So you want to be an entrepreneur and leave the 9-5 jive forever? I don’t blame you. I’ve been an employee and I’ve been an entrepreneur, and being an entrepreneur is way better. When I was an employee I was making 30k a year in salary. That 30k per year salary translated to about $17,000 per year money in my pocket. That’s a pathetic amount of money, but I actually lived on that money. I had my own apartment, I had insurance to pay, I had an auto loan to pay and I had bills on top of that.
Burning 10 Challenges are being faced by a new Entrepreneur
I didn’t know that as an entrepreneur, even as a not very good one, you can make way more money than you would as an employee. As an entrepreneur I’ve made more money in single month than I made in full years as an employee.
Can you do the same?
Of course you can. You will face challenges as an entrepreneur, but those challenges pale in comparison to the challenge of selling your soul for a paycheck.
And there are easy ways to conquer those challenges…..
Below are the top 10 challenges you will face as a new entrepreneur – and easy ways to conquer those challenges.
#1 Picking the RIGHT business
Most small businesses fail because they aren’t real businesses in the first place. Pick the right business and your work as an entrepreneur will get a whole lot easier. If your business doesn’t help people, doesn’t provide a solution, or doesn’t give people something they want then your business is shit and it will fail. To do great business you should have a great product or service that you believe in. If you believe in it, you can get others to believe in it. When you don’t believe in something but you tell other people they should buy it you are lying and deceiving.
What you see is what you get should be the motto for your company.
Remember one very important thing, your customers aren’t buying a product, they are buying you. So there is one very important thing you should always do – deliver what you have promised. If you can’t deliver you should always offer a money-back guarantee. You never want people to feel cheated. You never want people to feel buyers remorse, you never want people to tell the world that your company is a scumbag company. Give them what they paid for. If you can’t give them what they paid for give them their money back.
The only way small businesses can have success is by delivering quality. If you can’t deliver quality you can’t make a living. I know it, you know it and your prospective customers know it too.
#2 Financing your business
How do you start a business when you don’t have any money? Good question, and there are two solutions:
Borrow money – I HATE this idea for new entrepreneurs. Unless you’re experienced, know what you’re doing and you’re certain your business can succeed (and grow) you should not borrow a single dime.
Bootstrap – Use only a small amount of money and find a creative way to get your business going.
I’ve started only two successful businesses and I started both for less than $100 and I turned them both into top earners. I’ve never borrowed a dime to start a business.
Personally, I don’t like the idea of starting a brick and mortar business, I like internet business. The growth potential is massive and the costs can be as low as $15-$20 to get started.
#3 Finding customers
Finding customers is only a challenge if you don’t have a good product or service. If you have a good product or service then people will come to you, no need to spend hundreds or thousands on advertising. At least not right away.
There is a certain type of person who will be your customer. Not everybody in the world is buying what you’re selling, so your job is to simply find the people who are in need of your service.
Only try and sell to people who have expressed interest or desire in your product. Never waste your time trying to convince somebody to buy something they don’t already have an interest in.
Never, ever waste time on people who have no want or need for your product. That’s called being “pushy”. Nearly everybody hates pushy salesmen. These type of boiler room salesman do a “hard sell” approach.
Pushy salesman = buyers remorse = refund requests = fewer profits = bad reputation = failed business.
Take a “soft sell” approach. Simply find people who are interested, explain the product and benefits enthusiastically and let your customers decide what they want.
I will personally go out of my way to NOT deal with a pushy salesman, even if I’m interested in what they’re selling. I’ll buy from a nice, calm guy all day everyday before I give a dime to a pushy salesman.
There’s no need to be pushy, if you have a good product you can simply calmly explain your product’s benefits and let your customer decide and it’s win-win for everybody involved.
#4 When to quit your day job?
The right time to quit your day job is when you have a foolproof business opportunity or you have enough money in the bank that you can work on your business and not be evicted from your home.
You’ve got to have money to survive, so quit your job when you a) have a little money to work with and have a real business plan or b) are making an income from your entrepreneurial gig.
When I quit my job as the world’s worst insurance agent I had enough money to live for one month.
I had two signed real estate contracts that I knew were worth some dough. So even though I quit with barely any money in the bank, I was certain I was going to make some money soon.
Those two contracts turned into $4,000 dollars in my pocket one month later.
4k sounds like nothing, but I was making peanuts as a pretend insurance salesman, that 4k saved my life and showed me what was possible. That 4k was the most important payday of my life. I was elated and I’ll never forget that feeling.
That 4k proved to me that I was right in leaving the 9-5 jive. That 4k was just the start of a 100k year.
#5 Dealing with the stress of not having a steady paycheck
There is no other way to put it, it’s extremely stressful when you don’t know when or if you’ll be paid again.
My first business, real estate investing, I didn’t make a steady income, I’d score a big payday then have to wait and wait for another one. I made a few bucks extra per month (about $1000-$1500) but not enough to live on so I needed to constantly do new deals.
I was good at my work so I always had new deals in the pipeline, but it seemed like it was always down to the wire when a new deal finally came through and I had a check with my name on it.
One day it seemed like I was almost penniless, the next day I’d have a check for 10 grand. Living like that can be extremely stressful, so you’ve got to have the mental fortitude to power on, keep working, never give up and never go back to a “safe and secure” 9-5 job.
In real estate investing sometimes deals would fall through and I’d make nothing for my hard work, other times deals would fall in my lap and I’d score a huge payday.
Personally, I recommend a gig where you get paid more frequently. My Bold and Determined empire pays me every single day, day in and day out. Waiting a month or two between paychecks doesn’t happen to me anymore and it’s way less stressful. For this reason I really recommend opening a web-based business.
#6 Managing your money, legal protection, taxes
Managing your money can be a real burden if you don’t know what you’re doing and if you don’t know when your next paycheck is coming through.
I manage my money in a very simple way – I rarely buy anything. I pay my bills, I buy my food, I pay my gym dues and the rest is for business or for the bank account.
I don’t live on a budget, never have, I just don’t spend very much money unless I have to. When you’re building your business I recommend you live like a Spartan and don’t haphazardly spend your money. You may very well have some lean times ahead of you and you’ll want some money in the bank to help get you through.
On the other hand, nothing lights a fire like having no money and needing money. When I started Bold and Determined I had enough money in the bank to live for a year, so maybe it’s no coincidence that it took me one year to turn Bold and Determined into a profitable business.
Taxes are a real pain. When you have a 9-5 job they steal, I mean take, taxes from your paycheck before you even see your paycheck. When you’re an entrepreneur your money comes to you first. So there are two very important things that you need to do:
Write off everything you can for your business. This will save you a ton of money in taxes.
Pay your taxes. It’s one thing to receive a de-taxed paycheck, it’s another thing to get out your checkbook and write a check to Uncle Sam. But you’ve got to do it, just make sure you’ve written off everything you can and taken every deduction you can.
You’ll keep a lot more of your money by preparing your own taxes rather than letting the tax-man loot you. That’s the easiest, #1 step to making more money. The guy that makes 30k as an entrepreneur takes home a lot more money than the guy who makes 30k as an employee.
The tax-man rips you off, he takes every cent he can. When you’re self-employed you’re in control of your taxes and you use write-offs to keep more of your hard-earned money.
You’ll need to set up your business as a business, not a hobby and not as a sole proprietorship.
When is the right time to open a business structure?
I wouldn’t open a business until a) you are making money or b) are absolutely certain of your business.
For Indian small business owners the best structure is a VAT taxed as an Service TAX
A VAT is a “pass through” tax entity. That means that the VAT itself does not pay tax, you pay tax on the profits you receive. The trick to reducing your tax liability is two-fold: start an VAT but tax it as an S-Corp. Pay yourself a small but reasonable monthly salary and once per quarter you can take out a chunk of the profits as a distribution. You will pay standard tax on your monthly salary but the quarterly S-Corp distribution is not looked at as employee wages so you will not have to pay social security or medicare tax on this distribution amount (more tax info).
#7 Dealing with negative people, loneliness and self doubt
The Germans call it Schadenfreude. It means the pleasure people take in seeing others fail. If you have people like this in your life, as most of us do, there is only one solution: cut these energy vampires out of your life.
They’re a mental burden on you because they drain you of energy. Energy that you need to build and conquer. Give these people the boot and do it ASAP. If they aren’t on-board with you, then toss them overboard.
You often hear of successful people how much they’ve changed and how they don’t spend time with their old friends anymore. Successful people don’t have the time or the will to hang out with losers, so they cut them off.
With money and success comes choice, that means you get to pick and choose who you spend your time with. And you don’t have to spend time with go-nowhere nudniks.
You also have the choice to not be lonely. The misconception is that if you don’t go to a 9-5 job everyday and hang out with office drones then you will be lonely. Not true. You’ll only be as lonely as you choose to be.
What about self doubt?
Self doubt is simply a fear of success. It’s hard as hell to be superior and it’s easy to be average and it’s easy to give up and go work a 9-5 job.
All of us feel self doubt at one point or another. An easy way to conquer self doubt is to take a look around you and see all the people who have given up and ask yourself if that’s how you want live.
If that’s not how you want to see yourself then….
DON’T GIVE UP. EVER.
#8 Finding trustworthy business partners, building a reputation
It should go without saying, but I’ll say it anyway. Never go into business with scumbags. Going into business with a scumbag will give you a bad reputation. Your reputation will be linked to the scumbag, even if you’re a man of your word.
It can be hard to tell at first sight who is a scumbag and who isn’t, but you will always find out eventually and when you do find out you must instantly dissolve the relationship with the scumbag.
I had a business relationship with a scumbag, years ago. He scammed people for hundreds of thousands of dollars. People lost their homes. It wasn’t a nickel and dime hustle, the scumbag stole homes from people. I had already severed ties with the scumbag long before this issue so I came out of the situation clean, legally and morally. But my name was still linked to the scumbag from prior deals.
Even though this did not hurt my own business, it left a bad taste in my mouth and taught me a very valuable lesson: Cut scumbags out of your life forever. No 3 strike policy. One strike, then kick them to the curb.
It’s not a moral issue, it’s not an ethical issue, it’s an issue of having a clean soul vs having a dirty soul.
Scammers and scumbags never get away with anything because, even if they are legally in the clear, they still have dirty black souls that will haunt them.
If you help people you help yourself. If you hurt people you hurt yourself. You don’t have to be a tooty-fruity save-the-world liberal. Just be a man and do good business.
#9 Dealing with competition
John D. Rockefeller famously said “Competition is a sin” and I’d have to agree. Why bother competing when you can be an innovator and start something new?
3 years ago there was nothing like Bold and Determined and that’s still true today. Even though I have dozens of copycats (maybe hundreds) nobody can compare.
Hundreds of heavy metal bands have copied Metallica’s unique style and none of the copycats have had the same success as Metallica.
Copying is the path to mediocrity. Pioneering is the path to success.
Ask yourself “what is missing from the market?“. Answer that question and you’re in business as an industry leader.
#10 Hiring employees
As a small business, typically the last thing you’ll do is hire employees. You’ll want to hire employees when your workload is too much to handle yourself and you have the revenue to pay your employee(s).
You’ll hear me mock employees time and time again. That’s because most companies treat their employees like dumb cattle and the employees always complain “I hate my job“. Then the employees go back to the same job day in and day out, like cattle at a feed lot.
But there is a big difference between working for a faceless corporation and working for a small business. As a business owner you will have the opportunity to create a great company that people want to work for.
Your job as an employer is threefold: teacher, motivator, check writer.
You aren’t a babysitter or a personal therapist and you should never act like one but there is one easy way you get your employees to be happy, feel like part of the team, and come up with new ideas….
You give them a voice. You listen to them. They are helping to build your company, they want to be a part of something, and they will often have ideas that you would never think of.
Who should you hire?
As a small business you would be wise to hire freelancers, contractors and virtual assistants rather than hiring traditional employees. Let them take care of their own taxes (they’ll make more money) and it’s less paperwork hassle for you.
Your employees will never be happy with their paychecks, no employee in the history of the world makes enough money, but that isn’t your concern. Your concern is to pay your employees when you say you will.
You’ve heard of employees not being paid before, companies paying late, companies not paying at all and this behavior is pathetic. No man should ever owe another man money, and that includes you as an employer owing your employee money. Even if it means you starve, your employees should always be paid on time.
This one's tricky if you look at the failing business as a problem or as a reflection on the entrepreneur's ability and strengths. In this case, their weaknesses were bigger than their strengths and the business failed. But, just like a kid has to fall a couple of times when learning to ride a bike, so do entrepreneurs fail as they learn how to be successful. Remember, it's the SPARK that the entrepreneur has that is the REAL source of profitability. It's just that there is often a learning curve as the entrepreneur learns to compensate for his/her weaknesses by delegating, outsourcing, maturing, and learning new skills. The Spark usually wins in the end. Note: Just like you can't really tell much to an adolescent because "they know it all," you often can't tell much to an entrepreneur because they DO know it all! Don't try to parent the entrepreneur; you'll lose. Just love them and be there when they fail. That helps them learn faster. Then your business grows and you get rich. And everybody’s happy.
N.B: The author Main Uddin is an e-entrepreneur cum regular columnist for various media houses as well as tech blogger.