Are you considering the life of an Internet business business owner? Well before your eyes gloss over with dreams of endless free time and images of sitting on your couch with your laptop clicking away earning you thousands let me show you the reality of the situation.
A certain image has been promoted of the Internet business owner. It’s often glorified as the great dream, leaving your old job, with the long hours and annoying boss in exchange for a flexible lifestyle that you are in control of.
Well let me tell you - it’s all true!
Well sort of. It’s not by any means easy to do and you lose many things you might have not realised you valued in your old secure job. Let me point out the things you lose that you might want to think about before quitting your job.
1. Say good bye to a reliable and predictable income.
No job is 100% secure and there is a good argument that being in control of your income via your own small business is more secure than a job (you’re not at the risk of downsizing etc) however it doesn’t feel like that, especially when you start out. Even the oldest most established business cannot be certain sales will keep coming. From week to week you go up and down and are never sure when or where your next sale will come from. You can have great months and bad months and the only constant is unpredictability. A steady pay cheque feels a lot more secure than the ups and downs of your own business.
2. Your business is your life.
When you leave work you leave work. Most small business owners live and breath their business so they don’t ever really leave work. Now I’ve got it pretty good at the moment because I love what I do and I don’t *have* to work much though I choose to work online a lot. That being said I am trapped to checking my email day in and day out, 24 hours a day, which is not ideal. Chances are when you start your business you won’t be working 9-5 or even 8-6. Early on you will most likely carry the show and until you can justify hiring others your hours will be long and you won’t have a weekend. However if you are smart, set realistic expectations and remember life is a balance, then running your own business can definitely be less work than a normal job, if you choose it to be.
3. You may never make real money until you sell your business.
An unfortunate situation in many small businesses is that the owner often doesn’t make much more than an average salary, sometimes less. Now if you are evaluating starting a small business based purely on financial rewards then you might want to change your assessment criteria. Many small business owners don’t make a big windfall until they sell their business and often by the time they are making the sale they will be using the money for retirement. Although it is also true that the only way to become really, really wealthy, besides inheritance and lotto, is by starting your own business.
The reality is that only a small percentage of businesses make their owner really wealthy, the rest stumble along earning an average wage. Of course many of those business owners earning an average wage love their lifestyle and only work as hard as they want to. Running your own business has the greatest potential to make you rich and may never make you rich, but here is the important part, your own business is very likely to make you a happier person if you keep your goals simple and aim for lifestyle over riches. Anyone can get rich but the contented people are rich without material wealth.
4. There is no superannuation, paid leave or sick leave.
You may not think about superannuation very much but it’s nice to know that when you have a job your employer is planning for your future by contributing to your superannuation. As a business owner your employer is you and besides looking after your employee superannuation you are also in charge of your own retirement. This is an added worry that you don’t have when you are working for another business.
Having time off is a concept not familiar to many business owners. Being paid when you have time off is like a dream for a business owner. There are some common myths about business owners working 7 days a week even when sick. If you do things right your business should still function without you when you need time off because of illness or even if you dare to take a holiday. However that being said most business owners find themselves as the most critical wheel in the business system and if you remove that wheel things fall apart. The important skill to learn is that the business owner should work on the business, not in it, but that’s easier said than done and especially early on when funds are tight it’s very like you will be working in the business. Don’t expect a paid holiday.
5. Workmates
There are no work mates for the solopreneur. You can hire employees that may hopefully become friends but the dynamic is always you the boss and them the employees. If you have been used to working in a busy, lively, talkative office full of peers that share the same perspective as you, with Friday afternoon drinks, group functions and shared time complaining about the boss — you can kiss all this goodbye.
Okay, that’s not entirely true.
Things are definitely different from working in someone else’s business but I’ve seen many small businesses that have great working environments. The difference is as the boss you have to create your own socialisation. You can do this by creating an amazing business culture where all employees are mates and the office is like a party that happens to get work done too. Of if you do not require employees then it’s your job to make sure you don’t turn into a lonely home based business bum. This means flexing your socialising muscles and organising events with other business people (if that’s whom you like to associate with), making sure you stay actively involved in groups and clubs and that you leave the home office now and then to interact with real live people. Much like everything else with running your own business, you are in charge of your social life too.
A day in the life of an Internet Business Entrepreneur.
Now you are familiar with what you lose when starting your own business you can continue to read my next article about a typical day in my life as an Internet business entrepreneur.Here you can read about what sort of lifestyle you can attain if you choose to start your own business. I’m not saying mine is an ideal lifestyle and there are things I’m working to change, but my example does provide you with a working model of the home based business owner.
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Great article once again Yaro, I too run an online b usiness (providing web services) as well as working full time for an IT consulting company. I get the perks of both worlds
I’ll be looking forward to tomorrow’s article!
Another fab article - your dedication to writing (I think) every day is a pleasure to witness. I remember hearing a statistic that only 3 in 5 businesses (all types) succeed i.e. 40% won’t work! Pretty damn scary, but I know that I’d love to have my own web business when I’m older. Some great advice in that article too - it’s wise to plan for a social life, time-off etc. too, so it was good to include that info. Heck, you should start your own magazine! Ben.
I am really looking forward to tomorrow’s article! I love to here your insides!
Ahh Ben, you are like my biggest fan man - thanks for the props. Are you still in school and why aren’t you starting a business already?
Well, I’ve just finished school, and am awaiting my GCSE results - 25th Aug BIG DAY! Then I’ll be going into the sixth form (English name for a college). The thing is, I’ve never done Business Studies, and I won’t be doing it for further studies at college! I would love to have a business; esp. an addicting games website. I’m hoping that ICT classes will fill me with the knowledge to create online games, but I’m not so sure - I think I’ll have to do yet further study. But hey, where there’s a will there’s a way! Ben
Another great article Yaro! I wish I could find the time to write consistantly at my blog, on a day to day basis, like you do. Nicely done! I look forward to your additional article.
[…] The purpose of this article is to give you a window into the lifestyle of an Internet business owner and in particular a home based business entrepreneur. The example below is a typical day in my life. If you are presently considering quitting your day job/after finishing school and starting your own Internet business I suggest you read - Do You Want to Run Your Own Business? Read this First! […]
[…] For most of us the road to becoming a millionaire is not by working for someone else. You have to start a business if you want to earn big money. Owning your own business is an important component of becoming a millionaire. Howeve, owning your own business is not for everyone. It is hard work and long hours. It’s not what as glamorous as television and magazines may lead you to believe. Yaro over at Entrepreneur’s Journey list 5 important things you should know about starting and running a business. These are real and if you are not aware of them before you start you may be disappointed. Knowing them will ground you in reality and will make it easier for you to overcome them. […]
Everything you said is true, but there are many upsides. Like, you can’t be fired.
Yaro. Great article & site. Im very impressed by yr efforts so far. Im a techie whom had always been in interested in starting my own business. Do u know of forums/sites for fellow “would be” entrepreneurs to meet to complement each other? ie I know techie stuff but is a little lost w/ marketing, communications, online networking, writing content etc. Just a place to exchange biz ideas perhaps?
Cheers — vbz
vbs - click my resources tab and then go to the forums section and you will find links to some of my favourite forums.
I’ll also have the Entrepreneur’s Journey forum back-up here again shortly too.
Wow
I had never considered a lot of these. I realized a lot of work would clearly be involved, but that wasn’t much of a problem for me on vacation. Reading this has sensitized me as to what it might mean for me to start my own business.
Thanks
lecentre
This is true online and offline, just “keep the eye on the prize” and “cut all corners” and you’ll be fine ^_^
Yaro,
Great article! I think you are spot on when you say its a lifestyle choice. Having worked as an IT Manager, and now running my own business part time and working as a solicitor, I totally empathise with the ‘living your work’. However, its worth it.
I feel its much easier to spend significant amounts of time doing tasks for your own business because you are building value in something that is yours. The drawback of working long hours for a law firm or any other commercial venture is that you are adding to the value of the owners business and not your own!
When you put the hard yards in to your own business, you are benefitting yourself in the long run.
Love the Blog, keep up the articles.
cheers mate,
Daniel
Hi Daniel - I’m glad you liked the article. It’s a while ago since I wrote it but it’s definitely one of the more important articles. All the points you make are spot on too - it’s so much easier mentally to work for yourself, at least it is for me.
Some valid points Yaro. Many traditional owners rely on the capital appreciation in their business for that big payout at the end rather than focussing on increasing that tangible cashflow.
Regards
Black
LeverageYourEffort.com
#2 is so true. I have a very good friend who is an amazing chef. He opened up his own restaraunt which has become more successful than he or his wife had ever dreamed. The problem is that he is a micro-manager and he can’t let go of being a chef instead of just running the business. Therefore, he works 6.5 days a week, minimum of 10 hours a day. And they are opening a new store! The money might be great, but if you don’t have time to enjoy it then I wonder what the point is. You’ve basically traded one job for another.
Very well written, Yaro. Esp point #2 and #4. I’ve been at it for almost 5 years now, and am still planning that long overdue vacation! I think one of the key things is that you absolutely got to love what you do. So it really isn’t work - or at least most of the time it isn’t!
I’m glad you liked it K. I think a lot of entrepreneurs will agree with the points I made, however they aren’t always as obvious to those who haven’t started working for themselves yet.
[…]   Today I stumbled across an interesting article on a blog that I wanted to share with all of you that are either considering or are in the process of starting an Internet Marketing business. We’ve all heard those stories about people who go from broke to millionaire in 1-2 years so we know it CAN be done. The blog (http://www.entrepreneurs-journey.com/192/small-business-realities/) starts out by discussing the things you will lose when you start an internet business from home: 1) predictable income, 2) predictable hours (your business is your life), 3) depending on the size, you may never make real money until you sell your business, 4) no paid sick leave, 5) no work mates. The article proceeds into the lifestyle of an Internet Entrepreneur (I love this phrase, it sounds sexier than Internet Marketer) where you make all the choices (income potential, hours, growth of the business, and social life) depending on what your individual needs are. I worked the traditional job for over 25 years and I now work from home creating profitable web sites so I can relate quite well to both situations. It all started with my stumbling across a course, Perpetual Profits (http://www.bestonlinesuccess.com/capture.html ) on the internet that promised to teach me everything I needed to know about internet marketing and web design. Then there was a forum (http://www.internetprofitmentor.com) where I could ask questions about things I did not understand. With the number of people in the forum, I was always getting constant input. They would even look at my web site and give suggestions. You’re probably wondering how much I paid for all this. Nothing. Zilch. FREE. And it is still free — for the time being. Within the next few months lots of things are planned and they will not be able to offer all this at no cost. If this sounds like something that you want to look into someday, make that day today! It could be what you’re looking for. It was for me! Here’s to your future success, Karen Kelley http://www.bestonlinesuccess.com/affiliates “Always bear in mind, that your own resolution to succeed is more important than any other thing.” Abraham Lincoln  […]
Great article. I think the sick pay thing is so important, and self employed people should definitely take out some type of insurance.
Another thing that many new entrepreneurs seem to struggle with are accounting and taxes. I’ve met a few newly self employed people who don’t think about putting cash aside to pay their tax, and then they get into real trouble.
Wow - great points. I hate working in a cube farm, but you raise some great points. Thanks,
Roy
Yaro,
I’ve been reading your articles and blog for some time. I’m not sure how I missed this one. Not like you need my endorsement for you points, but you are spot on. Deciding to be an entreprenuer can be a wonderful thing in one’s life. The key is to know what you’re getting into before hand.
For those looking to start their own web based business, my website is dedicated to helping. I’ve recently released a free guide covering affiliate marketing, content driven ad websites, and your own product promotion websites. Great resource for getting you started. Its My Journey
I think that there are many businesses that require much more work than others. So all businesses are not created equal. If you can work a business that you already love to do then you are 1000% ahead of the game. But choose wisely in what you do and things should work out.
hey nice article! I was thinking of launching myself in a course of business management and e-commerce. got to think twice now!
I think this is an excellent pro/con list for people considering trying to start a business. Is this article available for reprint?
Hi Anne - thanks! and sure, feel free to reprint it if you include my name as author and a link back to my blog.
Yaro
Yaro, I am very interested in your posts. I have recently opened my own online business on eBay and I spend countless hours each day trying to increase sales and publicize my store. Reading your post made me laugh because I share some of the same exact feelings about owning my own business. I thought it would be a piece of cake, but it actually requires a lot more time than any other form of work I have ever had. It is much more rewarding, though. I am able to see results directly from my own efforts. It’s nice seeing my own hard work pay off. I am able to focus on what I feel is important to my business. I love the independence. Thanks for the inspiration! Please check out my blog, Southpaw’s Storefront if you are interested.
Sincerely,
southpawsix
Hey,
Great article here :), I’m studying commerce as my major in university. And this article truly pins down some good points
Great Article Yaro.
I wish your article is accessible to people who get lured by ebooks promising easy money online.
Your article confirms my experience. It’s hard work ,Killing hard work. Making money online is easy if you want to be a spammer.But if your conscience wants to make a clean living online : Get ready to break your back!
Great Insights Yaro. I really loved what you said in # 3 “likely to make you a happier person if you keep your goals simple and aim for lifestyle over riches.”
As humans we have to make a choice what we really want to do .And stand by it.
Thank you for taking your time out and writing this wonderful article.
Cheers!
Hey there, great article. I just started my first business and it has been pretty simple so far. I opened cafepress shops online. It is easy to get started. Visit Cafepress Links to learn all about starting your own shop. No startup capital or internet experience required!
If you ask me running a small buisness either off line or online dosent make much difference to the ammount of work involved. I actualy do both.
Its a lot of work either way. Its like that advert (perhaps someone could remind me which one it was) were 2 buisness men visit a buisness and ask to see the receptionist. the receptionist comes and they ask to see the advertising cosultant he comes and they ask to see someone else and so on. But each person they see is the same person. I think that summs it up for small buisnesses, if you can understand what I mean LOL.
If any buisness is to be sucsessfull be it online or off theres no easy ride.
My Site
Hi Yaro,
Very well written article.
As a rule i have always failed at all endeavors in my life in spite of putting in loads of effort. What i realized was that though i was working i was not producing results. From my mistakes i would advice people that if they want to have their own business then the most important trait that needs to be developed is responsibility. You will be responsible solely for your success or failure. You can never put the blame on circumstances or resources.
Wishing everyone a happy and prosperous 2007 !
Yaro,
I like the reality check you have created. It is wonderful to dream big but without a reality check, we stumble over the details. Celebrating my tenth year full time on the Internet, I can appreciate what you are writing about.
http://www.mypersonalfinance.com/blog/
Great post!
A lot of people these days are trying to look for that “easy” income online, but it’s not as easy as it looks. You need to offer something unique, and always assist your visitors.
These tips should helpful to many.
Yaro, you bring a refreshing truth to entrepreneurship, I commend you for your authenticity. In my research of the researchers i have found 2 human factors for successful entrepreneurs:
1) they have strong private networks and even stronger extended networks
2) they all have at least one supportive mentor. what i mean by that is not just someone give advice, but someone who is opening their netowrk to you. and many of them have multiple mentors, and they are found everywhere.
thanks Yaro.
By the way, on IE 7.0, I’m getting a whole string of ‘Do You Wish To Debug?’ errors. Lines 380, 395, 425, 440, 485….
[…] a really big fan of Yaro Starak. His ideas, experiences, and his ability to always think like an entrepreneur allow him to write good quality content. The most important concept to understand, as I’ve […]
So far i’m mostly at home and it’s starting to grind. I find that contracting for agencies helps as they often like to have you working on site.
And I always, always arrange meetings away from the office. There are plent of pubs with WIFI and I am making sure I become a regular in a few, where i’ll soon be striking a deal for plugging my laptop into their mains.
hello yaro,
i owned my own business for 23+ years. it was a successful business. my friends would always tell me how they wished they had their own busines. i always advised them to do their homework and make sure they know what they were getting in to. if you know the day to issues you will be prepared. then you will be able to focus on running and prospering your business instead of putting out fires.
This is all so true. I miss the reliable income, the benefits, and especially the workmates.
What I don’t miss is the loudmouth idiot manager, the strict schedules, the 3am calls when there were server problems, the constant probing questions by the idiot manager trying to find fault with me…
Overall, I think I’m ahead.
Fantastic article and all true. The big question now is to go for it or to wait (may be forever).
I am an IT manager in small company and I would love to run my own business. Unfortunately, I still can’t judge whether I shall switch to my own business or shall keep working for my boss. I am afraid, I am getting lazy already. Do you think that there is a “best age” for starting your own business?
I don’t think there is a best age and if it’s only fear stopping you then I definitely would say go for it.
Fear is an illusion and should never hold you back. However if you have some concrete realities that you need to face first, like lack of cashflow or reso