subject: Five Dangers To Managing Your Own Company Formation [print this page] Before explaining the bad side to running a business, let us not forget the many positives to be had out of having your own company. You could be drinking champagne on your private yacht in a few years from now. OK, that is perhaps a bit far fetched, but you get the idea. A good business can bring rich rewards and a lifestyle your friends will envy. Company formations are mean't to make your life easier!
Running a company can be a huge financial risk. Significant debt can be accumulated through mis-management of your finances. There are several common causes for this situation. Firstly, overpaying your suppliers. You really need to keep a cap on your expenses as a company owner. Alternatively, employ a buyer that is skilled in the art of negotiation. On the subject of employees, try and not overpay, as a big wage bill can cripple you. This is what I have learn't with all my UK company formations.
Some business owners achieve the position of being able to sit back and let everything run for them, while they are on the yacht we mentioned just now. These people are few and far between. Most business owners are very hands from start to finish. My advice is to try and get as near to running the business without you as you can. A business isn't worth running if it doesn't free up your time, and not the other way round.
Most normal, sane people find difficult customers difficult to deal with. There's not much fun in being shouted at for something that isn't your fault. While at the same time you have to be pacify and be polite to them. Again, you either need to become very thick skinned, or pay someone that is skilled in the art of customer service.
You need to get used to red-tape and bureaucracy when running a business. You'll have to handle everything from health and safety issues to making sure you put up no smoking signs. Many companies complain they are less efficient, simply because of all the hurdles that are put in their way.
It's personally draining running a business. Firstly in terms of how much work is involved in setting up the brand, website and systems. Then there is the financial burden. Depending on what business you are setting up, you may need to invest your own money, or borrow from the bank. With this, you run the risk of losing everything.
Please don't let me put you off though. Finding five negative sides to running a business was very difficult. It'd be testing to find anymore bad sides. The rewards can be great, and you really can design and create the kind of life most only dream of. If you do decide to go ahead with company formations, please let me wish you the best of luck.
