A recent article stated that financial reasons are the cause of 80% of startup failures. This makes sense since everything costs more than anticipated in a new venture. Especially for those jumping to a startup from a corporate role, there will be plenty of surprises as the corporate role probably provided “extras” as a part of the job.
In launching my own business, I assumed the only cost would be the product development and maybe some marketing. The following are some of the easily-forgotten costs sapping your piggy bank when pursuing your own venture:
- Opportunity Cost
- Premium Business Banking
- Tax Services
- Premium Subscriptions
- Phone and Communication
- Business Development
Money in Hand
Additionally, many entrepreneurs dream and speak in revenues instead of profits, which is a huge #entrepreneurfail. I wish I had realized this earlier when I provided a service that barely broke even. And that didn’t even take into account my time and travel costs.
What to do?
The moral of this story is to AIM BIG – It is not worth pursuing a business that may only make a fraction of your past salary. You need to pursue a sustainable venture, not just a hobby. Sure the new business may make you happy in other ways, but remember all the costs and the fact that it sometimes takes 2+ years to even get something off the ground. You have to decide if a small-scale business is worth your time.
Were you surprised by all of the startup costs when you started pursuing your own ventures? Tell us about it in the comments below.
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