Editor’s note: This article was first published in June 2014. Its figures and timeline come from a 2013 Inc. article: Rescue One Financial billing more than 32 million dollars “last year” after growing more than 1,400%, Smith’s near-ruin “only 5 years ago”, and Jody Sherman’s death in January 2013. This article discusses suicide among founders. If you are struggling or having thoughts of suicide, please contact your local emergency number or a crisis helpline in your country.
Everyone knows that getting your own company off the ground is far from easy, but many successful entrepreneurs are now starting to be honest about how incredibly brutal starting your own business can be, and about the price many business owners pay in silence. I imagine many of you have read the line “if you want freedom and financial independence, start your own business”.
The truth is that freedom and financial independence are exactly what you will lose for a long time until the company gets afloat, bearing in mind that there is a good chance it never will. That is the reality, and it is reflected in an article that won a Deadline Club award in the United States. It even explains how many entrepreneurs knew it would be hard but did not know it would be that hard, to the point that some took their own lives.
The article told the story of Bradley Smith, considered one of the most respected entrepreneurs today and an authority in the field of personal finance. His company, Rescue One Financial, a financial services firm that helps people get out of debt and plan their personal finances, billed more than 32 million dollars last year after growing more than 1,400%, according to Inc.com.
Smith had a secret his clients could never have imagined: only 5 years earlier, while he was advising clients on how to get out of debt, he himself was on the brink of financial ruin, sinking deeper and deeper into his own debts. And, of course, on the verge of depression at being unable to control his situation.
Smith had already sold the Rolex he bought with his first Wall Street paycheck, he had maxed out all his credit, and he had even had to humble himself in front of his father. His father was apparently a very serious man who had told his children since they were small that money does not grow on trees and that you should never do business with family or borrow money from them. Faced with his son’s desperation, the father lent him 10,000 dollars, but at 5% interest.
(Read: 4 things I learned from being broke)
And all this was happening while Smith met clients every day to advise them on their finances. If his clients had known about his financial situation, the sad truth is that they probably would not have listened to his advice.
Smith’s finances were in chaos, and just when it seemed things could not get any worse, Murphy’s laws made their appearance.
He recalls that one night, while having dinner with his wife and talking about the difficult situation they were going through, she told him she was pregnant. Smith was expecting his first child, and far from rejoicing at the great news, he only felt the pressure grow.
After 8 months of sheer anxiety, Smith’s company started to make some money, and from then on it became a profitable, steadily growing business.
What they don’t tell you when you start a business
In our culture we idolise great entrepreneurs, and we only see their success. We do not see, do not know and are not told about the secret struggles with anxiety and stress that not everyone is able to master.
It is like a man riding a hungry lion. Everyone who sees him thinks, “What a brave guy, he’s not afraid of the lion,” while the man on the lion is thinking, “What the hell was I thinking when I climbed onto this lion? Now how do I get off without being eaten?”
Until now, entrepreneurs were advised not to admit to such feelings, because that was a way of showing weakness. And an entrepreneur must be strong. In other words, the belief in “fake it till you make it”. This is where you find some people who start an affiliate business and, 15 days later, are already proclaiming that it changed their lives, when in reality they have not yet earned a single euro.
In January, Jody Sherman, 47, the founder of an e-commerce site, took his own life, unable to cope with all the problems of his company’s start-up phase and its difficulties. After his death, many other entrepreneurs acknowledged that their mental health was suffering under the stress and difficulty, and the constant inner struggles they face. Many entrepreneurs began to admit that they had had suicidal thoughts when difficulties arose in their companies.
That is why the problem started to be taken seriously and the business community began to change its message: “If you are having problems, don’t keep them to yourself, ask for help, because you are human too.” In fact, some helplines have been set up for American entrepreneurs in trouble, as part of suicide prevention efforts.
The article stated that very successful people, whose names we would never guess, have gone through these kinds of problems in silence and found they needed to ask for help. It is not only the financial problems and the struggle to get the company going, but also the time they cannot spend with their families, the loneliness of entrepreneurship and the number of hours a business owner has to put in at the beginning, because being an entrepreneur is usually a 24/7 job (24 hours a day, 7 days a week) before you can balance your professional and family life.
But an entrepreneur cannot talk about it and carries all his problems in silence, since showing that you are going through a bad patch would be seen as a sign of weakness, and for a financial adviser, revealing that he has more debt than his own clients would mean a loss of credibility.
If you run a business, all of this probably sounds familiar. I always insist that anyone can start a business, but not all of us are prepared to face the pressure of being a business owner, mainly because people are rarely told honestly what they are really up against.
That is why, when it comes to setting up our own business, we have to look beyond the financial motive, because a lack of money is probably what you will have for some time, to extremes you cannot even imagine right now.
If you are thinking of starting a business, take the gloomiest scenario your mind can picture right now and multiply it by 2. If, once you start, it turns out to be easier than you expected, congratulations; but if things go wrong in the business, it is a situation you should already have counted on.
You will have to swim in a sea where some of the obstacles will be: the initial paperwork and endless bureaucracy (multiply by 5 in Spain), the first customers taking their time to arrive, lost customers, disputes with partners, suppliers and customers, tough competition, personal problems, difficulty paying salaries and bills, and difficulty paying the household loans. There will be moments when you finally manage to lift your head off the ground just in time to be hit by another stone. Lack of sleep, stress and exhaustion. And always knowing that 80% of new businesses are failing.
(Read: 10 reasons small businesses fail early on)
This is the entrepreneur’s path, and that is why business is not for everyone.
Some advice for getting started as an entrepreneur
You should set out on this path knowing in advance that failure is a possibility, and so is financial loss. If you have accepted this, at least you will not lose your head if that moment comes, because it could.
Instead of telling yourself you are a failure and a loser because your business did not work, take that experience and always start from the premise that “nothing ventured, nothing gained”. The only people exempt from failure are those who have never risked anything. Look at it from that angle and do not make a drama out of a failure.
Always have someone you trust with whom you can be open about your feelings and emotions. Remember that if nobody knows what problem you have, you may be missing out on good advice, since that person might have been through something similar. But be careful not to cry on everyone’s shoulder. That is not the point.
Beyond that, starting your own business can bring you great rewards, but it will be very hard work. Never forget that.
Further reading
- Why an entrepreneur must be as prepared as a Marine sniper
- If you are going to fail in business, this is the way to do it
Featured image: Gibson & Co., publisher, Public domain, via Wikimedia Commons.
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