We recently provided five practical points on how to start a business, but we didn’t discuss the “why.” The “why” is far more critical than the “how” as it addresses your reasons for starting a new business. Consider these stats:
- Approximately 20% of new businesses fail in their first year
- Half fail by year five
- 65% have closed their doors by year ten
Most businesses fail because of cash flow problems, poor planning, and bad management. A weak “why” won’t get you over these hurdles. These common business problems will only make you wish you never quit your day job if your “why” isn’t right. We want you to look deep into your reasons for starting a new business. And let’s be sure your top three reasons for starting a new business aren’t listed below.
1 – I’m Tired of Being Told What to Do
The worst reason for starting a business is not wanting anyone to tell you what to do. No one likes being micromanaged. We all have an inner rebel. But the truth is, one or two people tell you what to do when you’re an employee. As a small business owner, every customer pays for the right to tell you what they want you to do. Of course, you can ignore your customers easier than your boss, but your customers will leave, and your boss won’t.
Your livelihood as an employee involves pleasing one or two people. This task gets easier with more experience because you learn your job and your boss’s personality. Every customer of a small business owner comes with their quirks and nuances. You won’t please all your customers, nor can you try catering to every whim. Strive for excellent work in every facet, and you’ll attract and keep the customers you want.
Just don’t think starting a business is a way to avoid being told what to do.
2 – I Love Doing ________ (fill in the blank)
The expression goes, “find a job you love, and you’ll never have to work a day in your life.” It’s not “start a business doing the thing you love, and you’ll never have to work a day in your life.”
If you start a business with employees, instead of being a solopreneur, you should do less of that thing you love as each day passes. In our blog post on how to start a business, we discussed five roles in every business. A business owner’s immediate task is to hire employees to do the “thing” so she can focus on the other four roles. Eventually, the owner hires people and uses management software for the other roles so she can lead, cast vision, and drive the company onward and upward.
A business that depends on the owner doing the “thing” will fail.
3 – I Want to Make a Lot of Money
Of course, you want to make a mountain of money. Who starts a business to be broke? But money shouldn’t be your main motivation. This poor reason to start a business covers a lot of ground.
- The odds are against you. You have a 35% chance of long-term survival. Will you keep getting out of bed when your checkbook is bleeding red? You have employees with families who depend upon your “why” being rooted in the right soil.
- The primary desire to get rich leads to poor decisions. You take shortcuts, skimp on quality vendors and materials, pay employees less than they deserve, and accept jobs no one wants. The quality of your work product will suffer, and you’ll lose customers. Elon Musk and Warren Buffet, two of the wealthiest men in the world, don’t get up each morning with a singular focus on making more money. Successful entrepreneurs’ “whys” run deeper.
- The focus on profits over people is misguided. When your adrenalin runs on zeros left of the decimal, you lose sight of the chief vehicle that drives profits – people. People do the work for the people who buy your service. It may seem counterintuitive, but focusing on people instead of your bank account can increase the value of both. Employees care about more than just their paychecks. According to a report by Workday, employees also value how they are treated, heard, and managed.
So, What’s the Best Reason for Starting a New Business?
When profits plummet, customers complain, and employees exit, the only enduring “why” is altruism. You want to help people. Life is replete with problems people face. Businesses that solve these problems, or make the day-to-day a little easier for people, can join the 35% who survive long-term.
“You can have everything in life you want, if you will just help enough other people get what they want.”Zig Ziglar
Chronotek’s owner, Brandon Fox, worked for his parent’s commercial cleaning franchise 30 years ago and witnessed his parents and other franchisees struggle with remote employee management. These service companies often relied on handwritten timesheets to track employee hours, and handwritten timesheets have many issues.
- Employees are late to jobs or no-show, and management finds out too late
- Timesheets are rounded, adding costly minutes and hours to every payroll period
- Job budgets can’t be tracked until the timesheets are turned in
In other words, these small businesses didn’t have live, accurate information needed to make important decisions when it’s most vital to make the decisions – now! Brandon felt their pain, and he wanted to help. He started Chronotek over 25 years ago with one server in his closet. Now, Chronotek has servers all over the country, helping small business owners manage remote employees and control labor costs.
We want you to start a business if that’s your dream, but we want your “why” to be right. And we want to help.
- How to Work From Home (5 Tips from Remote Work Experts) - June 30, 2022
- The Worst 3 Reasons for Starting a New Business (Don’t Quit Your Job Yet) - June 21, 2022
- How to Start a Business You’ll Love (Five Practical Points) - May 31, 2022