David Fox

Marketing Consultant, LION

The Real Truth of Business Ownership

June 23, 2014

I was at the gym recently and the woman on the treadmill next to me, named Sally, asked what I did for work. I responded that I was a marketing consultant and business owner, and she said "I've been thinking about quitting my job and starting a business." Having started a few successful (and not-so-successful) businesses myself, I decided to ask her a few questions, based on my experience, to see if she would be a good fit for business ownership.

Here are the questions I asked Sally:

• How do you feel about working long hours, especially in the beginning?
• Are you good at sales? What about marketing? How about management?
• Are you willing to invest your own money in the business?
• How do you feel about not getting paid for awhile?
• Do you enjoy working long hours, or do you prefer 40 hours a week?
• Do you enjoy your company paid vacations?
• Do you like your company health insurance and benefits plan?

Sally answered that she wanted to start a business so she could make more money, build a valuable asset, take more time off and stop working so hard.

I shared a few of my experiences, learned the hard way. By the end of the conversation Sally was a bit frustrated. I had dashed her dreams of earning the big bucks while relaxing and taking it easy as her own boss. She hadn't thought about any of the realities of business ownership, only the glorious idea of kicking her boss (and that pesky steady paycheck) to the curb and "working for herself" without any real understanding of what it means to be self-employed.

I recently read that 53% of Americans have considered starting a business and over 63% of 20-somethings want to start a business. I'm always perplexed by these statistics and wonder if all these people understood the difficulties of starting a business, if they would be so keen to quit their jobs and take the plunge into self-employment?

It took a few minutes for Sally to organize her thoughts, but once she settled down she started asking me questions about starting a business and what it really takes to achieve business success. Here are a few things I think it takes to "make it" as a business owner:

• Business success is all about SALES
• Relationships are really important too
• Get comfortable taking risks (but be smart about it)
• Save money wherever you can. Cash really is king
• Be cheap. Limit your expenses to what's necessary.
• Think simple. Don't buy a Hummer when a Prius will do.
• Stay focused. You can't be everything to everyone.
• Get paid fast (my wife is in the collections industry and you'd be shocked how many businesses have crushing receivables)
• Get a mentor. People who will tell you the truth are priceless.

By the end of our conversation, Sally told me that she didn't feel like she was cut out for self employment and that she was actually grateful to have a good job with so many perks and benefits, not to mention not having to stay up nights worrying about how to make payroll!

For the record, I'm a big advocate of business ownership. But I think people who are considering it should go in with their eyes wide open. Ditch the day dreams that Facebook will come along and offer you a billion dollars for your idea. If it happens, good for you, but don't count on it. Start a business because you are passionate about it, and because you've answered the tough questions in advance and know that whatever challenge comes your way, you'll get through it.

Self-made billionaire Sumner Redstone once said, "Success is not built on success. It's built on failure. It's built on frustration. Sometimes its built on catastrophe". That was written on a Post-It-Note, stuck to my mirror the first few years I was in business. It's great advice.

If you ask the tough questions upfront and are honest with yourself about what owning a business really entails, it can be one of life's most rewarding journeys. But it's not easy. Don't let anyone tell you different.

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