screaming in your face, demanding a refund, or leaving a one-star Google review for your business.

   It’s all well and good until one of your employees calls off last minute and you have to scramble to find coverage during your dinner date, close and lose a boatload of money, or miss out on your kid’s birthday party to cover the shift yourself.

   Staffing issues? Workplace drama? Not enough money to make payroll? A mistake that could lead to a lawsuit?

   It all falls on you – the owner.

4. Business is a guessing game.
   I bet that gamblers would love entrepreneurship because running a business is like rolling the dice. It’s hard to predict what people want and what’s going to sell- even when you do market research.Last year, I put together an offer to work one-on-one with clients during a VIP day of intensive business and money management strategizing. I worked on crafting that offer for a month and was certain I’d book all my time slots within the first 24 hours of sharing it.

   Zero people signed up.

   I rolled the dice and lost that round. I’m pretty resilient, and I’m not a sore loser, nor do I expect to always win. But not everyone is like that.

   Some people fall apart when things don’t go as planned or want to quit when they lose. These kinds of people probably shouldn’t have a business because entrepreneurship is fickle.

   If you’re going to play the business game, you must be prepared for wins and losses.

5. Cash flow is unpredictable – especially in the beginning.
   Variable income is one of my least favorite parts of entrepreneurship. I’m a planner. I like knowing how much money I can count on from one month to the next and having a plan for every dollar.But business revenue varies greatly from one month to the next and it’s anybody’s guess as to which months will be up and which will be down.

   This is especially true during the business’s infancy stage because you don’t have the history to look back at previous years and see if there are patterns of ebb and flow. It’s nerve-racking to crunch numbers every month to find out if there’s enough money to pay the mortgage or not.

   Months when cash flow has increased aren’t any easier. You still have to make tough decisions about what to do with the “extra” cash.

   Reinvest it into the business? Take it home? Save it for taxes? Give your team a bonus? Keep it to pay next month’s bills in case of a lull?

   Make the wrong decision and you might find yourself in hot water.

Now, I’m not telling you to chuck your entrepreneurial dreams out the window, shut down your business, or give up on the idea of starting one. But it is important to know what you’re getting yourself into and see the full picture of what it’s like to own a business.

I could write ten more articles on how great running a business is, too. The point of this post is to help you see both sides of the entrepreneurial coin.

Now you can take this info and make decisions for yourself.

P.S. I know firsthand how hard the ups and downs of business can be and I’d love to help guide and support you in your business if you’d like some company on the journey. Click here for info on how we can work together.