The Dirty Little Secrets of Business - Part 2.

Written by Freya Sykes
on October 23rd, 2007 / Leave a Comment / Print this

Ok you may remember in Part 1, how I told you all about how through hard work you would make a success of business and that no business – no matter how easy the owner makes it look has ever had an easy ride of things.

Well, here in Part 2 I’m going to let you into another dirty little secret of business that the business world will never really own up to.

So what’s the big secret?

It’s simple… Whilst you may make a bit of money in a self employed business you will never make any major money until you come to realise your investment in that business. That is not to say you will forever be stony broke if you go into business on your own but until you come to float your company or sell your shares – the chances are you will not become a millionaire from your venture and anyone who tells you otherwise is either the very, very rare exception to the rule or is simply lying!

It’s why investors always have an exit plan when they initially invest in a company. They know that they won’t realise their investment until they get out and are savvy enough to know that the day to day running of a company is never going to be enough to make them a fortune.

So many companies will not make any sort of profit for the first 18 months often stretching well into the 3rd year of trading. Are you ready for that sort of massive financial burden if you are thinking of going into business for yourself? Can you cover your expenses? Your mortgage? Put food on the table and clothes on your children’s backs? Because that will be the hardest phase of running a business, getting it going. Once it’s going the rest, by comparison, is easy! Trust me.

So how do you get over that initial dry period where you are not making any real money and how does every other business owner around you seem to be doing so much better than you? Well let me tell you the Range Rover Vogue will be leased, the plush offices will be rented (often with a longer lease period signed for with an initial rent free period of maybe 6 – 9 months!) The business owner got a loan from the bank, but what they are not telling you is that the bank put a second charge against their already heavily mortgaged home. Friends and family will have been raided for loans, inheritances will have been sunk into the venture. Even family heirlooms will be sold on to help keep a business venture afloat. They may be factoring their invoices to keep the cash flow alive, but you can almost certainly bet your bottom dollar that the money is not flowing easily through the veins of the business and no matter what that business owner tells you about how good business is, they’ll be muddling through each month, just like every other business does.

So when you look around at the other businesses that are out there and you think – wow they must be coining it in think again. I bet you they’re not…they just know the secrets of how to look like you are coining it in!!