Becoming an entrepreneur is a rewarding and fulfilling journey, but it can also be quite terrifying. There are a lot of unpredictable risks involved with entrepreneurship that cause individuals to be extremely careful as they enter into business ownership.
Will there be a market where consumers will actually want to purchase your products or services? Will you be able to make any money during those first crucial years of running your own business? What happens if you completely run out of money and can no longer afford to pay the bills?
These concerns are fair because some entrepreneurs do have to eventually answer to these questions, which is why 50 percent of businesses fail within the first five years. Approaching your own entrepreneurial journey with caution is commendable because you are already thinking ahead to these potential issues, which makes it less likely that your business will succumb to the common mistakes of new entrepreneurs.
However, these financial fears often cost entrepreneurs their dream. It is okay to be concerned with these areas, but don’t let it hinder you from building your company.
You need to spend money to make money.
You are probably familiar with this age-old saying. While it is important that you strike a balance with the money you spend and the money you are bringing in, you shouldn’t tightly grasp every dollar you have. You cannot grow your business unless you put money into it. Initially, you are going to have to invest in your product or service. In order to continue to build your product or service, you are going to need to invest in a physical location. In order to grow that physical location, you are going to need to invest in a team.
Charge what is necessary.
Any good entrepreneur will keep an eye on their competition – what they are doing well, what they are doing poorly, who their audience is, etc. You may be tempted to charge less for your products or services with the mindset that it will bring more people to your business, but make sure you have carefully deliberated this. Some companies overcharge and have a lower-quality product or service than you offer, but another successful company could have already figured out the lowest possible amount that is appropriate to ask for. If you don’t charge enough, you risk overworking yourself and your team, while barely bringing in any profit.
Don’t be afraid to ask for help.
Spending money is a part of business. Not every entrepreneur has access to the initial funds necessary to build a strong foundation or to continue growing through a business’ various stages. Don’t be afraid to seek out business financing. EIN Cap works with small businesses across the nation in bringing their entrepreneurial dreams to fruition. Learn more about how our capital works and see if it’s the right fit for you!