Small Business Ideas For The Independent Minded Person

Your Small Business

When most employees think of small business ideas, they think about leaving the 8-5 employee grind. They think about getting their supervisor and the management team out of their lives. They also think about the independent bliss that will come with their own business, and the autonomy it will bring to their lives. They “think” they will be their own boss.

What They Don’t Think About is the:  

  • Difficulty there is in getting customers
  • Difficulty there is in satisfying customers
  • Difficulty that exist in competing with existing businesses
  • Money it takes to run a small business
  • Expertise you must have before creating a small business
  • Money management skills you must have to maintain a business
  • People skills you must have to run a business

Most small businesses fail within the first year, and another majority of those existing will fail by five years. All of the business attributes I listed above are reasons most businesses fail. Of the small businesses that don’t fail, many exist on a day by day basis, barely paying their bills. This falls into a range of most business types.

Small Business Ranges From People Who Sell Socks on the Street, to Major Corporations

The types of small businesses that fail  fall into a wide range of business categories. Most people get their small business ideas from reading about a business success here or there, without knowing the reasons. Some successful small business owners come from people who worked in every department of a business for years, and then they were given the opportunity to take over the business. Some business success comes from a business owner who grew up working in the family business and then became the owner, when a family member passes it on. Then there is the glorified franchise business. The franchisor puts out glorious propaganda campaigns telling you how easy it is to get rich with their business. You find out you made them rich when you bought a franchise, and the difficulty in making money as a franchisee is enormous. For many it is impossible to make money in a franchise, due to the huge franchisee fees you have to pay to the franchisor on a regular basis.

Get Your Own Business And You Will no Long Have a Boss

This is probably one of the biggest myths of a small business. When you get a small business that is called “your own”, whether you inherit it, start your own business, or buy a franchise, you will have many bosses. First of all, in a civilized society we have many laws and rules to live by. This does not go away when you get your own business. For instance in business, the following are your bosses: First the Internal Revenue Service, ( business). There are many IRS rules you must abide by or your business can and will be closed. You must pay income tax on the income you take out of the business, you must declare business expenses for deductions on an IRS schedule for business deductions, and you must pay employee taxes – as well as other taxes. You landlord is also your boss, if you rent a building. You must abide by the many rules of your landlord outlined in your lease, for example – most will require property liability insurance and workman’s compensation insurance. Another boss – and this sounds weird, but it is true – are your employees. Employees must be background checked, trained, trusted and monitored, in order for your business to run smoothly. Either of those missing ingredients can cause major unsets in your business, as well as business loss. Because employees are a major part of a successful business, they are in a major way, one of your bosses.

Small Businesses Have Health Care and Retirement Requirements

When you own your own business no one pays you a pension, no one funds your retirement, and no one pays for your health care. Because of this, many small business owners make the huge mistake of “going without”. Most that I have spoken to felt that they would eventually make “a lot of money”, and at that time, they would fund their retirement account and buy health insurance. The “lot of money” period, never came, then they were faced with a major illness, with no or inadequate health insurance and no retirement account. At this point they were forced to sell their home for living expenses or, if possible, get a job. It is easy to fund a retirement account now, use an IRA, Simple IRA, or SEP-IRA, just to name a few retirement accounts for small business – go to business or retirement. You can get real and affordable health care from the Affordable Care Act now at Before the Affordable Health Care act, affordable or quality health insurance for small businesses was almost non-existent.

Most Small Business Ideas Do Not Produce a Viable Business

There are many reasons for small business failures. The most common seems to be the lack of both knowledge and management skills. Many people look at a glorious profile of a “rags to riches” small business success on television, and think it looks so simple they could duplicate that success. The problem with those types of profiles is that, in the “zest to impress” the viewer, the TV show leaves out several important facts that would explain the owners’ success, which you cannot duplicate. Here are many factors that apply to some small business owners.  These shows don’t tell you when an owner has inherited a lot of money, or the small family business. They don’t tell you when a business owner has received funding from several multi-millionaires (venture capital), who are actually helping to run the business. They don’t tell you when the person worked in a similar business for years before going on their own. These are all very important details you must know before making a decision based on propaganda shows.

How I Acquired My Business Knowledge

I worked my own small business as a dentist for several years. The familiar story I heard over and over was, “dentist make a lot of money”. That is true and not true. It seems that dentist make a lot of money because of payments made by patients. What patients don’t know, is that dentistry is an extreme high over-head business, so money comes in and money goes out, to the hundreds of bills that must be paid monthly. The actual take out is very low. If you are not an extremely good money manager, the take-out usually, is dismal. But, it is the patient payment propaganda that gives the general public the idea that dentist are rich, when in fact most are struggling. The new reason dentist are painfully poor is due to school loans, they are the new poverty mandate. Some dentists are coming out of the — college plus dental school combination — with school loans in excess of $200,000 to $400,000. That amount of school loans will make anyone poor for a long time. The amount is so high that the default rate is also high. Dentistry is only one small business I speak about personally, because I was a dentist for a long time and I know the field. There are many small businesses, and small professional practices that are difficult and sometimes impossible to make a viable living, because of the several factors I listed above, and many more.
I hope this gives you a better idea of small business and what it takes to own and run a successful small business. Many people fail from day one because they simply don’t have the ability to do long hours, have no accounting or people management skills, and don’t understand that they have several bosses, even when they are the business owner.  Funding is another major problem I will discuss in another article.

Lois Center-Shabazz
author of, Live Rich Save Money! Budget Diary
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