Starting your own business is a dream for many people. You get to be your own boss, set your own hours, and there is set no limit to how much money and success you can achieve.
But if you don’t bring your dream to life, that’s all it will ever be.
So why is starting your own business so hard?
In this article, we are going to discuss 7 reasons why it is so difficult to start your own business. We’ll also cover some great tips on how to overcome these obstacles and finally get your business off the ground.
We’ve got a lot to cover, so let’s get into it!
If you would like to see a condensed version of this article in video format, check out my YouTube video on the topic below.
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The information contained in this post is for informational purposes only. It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice. You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.
1. You Can’t Come Up With Any Good Ideas
When you are considering starting a business, you have a million things going through your mind. I have been there.
Now it’s perfectly normal in the beginning to look at various ideas and options, but at some point, you need to start narrowing your focus.
The ideal business should (i) be profitable (or at least have the potential to be), (ii) line up with your strengths and interests, (iii) be feasible, given your resources (money) and time commitments; and (iv) be able to grow and help you reach your financial goals.
Try to remember these guardrails when considering what businesses may be right for you.
Now I admit, those parameters are fairly broad. If you are still struggling to narrow down your choices or you have the opposite problem and don’t have any ideas at all, check out my article on how to start a business when you have no ideas, which includes an extensive ideas list.
2. You Don’t Know How to Get Started
Many people have settled on a great business idea and they have a burning desire to get started, but they don’t have the first clue on how to begin.
The good news is that you have the important parts down – having a great idea and the will to execute it are two huge factors in business success.
But the lack of knowledge on taking the next step can be a hurdle that discourages a lot of would-be entrepreneurs from moving forward.
If this is your situation, check out my ultimate beginner’s guide to starting a business. I take you step-by-step through each phase of the process and offer great resources you can use to get through them successfully.
3. You Let Technicalities Trip You Up
There is a lot of red tape involved in starting up a business.
If you are going to set up a separate business entity, you are going to need a federal tax ID number. This is more formally known as an Employer Identification Number (or EIN for short). You will also need to register your business with your state (usually with your state’s Secretary of State or busines agency).
If you are going to be using a business name and logo, you will need to make sure it doesn’t infringe on someone else’s intellectual property and that it is available to use in your state.
Hint: You can check the USPTO’s trademark search tool (TESS) to do your initial check and your state’s Secretary of State (or similar agency) if you want to check for available d/b/a’s in your state.
You will also need to open up a business checking account and get a general business license (in most cases) and may also need special permits depending on the type of business you will be operating.
Tip for Business Checking Accounts:
If you don’t know where to get started, check out Novo.
They are perfect for new small businesses because they offer no monthly fees or minimum balances, and give you unlimited ATM fee refunds. On top of that, they give you access to tons of other free perks, like major discounts on places like Stripe, Quickbooks and Google Ads.
In my opinion, they are one of the best options in the market.
Now I get it – all of this can feel a bit overwhelming. But the truth of the matter is that these are relatively small details.
Yes, you need to get them done, but you can often hire services that can do them for you (many online). For example Incorporate can take care of a lot of business set up for a relatively modest fee (at least compared to going to a lawyer).
What really matters is coming up with the right idea, correctly analyzing your market and your competition, and coming up with a marketing plan that will get your business off the ground. If your business is going to succeed, you need to be right about the big things, not sweating over administrative details.
Bottom line: Tackle these things head on (and one at a time), but don’t stress over them and certainly don’t let them get in your way.
4. You Don’t Have the Seed Money
Some businesses require a lot of capital to get started while others can be started with far less. But almost any business is going to require at least some money to get going.
If you are strapped for cash and don’t have that seed money, your business dream will remain just that – a dream.
But there are way to overcome this obstacle.
The most obvious thing you can do is to start saving some money. You can also take advantage of online platforms to hold a virtual garage sale. Check out my article on how to sell your unwanted stuff online for some great ideas on how to do this.
Once you’ve got some seed money (or even if you have started saving), I guarantee you that your business dreams will feel less like dreams and more like an inevitability.
You can also make extra money that you can put towards your business by becoming a freelancer on the side. You don’t need any money, experience or education to get started. If you want to learn more about how to do this, check out my article on the 12 easiest freelance jobs for beginners.
If you are open to buying an existing business, another option is to try to buy a business with no money down. Here’s my article on 9 strategies you can use to do just that.
5. You Are Worried About Financing Your Business
Financing can be a scary topic for many budding entrepreneurs. Especially if you don’t have great credit and a ton of resources.
So it’s completely understandable that you may be worried about how you will fund your enterprise.
But don’t let worry stop you. There are a lot of avenues you can explore.
There is, of course, traditional funding through banks (including SBA financing, which often has less stringent requirements).
But you can look at other options as well, including equipment financing (if most of your start up costs are around equipment, such as a laundromat or trucking business). Many of these types of lenders offer 100% financing options.
You can also consider using investment partners (you’ll need to sell them on the idea, of course). You can go low key by asking a few friends or family members. Or you can try to go bigger by seeking out angel investors and pitching your idea.
Credit card advances are also an option, but I would look at them as something of a last resort due to high fees and interest rates that shoot up after the teaser period.
6. You Get Distracted With Other Things
Ok – now let’s turn to some of the psychological things that can stand in the way of you starting a business.
Perhaps one of the most common is getting distracted with other things. We live in a world where we are bombarded with options on how we can spend our time.
There are a million things that demand our attention, including our job, our family obligations, our friendships, our religion (if you practice), and let’s not forget about some of the biggest time sucks out there – entertainment and social media.
While you may be really committed to starting a new business, these competing areas may force you to table your plans and distract you from moving forward.
It happens all of the time (and it has happened to me). I had been seriously considering starting a blog about 7 or 8 years ago, but shelved it because my job started getting busy and I was dealing with raising a young son. But if I had powered through and just started, my blogging business would probably be several times the size it is now.
My best advice on overcoming distraction is to just start your business as soon as you can (while it is still top of mind and you are brimming with enthusiasm over it).
Do it – even if you haven’t perfected the idea and even if you don’t have all your ducks in a row. There’s something magical about actually launching your business – it forces you to care about it on a level that you just can’t when it hasn’t launched yet.
There is this undeniable feeling that you’re vested now and that leads to growth and results.
7. You Get Cold Feet
Starting a business can be scary.
There is fear of losing money, fear of ridicule, fear of wasting a lot of time and energy, and fear that you may never actually be able to find success. Add them all up and it can be a very natural thing for someone to start second guessing their decision.
But you need to know that every entrepreneur has felt this. Every one.
So you need to surround yourself with like-minded folks.
Join forums or facebook groups or in-person communities of people who are in the business you are looking to start. You will be exposed to amazing success stories and will find inspiration. And they can be a tremendous source of support when you are feeling discouraged.
The cherry on top is that they can provide invaluable advice on how to overcome obstacles along the way and can be a great way to expand your business network.
So there you have it – 7 reasons why starting a business is so hard and some practical tips on how to overcome each of them.
If you want to learn about some easy (and low-cost) ways to start earning passive income (which can each be converted into a full-blown business), check out my article on the 9 low cost passive income ideas that work (all under $500 dollars to start).