Everybody one day wants to own a business of some sort and become your own boss. It is human nature and your ability to achieve that depends on opportunities, your drive and determination to succeed. Whilst owning your own business comes with its own immense benefits it also comes with a baggage of problems that can often become very fatal. It is important that aspiring entrepreneurs recognize this pitfalls and so we will discuss some of them below;
Your Health – Starting a new business can be physically and mentally tasking. For those who are not prepared for the gruesome work involved in nurturing a new business it is not impossible for them to frequently fall ill. A lot of work related illness arise out of stress and lack of proper rest as owners constantly seek ways to innovate and grow revenue. If you desire to own a business some day then you must prepare to deal with the health hazards typically associated with your job. I know an entrepreneur who once slumped on his way to boarding a train to attend a meeting abroad. He was said to be very diligent and hard working, often working late into the night.
Your Family – For most Startups, sustaining a new business requires a lot of time and dedication. This is very much necessary as new businesses always loads of attention to ensure that it is nurtured properly. The opportunity cost of that however is not dedicating enough time to your immediate family. It is also important not to separate your family from your business. A lot of business owners who face frustrations often take it out on their family members. There was this story of a billionaire who lost money during the financial crisis of 2008. He couldn’t stand the embarrassment and decided not only to take his own life but the life of his wife and kids.
Competition – Capitalism is very much associated with competition as such almost every business in the world face some form of it at some stage in their business cycle. For intending business owners, it is important to realize that as you set out to begin your business, you will face intense competition from rival businesses. This can at times be very dirty with your rival employing all the dirty tactics in the world to outwit you. It is basically the survival of the fittest in the world out there as every one strives to eke a living. It is basically the same customers you are all soliciting for, meaning you must ensure your product or service is competitive in terms of price and has an attractive quality. If pricing is no got right, you might end up making your product very cheap making your loose money and eventually run out of business.
Government – In business the Government is also a major stake holder. It has a right to tax the profits your business makes. It also places all sorts of levies and fines on your business in a bid to enforce its regulatory powers. It can give or deny you license to operate. Government policy at any given time is also crucial to the survival of businesses. For example, back in 2005, Ibeto decided he was going to go into the business of importing Cement into the country. After obtaining the licence and investing billions of Nigeria, the government came up with a policy banning importation of Cement. His goods remained in the high seas for years before the government eventually partially lifted the ban. This is after he had lost billions in sales and lobbying the government. Even his health was affected. For aspiring business owners it is important that you know the role government plays in whatever industry you choose to operate.
Employees – Employees are one of the most important assets of any company and as such every business owner strives to keep his best staff. For this reason staff motivation and compensation is a key element of ensuring your retain quality human capital. But motivation and attractive pay package is not enough to retain employee loyalty because human needs are naturally insatiable. Take the case of a small business owner who went through so much efforts to motivate his staffs despite his very limited resources. After succeeding in retaining his pioneer staffs for about 5 years, they soon resigned collectively. As if that was not enough they formed a company which was a direct competition to his basically using his own secrets against him.
Trade Partners – Trade partners are your clients, suppliers, customers, distributors, manufacturers etc. These are the guys you deal with on a daily basis to either get your product manufactured, distributed, packages, sold etc. They can make or mar your business making them a very integral part of your business model. There was this story about Ikea, the world leading furniture making company, indirectly employing child labour for the manufacture of their products. Whilst it wasn’t Ikea who hired them, the fact that their manufacturers did was enough to damage the company’s image. It then means that, it is not enough for you to instill good corporate governance culture in your business, you must also strive to know what methods your trade partners employ in carrying out their activities.
Customers – Customers are kings and as such can be very fastidious. Pleasing them can be difficult in ways unimaginable. Business owners go through several efforts to design and develop ideas that they believe customers will like, only for them to outright reject it. The difference between rejecting and accepting a product or service goes beyond merely working hard to present a product or service of immense quality. The way your product is packaged, advertised, or distributed also goes a long way to determining whether your customers like them or not. Customers can also demand a lot more than just buying your product and even delivering them. Some want discounts, ability to return the product, reject a service etc. All of this involve loads of relationship management and can be strain on you.
Banks – Banks are essential part of almost any business you can think about. They provide businesses with financial services such as depositing money, withdrawing cash, paying for supplies and services, sourcing forex etc. Your relationship with your bank is very crucial to the survival of your business because without accessing to funds your business may be starved of cash flow which it needs to remain solvent. A small business owner who thought he had a great relationship with his banks for years having turnover millions of naira in deposits with the bank suddenly though time was ripe for him to ask his bank for a loans.Unfortunately, for that was not enough for the bank as he did not have physical collateral to give the banks. His offer of a Local Purchase Order (LPO) as an proof of the need for the loans was not enough. So, without that loans he potentially lost millions because he could not finance the LPO.
Law Suits – Businesses are also fraught with law suits, disputes and settlements. It could be your customers who is disgruntle with the quality of supply or services that he received or even the Government suing you for non payment of taxes or levies. Even civil society and pressure groups can sue you for all sorts of reasons. Even a business owner can sue as well. You can sue the government for over taxing you, or your suppliers for failing to deliver or your advisers or lawyers for giving you a wrong and costly advice. All of this, can be costly, no matter whether you are defending or the one suing.
It is important for aspiring business owners to prepare for all of this when the big decision to be an entrepreneur is taken. Always ensure you guard yourself with the right set of ideas, motivational tools and employees. And never forget to create time for your family too.