You might think you know all the potential pitfalls that come with starting a new business — you need ideas for products or services, of course. You’ll contend with competition in your line of business. And you need effective marketing to reach your customers and sell them your product or service.
But hidden among these big challenges are a few less-discussed ones that could trip you up in a big way if you’re not careful. Here are two to be mindful of, as well as tips for coping with them.
1. The impact on your personal life
A W-2 job usually comes with set parameters to establish where and how much you’re working, as well as the schedule you follow. For example, you might work 40 hours per week, and that work is performed from an office building on a schedule of Monday through Friday, 8 a.m. to 5 p.m. (and you get a daily hour-long lunch break).
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Start a small business and all of this goes right out the window. You could conceivably be doing work tasks 24/7, and finding it hard to fulfill non-work obligations. This could present a real problem if you’ve got a spouse, children, or other relationships that take up a lot of your time — they could suffer as a result of you spending so much time getting your business off the ground.
What’s the solution? Honestly, managing expectations and getting serious about taking time off are your best bets here. I’m sure the important people in your life know how vital your business venture is to you, and if for some reason they don’t, tell them, so they don’t wonder why you’re suddenly much less available. And try to build some rest time (where you’re not working) into your schedule — maybe you can make one day a week off-limits for business tasks. Never taking time off will cost you, and you could find yourself facing burnout and mental and physical health problems as a result.
Being self-employed means not getting paid time off through your employer anymore. This was a big adjustment for me when I became a full-time freelancer. I decided at the end of last year that I would give myself the gift of PTO in my savings account. I designated a sub-account as my PTO fund, set a savings target, and now I have a small pot of money that I can draw on as needed to replace income on days when I’m not working. It helps me feel better about taking time off as needed.
2. Legal and regulatory issues
Starting a new business is easy, right? You just need an idea, and the money and wherewithal to make it happen. But not so fast! Depending on what type of product or service you intend to offer customers, and the structure of the business you want to set up, you could be facing far more legal and regulatory hoops to jump through than you may realize, beginning with obtaining a business license.
Think about it: If you’re intending to prepare and sell food, you’ll have to stay on the right side of food service codes and laws for your state. You’ll also likely be subject to regular inspections to ensure compliance. Want to start a home daycare center? My parents have operated one for years, and to stay in business and out of trouble with their state, they are required to complete regular training courses and recertifications.
If you’re intending to grow your business to the point where you’ll be bringing on staff, your potential issues in this area will multiply. You’ll need to pay employer taxes, comply with labor laws, and more. Even if you’re not ready to do this just yet, it’s worth thinking about for the future.
What’s the solution? Research, research, research. The U.S. Small Business Administration (SBA) maintains a lot of useful information for business owners, including a page about legal compliance for businesses. Dig into SBA information, as well as resources offered by your state and local governments about business requirements.
Knowledge is power, and it’s a good idea to learn as much as you can about the laws you’ll need to comply with before launching your business. Consulting with an accountant about taxes and financial issues is also a stellar idea.
Starting a small business can be rewarding on many levels, including financial and emotional. Plus, there really is something great about working for yourself. Just keep these two challenges in mind before starting down the small business path — and be prepared to address them.
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