Since entrepreneurship is a very tough nut to crack, it is always better to know some bitter-sweet facts that are deeply embedded in the unpredictable game of running a business. These facts are like cardinal truths that every budding entrepreneur must diligently follow to keep his entrepreneurial ship sailing through. Even if you’re entrepreneurial ship were to get stuck in a mighty storm, these principles will come to your rescue and ensure that you soldier through these havoc-wrecking times.
Since the canvas of entrepreneurship is magnanimously huge, there are many important facts to take into account. However, we’re covering only five important facts in this article. These five mandatory rules are sufficient enough to keep your feet treading into the wrong path and ensure your business continues to remain healthy & sound even in the long run.
- Start Saving Early: This is very important especially if you hail from a financially humble background. Since your new business won’t generate any revenue for pretty long time, you need to have a strong pool of savings. Although it is a highly subjective thing, but normally a new business does not generate any revenue for one to one & half year. During these tough times, it is your hard earned savings that will help you to hang on to your dreams. It is equally important that you don’t splurge much, which would help to keep your savings intact for a really long time.
- Keep your personal & professional expenses separate: The one mistake that several new entrepreneurs end up making is mixing their personal & professional expenses and making a huge financial mess by doing so. Financial discipline is one practice that every entrepreneur ought to follow. If you seek an advice from any veteran or experienced entrepreneur over this, you’ll come to know simply how important it is to practice financial discipline.
Therefore it is very important to keep separate savings accounts for personal expenses and current account for professional expenses. You’ll need to keep a certain cap over how much money you’ll transfer from your current to savings accounts every month to meet your personal expenses. This cap that you’ll be imposing will be generally determined by foreseeable expenses that your business will be incurring in the coming period.
- Don’t fall into debt trap easily: When you run a business, you’ll invariably feel the need to take loans to meet your business expenditures. Sometimes the lure for taking loans is even greater if you’ve developed the appetite for taking huge risks. However, before taking loans, every budding entrepreneur must understand the difference between bad debt and good debt. There are numerous factors that distinguish these two types of debts. Among other factors, one important factor that makes a debt really bad one is when you take a loan at highly unreasonable interest rate or you take a huge loan when there is still no proper business model to generate consistent revenue.
Actually nothing will help you to save yourself from bad debt more than your own business acumen. In case if you’re really bad in handling debt, it is always better to stay away from it.
- Get acquainted with rules, regulations & compliances: Once you officially don the hat of an entrepreneur, you’ll invariably find yourself in the maze of complicated rules and tax issues. Being a novice in this highly complex world, you’re prone to make some mistakes or mistakenly overlook issues that may prove too costly for your business. However, if you do your homework sincerely, you can spare yourself from such blushes.
Your homework starts from the moment you ascertain whether you want to open a private limited, LLC, partnership or one person company. Different types of companies are subjected to different regulations. Once you decide which type of company you want to opt for, do proper research on rules & regulation.
- Entrepreneurship is a lonely journey: It is tempting become an entrepreneur. After all, it bestows you with unlimited power, fame, money and social recognition. But that is only on the outside, inside entrepreneurship is a highly lonely world. Before fame & money graces your fortunes, you’ll have to tread through the tough world of entrepreneurship all alone. Especially In the early days of your business, you’ll have to brave through the uncertain times on your own. In a nutshell, entrepreneurship is no bed of roses. There are way too many thrones in this unforgiving world. Sometimes these thrones will bite you real hard and there will no one to comfort you.