5 Myths and Realities of Owning My Own Business

by Ron Haynes

Owning your own business is a dream that many people share, but it is one that many people misunderstand. Owning a business has all the glitz and glamor of Hollywood but it also has all the work and sweat of Dirty Jobs. Before you take the leap and spend your life’s savings on a “golden opportunity,” take a few minutes to read about the myths and realities I faced in owning my own business.

For the record, I’ve owned two very successful businesses. One was a shaved ice business in a college town, the other was a very large and thriving lumberyard in a much bigger city. I learned a great deal from both experiences.

Myth #1 – Life is easier when you’re your own boss and you own the business.
Reality – Nope. Not a chance. You become the face of your company. Anything that goes wrong, or that doesn’t go perfectly right is 100 percent your fault. You have to fix it. If one of your employees drives your $45,000 delivery truck across a newly poured concrete driveway and cracks it to pieces, you get to pay for it. If your credit manager mistakenly writes down the wrong lien date on the legal paperwork, you get to eat the loss. If you screw up on your taxes, you don’t get to blame anyone else. If someone claims they got sick at your restaurant, I hope you have insurance and a good attorney. You get to pay both of those bills, too.

My experience – You DO get to make the decisions when you’re the boss, but owning your own business is not a ticket to sit in an air conditioned office all day, surfing the Internet and ordering people around. It is a lot of hard work and you will do the majority of it. It requires a great deal of commitment to your customers, your employees, and your vendors. You need all three to be successful.

I never could understand why I was twice as old as some of the people I hired, yet I could easily outwork any 18 year old. Then it occurred to me; this isn’t their company. They aren’t motivated to build this business into something. I showed up every day because I was passionately working to create a company. They were there for a check.

Myth #2
- Your new company can make a boatload of money and you get to keep it.
Reality – Everyone has their hand out. Building inspectors, insurance people, health departments, city police and fire departments, OSHA, county tax assessors, state sales tax departments, city business license departments, radio stations, advertising agencies, temporary help agencies, delivery companies, asbestos removal companies, and charitable organizations will ALL want a piece of the action. Most days, it feels like the local governments DO NOT want you to open your business because there are more road blocks to getting open than you can ever imagine in 1,000 years.

My experience – When I opened my shaved ice business, I was completely clueless about what to do. I found someone to build my building and then I moved it to my location. Next I needed water and electricity. I called a plumber. He hooked me up pretty easily. Getting electricity would be easy, or so I thought. After all, the building was completely wired and had 200 amp electrical service (twice the local code requirement). Would you believe me if I told you that it took 6 weeks to get the electrical inspector to approve my building? Nothing, NOTHING had to be done to get it up to code. He just delayed and delayed. Later I found out that there was a corruption sting and he was indicted. I could have had electricity in one day if I had played by “the rules.”

Myth #3 – You get to set your own hours.
Reality - This one is true! Yippee! You DO get to set the hours, trouble is, every hour you aren’t working is an hour that you’re NOT making money. The rent must be paid. The utility bills must be paid. The accountants must be paid. The equipment loans must be paid. The employees must be paid. The insurance must be paid. None of that goes away…ever.

My experience – When I opened the lumberyard with my partners, we decided to close on Saturdays and Sundays. We wanted to allow ourselves and our 12 other employees time to spend with their families. In the early days, it was easy. We usually went home no later than 5:30. We usually finished on Friday afternoons at 2 o’clock and would clean the yard and warehouse, then go home and enjoy the weekend. But we were victims of our own success very soon. We started having to come in at 7:30 then 7:00. Then we moved it back to 6:30 and then 6:00. We started staying later as well. Many days I would work from 6:00AM until 9:00PM with no breaks. I just didn’t have time to slack around. It didn’t feel like I was a highly successful business owner. I was working harder than ever in my life and my family rarely saw me until the weekend.

Myth #4
– Money is the most important ingredient to new business success.
Reality – Money is important to get the ball rolling, but it is only a tool. Money is to the new business owner what a hammer and chisel are to a sculptor. In Michaelangelo’s hands those tools created a masterpiece, but they were just tools. The most important ingredient to a new businesses success is a drive to create a company where there was none.

My experience – This drive to create is what pushed a couple of guys to build a $10 million lumber company from scratch. Entrepreneurs thrive on the creative effort and usually have a very strong competitive streak. We wanted to become players in the industry and make our presence known.

Myth #5 – Once you start a business, you can hire employees to do the hard work.
Reality – YOU will do most of the hard work, at least in the beginning. No one in your new company will be as able as you for quite some time. You will be the trainer, the worker, the collector, the PR person, the HR person, the buyer, the bookkeeper, the sales person. You will have to teach everyone your way of doing things and then follow up to insure those things were done correctly.

My experience – I ran the shaved ice business by myself for the most part. My mother came and helped me out of the goodness of her heart many times (thanks Mom!), but I wore every hat imaginable. The lumberyard was much the same for the first few years, though I did have partners. My day would begin at 6:00AM with me starting our 7 delivery trucks to get them warmed up. Then I might take a quick inventory to see what needed to be ordered, look over and prioritize our other deliveries for the morning, pull a few lumber orders and stage them, come in and make a collections call, place a few purchase orders with some vendors, run make a bank deposit, pick up an order from a local vendor, come back and jump into a truck to make an “emergency” delivery, stop and make a sales call at a job site, come back to the office and calculate how much lumber a new account needed to build a particular house, then start loading trucks for the next morning. It was a non-stop rush all day long, but that was what we wanted, right? You better believe it!

In my experience, most people think running a business is relatively easy, but the reality is that it takes more dedication, drive, passion, patience, and insight than anyone understands. There are fantastic rewards, to be sure. I made more money with these two ventures than I had ever made in my life up to that point. I also worked harder than at any time in my life. There are nights that you lie awake, wondering how you’ll solve a problem or how you’ll make payroll on Friday. Those are trying times, but that testing of your dedication produces endurance and persistence…if you resolve to never give up.

Starting and running your own business has rewards that you can’t quantify. There is a deep satisfaction when you realize that you’re providing a way for 10 families to make a living, or when you can look at a large hotel or elementary school and know that you provided the materials to build it.

Don’t let the realities of starting your business scare you. If they do, then you don’t have the passion. If you read about the realities and difficulties and have already started thinking of ways to overcome them, you’re on the right path to succeed as an entrepreneur.

[tags]entrepreneurship, business, start your own business[/tags]

About the author

Ron Haynes has written 1001 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.


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{ 12 comments }

Emily

wow. What a well written article! I’ve never been a business owner but when I was working in property management and dealt with contractors all day, it was always the small business guys who started their own companies that were answering their phones, dealing with the customers, and busting their butts. Something went wrong and the owner was there. Not a manager, not anyone but the owner at any hour of the day. That opened my eyes to the reality of owning a business at least in the beginning. I know a lot of people who DO have businesses and they either aren’t willing or aren’t able to put that energy into it, but it sounds like when you know what you’re facing and do the work, it can be highly rewarding. Thanks so much for sharing such great insight. I really enjoyed it.

Ron

@Emily:
Thank you Emily. The reality is, if you’re not willing to put in the hard work, you will not make it. Owning a business is not a cakewalk. It has it’s rewards and if you do things right, those rewards are very, very high, but it all comes at a price.

Mrs. Micah

I think in the long run, I’m not the type to even want to run a business. Maybe I’m the type to do freelance work…which is different on a number of fronts even though you’re self-employed or even work in a not-so-bad office. I don’t like the part of freelancing which involves carrying the headaches of work time into my spare time.

Ron

@Mrs. Micah:
One of the most frustrating parts of running a business that I experienced was collections. We were pretty cash strapped in the early years and people would delay payment. I knew they had the money and didn’t want them to delay further, so I had to walk a fine line and it isn’t easy!

Freelancing sounds like a great way to go, especially if you get paid on time!

LP

We had a business in the transportation sector for many years.
A “not so honest or capable” CPA let us get into a financial bind with the IRS.
We almost didn’t come out of that. But did, thank the Lord!

When you start a business, you are never aware of the hills and bumps that await you.

But with all honesty, I can tell you that the time spent with your family, while building a business is well worth the effort.
Times are the same….no matter the date.

This is a good compilation of attitudes to have and things to do to create a solid business. Whether it’s a lemonade stand or a computer shop. Or as you had, a lumber business.

Thank you for the run down on what is considered a dream! To own your own home, and business.

Capitalism is still alive in the hearts of mankind!!! Yeah!!! :-)

AJC @ 7million7years

You’ll never make more money OWNING a business than SELLING a business … before I even start any business now, I focus on WHO (not necessarily THE company, but the TYPE/RANGE of companies who may become Strategic Buyers) I am going to sell it to, and when (neither is necessarily in your control, but it’s good to have a plan).

Now, I’ve made hundreds of thousands annually owning businesses (and still do), but I’ve made millions by selling others … I can tell you which one is easier!

Ron

@AJC @ 7million7years:
Wouldn’t a lot of that success in selling depend on the multiples you were using to set your price? Historically, lumberyards have been a 5 or 6 but right now they’re in the 3′s and 4′s…if even that much. When we started the lumberyard, we were anticipating selling it in 2 to 3 years, but that never panned out because we were making unreal amounts of money compared to our peers. We worked like crazy to keep costs low and out NP to Sales percentage was 4 to 5 times the industry average. Using the multiples that were common at the time would have priced us out of the market for a sale.

Shama Hyder

Ron, great article!

I agree with all the myths-especially #2!

This why only 1 out of 7 businesses makes it past the 3 year mark.

Ron

@Shama Hyder:
People have the tendency to overestimate their sales and underestimate their costs, especially startup costs. They also underestimate the number of days it will take to even get the doors opened. It always seems to take longer to get the doors open for business than you imagined.

I wasn’t kidding about the local and state governments, either. They seem to be working against you. Today, I work for a pretty large chain that’s expanding in several states. Our biggest roadblock is the local inspectors. It all depends on which one you get. Some are easy to satisfy, others are impossible.

Aura Mae

Re: Myth 1

My 16 year old recently left her job at a new franchised business because she and the owner didn’t see eye to eye on why the teenager was working there. The owner’s last statement: “It seems like all you want from us is a paycheck.” As a fellow small business owner, I wish I could explain to her that all of the people she employs will be there for a paycheck. They don’t LOVE the business like you do and never will.

Rebecca

I am currently writing a paper in my Business Management class on Entrepreneurship. You said you owned your business, did you consider yourself an Entrepreneur?

Ron

#Rebecca→
Certainly! I’ve owned several.

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