A couple of times lately I have been in conversations with people who either wanted to know about my experiences starting a company, or were considering starting a company and were trying to understand what that meant.
To start a business the commitment needed is significant. If you are not independently wealthy then you are going to have to get financing of some type. The only way to convince people that you are a worthy risk is if you are willing to demonstrate complete faith in the entity yourself.
For Janis and I that meant re-mortgaging our home and borrowing against our RSPs. At that point failure was not an option for us, which does provide a measure of comfort to investors. In addition we had to sign personal guarantees with the bank such that if the company defaulted in any way we were personally liable. So much for the safety of an incorporated entity!
When I tell this to potential business entrepreneurs I get a variety of reactions, but generally people are very “put off” the idea of accepting this much risk. For us the worst case meant restarting over, and we are comfortable enough in our skills that we could get good jobs, so we would just need to buy a house again, and cars and save for holdays and … !
So … having been established for 10 years or more people assume all is now rosy. We have a nice lifestyle, nice cars, nice home and enjoy the benefits of owning a successful company.
A few years back the Ontario government introduced a change to the application of Retail Sales tax that was not “noticed” by our industry for a couple of years. By the time it became an issue we had a potential liability of many millions of dollars. Lobbying by the industry associations managed to bring common sense to bear … and we dodged that bullet.
Life as a business owner is always interesting. Legislative change can come at any moment, the bottom could drop out of the market or a couple of key clients could move their business. Disruptive technologies could have a huge impact or any number of things could wipe out a company. Complacency is never an issue!
So … being a business owner brings a true sense of accomplishment, to create employment for hundreds of people and build something that has value and a strong culture is rewarding. However you do need a thick skin, an ability to sleep under very tough conditions and a belief that you can succeed whatever!
Still want to go for it?