In the United States alone, well over half a million new businesses are started every year. Unfortunately, on average, just as many fail, too. Of the businesses that do survive their first year, only about half of them will last five years or longer, but a third will stay open ten years or more. There are many obvious reasons why some businesses succeed and some don’t, including lack of proper planning, funding and know-how, internal business disputes, and burnout. By becoming aware of some of the not-so-obvious pitfalls associated with owning a business, prospective entrepreneurs can empower themselves with the information they need to ensure that they don’t end up on the wrong side of the statistics.
The Evolution of Stress
The fact that owning a business is stressful isn’t news to anyone. However, the stress can hit both when a business is turning a profit and when it’s not. Owning a business is always stressful. The way a business owner handles that stress will make a big difference in whether the business succeeds or fails. On-the-spot de-stressing techniques, as well as implementing an exercise regimen, can help the stress manageability factor. But, identifying and correcting the source of the stress (poor employee performance, ineffective marketing) will not only reduce the stress, but strengthen the business as well. Business owners who work to identify the source of the stress, and choose to work through it constructively, are more successful in the long run.
The Importance of Liability Insurance
Businesses are obviously required to carry some forms of insurance (workers comp, state disability, unemployment), but many business owners underestimate their need for carrying liability insurance. Either they forgo it altogether because it’s not a legal requirement, or they underestimate how much insurance they need. There is no way to foresee an accident happening on business property, no matter how many safety rules and mechanisms the owner puts into place. In this age of litigation, uninsured or underinsured businesses end up having to close because of the expense involved in wrongful death or injury lawsuits.
Let’s say you have a small corner store in Houston, Texas and a tragedy happens on your property, resulting in the death of a customer. If you’re properly insured, you won’t have to worry when you get the call from a Houston wrongful death attorney who represents the victim’s family. You’ll know that you’re financially prepared to not only fight the case in court; but that you also have the means to payout should you lose the case. Liability insurance is about peace of mind and less stress for the business owner.
The Judgment of Friends and Family
People are people, as the saying goes, and they’re going to talk. When someone tells their friends and family that they’re going to start their own business, the responses will be as wide raging as the people themselves. Some will be genuinely happy to hear the news, but others will express negativity, jealousy and doubt about the possibility of success. Learning how to effectively deal with the negativity, jealousy and judgmental comments made by friends and family will detract from the stress associated with starting and owning a business. You may need those same doubters down the road, or they may need a job from you. Either way, new business owners are often unprepared for the comments and behaviors of those with whom they associate, naively believing that everyone will be on board with the idea of them starting a new business.
New business owners start off with the deck stacked against them. The difficulty of having to contend with internal, external, and professional stress factors only adds to the challenge of launching and sustaining a successful business. But, through awareness of and preparation for the potential stumbling blocks ahead, new business owners have a better chance of navigating through or around them, and that means there’s a better chance the business will end up on the right side of the statistics.