Starting a business takes careful consideration and planning. It takes emotional and financial preparation and a commitment to invest the time required to see your endeavor succeed. The stakes are also high: only half of all new businesses survive five years or more, and about one-third survive 10 years or more, according to the U.S. Small Business Administration. But despite the many challenges of starting a business, the business owners say the rewards are plenty.
In the second quarter 2014 Wells Fargo/Gallup Small Business Index, we surveyed small business owners across the U.S. and asked them to look back to when they began their businesses. Here are the areas they said aspiring entrepreneurs should consider before starting and owning a business:
One of the first considerations of becoming a business owner is to make sure you have a solid business plan. That includes doing research to learn about your customers, your competitors and your industry and meeting with a financial advisor to review projected cash flow. In our survey, when business owners were asked to identify the most important challenge they faced at the time they opened their business, the number one challenge was securing accounts and customers (23 percent), followed by cash flow (15 percent) and credit financing/availability of funds (10 percent). Although starting a business often requires a great investment of time and dedication, interestingly, only two percent of small business owners reported the personal sacrifice and long hours was their biggest challenge—an indicator of the great personal satisfaction derived from business ownership.