I have to admit that from time to time I do miss my big corporate job. I miss my sizeable monthly paycheck, world travel experiences and killer benefits. All of that became part of my past when, in 2009, I found myself unemployed and over-qualified for the jobs that were available at the time. My only option was to hang up my shingle somewhere (which turned out to be in the dark dungeon of a historic building in town) and try my hand as an entrepreneur. Three years later, I have a better office with windows and sunlight and an ongoing list of projects in our queue that keeps us on the right financial track. I am still not making a big fat check, but I love what I do and fight for my agency’s success more that I have ever fought for anything else in my life. Some call it obsession. Some call it endurance. I call it passion.
According to the U.S. Bureau of Statistics, most new businesses fail within the first two years. However, small businesses are vital to the U.S. economy, employing more than half of all private sector employees. If you are insane like me, who decided to open a business in the height the economic downturn in 2009, you need to be realistic about your profit expectations and remain focused.
No one starts a business with the intention of failing. Many people, however, start a business with the odds greatly stacked against their success. It is important to have a well-developed five-year business plan before you decide to test the waters. Here are some challenges that most of us entrepreneurs face within the first five years:
- Insufficient start-up and operating capital
- Lack of realistic planning, including marketing and financial
- Lack of overall business management acumen
- Lack of knowledge of government rules and regulations
- Poor contract language and delay in collecting accounts receivables
- Negative cash flow
- Unpredictable external circumstances
- Misconception of work required to stay in business
- Inadequate skills to keep the business competitive
- Bad hires
I have to admit that although I have an MBA and have worked as a marketer for 14 years, I have encountered all of the challenges mentioned above during the past three years. I like to describe my life as an entrepreneur as an adventure: Every day I learn a something new and discover a new way to work smarter. The key is finding out where your weak spots are, and acting on them before they become a problem. Being realistic about your work, how you differentiate yourself from the competition and how you can stay above water is the best reality check for every entrepreneur. As Winston Churchill once said, “never give up, never give up, never give up.” Some days are better than others, but as long as you are realistic with your expectations and keep your eyes on the prize (whatever that might be for you), the effort is certainly worth it.
Cíntia Miranda is the President of Pulse Marketing Agency. Learn more about her work at www.pulsemarketingagency.com.