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 Costs
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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