If you have a vision for a new company, you might be eager to get your startup off the ground. Being an entrepreneur gives you the freedom and flexibility to set your own schedule, and there’s the possibility of earning more than working for someone else.
But although a startup can be financially rewarding and satisfying, there’s also a dark side.
1. The Odds Are Against You
You can have the best idea and business plan for your startup, but there’s no guarantee the company will be a success. Many people have big plans and believe in themselves. But even if you’re a confident person and willing to do whatever it takes to make your company a success, you can’t predict how the public will respond to your service or product.
This doesn’t mean it has to discourage you, but it’s important to start your business with a realistic view of the future. The truth is, about 25% of startups fail during their first year, and the percentage increases each year of business. Even if your company takes off and earns a lot of revenue early on, business can decline down the road forcing you to close your doors.
2. You Social Life Might Suffer
It’s one thing to have a side hustle or part-time business to supplement your full-time income. But if you want your startup to eventually replace your full-time salary and provide financial security, you’ll pay the price.
Starting any new business will take a lot of your time and energy in the early stages. Because of the time commitment, your social life might suffer. It’s very difficult for some entrepreneurs to find a healthy work-life balance. They might work long hours, get little sleep, and spend less time with relatives or friends.
3. Co-Founders Can Ditch You
When starting a company with a partner, both of you might be excited and eager to work in the early stages. However, as the business evolves, opinions and excitement levels can change. And if the company isn’t as successful as anticipated, your co-founders or partners might break ties and move on, leaving you to manage the business alone.
4. Investors May Not Deliver on Their Promises
You might seek investors to help finance your startup. This is an option if you can’t qualify for a traditional bank loan, or if you need more cash than a bank’s willing to lend.
Unfortunately, when you’re working with investors, there’s the possibility that people who promised to provide funding won’t follow through. This can be a financially stressful time as you struggle to drum up cash to keep your business going. In an effort to save your company, you might raid your savings account or use credit cards, and hope you’re able to recoup and turn a profit.
5. Finding Employees Can be a Challenge
You may need to hire employees to help with the day-to-day operations. But since the company is fresh, you might not be able to offer a high salary or benefits, which can reduce the pool of applicants. Additionally, some qualified candidates may have reservations about working for a new company, especially since the failure rate is high within the first few years.
Although there’s a dark side to startups, if you can overcome the hurdles and move forward, your venture can be a success. This provides freedom, financial stability and satisfaction you never thought possible.
Have you ever been through a terrible start-up situation? Let us know you r experiences in the comments section below.