Before I start writing about all the bad things involved with running a company, let us not forget all the good things that come from having your own business. Imagine, in a few years, you could be on a luxury yacht, drinking champagne. Ok so that is an extreme example- but why not? A business can be financially rewarding and offer you the lifestyle most people can only dream of. Company formations are mean't to enrich your life.
The biggest risk with running a company is financially. Significant debt can be accumulated through mis-management of your finances. Luckily, we can identify simple reasons for ending up in this situation. Firstly, overpaying your suppliers. You really need to keep a cap on your expenses as a company owner. Alternatively you can employ someone who is skilled at negotiating good rates. Again with employees, do try and make sure you don't overpay them, as nice as they might be! From experience, this is what I have found with all my UK company formations.
Some people have the natural ability to do very little and earn lots from that by getting other people to do the hard work. Not many people are able to do this though. The majority of business owners find it very hard to sit back and not be involved with every aspect of running the company. From personal experience, it is always worth setting up a business with the intention that the business works for you, not you working for the business. A business isn't worth running if it doesn't free up your time, and not the other way round.
Dealing with difficult customers is enough to put any sane person off. There's not much fun in being shouted at for something that isn't your fault. All the time, you have to smile and be polite. Either develop a very thick skin, fast, or employ someone else to handle customer service.
If you run a business, be prepared for plenty of red-tape and bureaucracy. You need to remember everything from putting up no smoking signs (even if neither you, or any of your employees smokes). A great many companies are hampered by rules and regulations.
Starting a business is a very draining experience. Firstly the stress of setting all your systems and ensuring they run perfectly. Secondly in financial terms. It depends what product or service you offer, but very often you'll need to personally invest, or borrow money from the bank. There is always the risk you could end up losing everything.
Never be put off by running a business though. Listing five pitfalls was hard work. Finding any more negative factors would be hard. You can use a business to do anything you want in life. If you do go ahead with company formations, I hope you are successful.
The biggest risk with running a company is financially. Significant debt can be accumulated through mis-management of your finances. Luckily, we can identify simple reasons for ending up in this situation. Firstly, overpaying your suppliers. You really need to keep a cap on your expenses as a company owner. Alternatively you can employ someone who is skilled at negotiating good rates. Again with employees, do try and make sure you don't overpay them, as nice as they might be! From experience, this is what I have found with all my UK company formations.
Some people have the natural ability to do very little and earn lots from that by getting other people to do the hard work. Not many people are able to do this though. The majority of business owners find it very hard to sit back and not be involved with every aspect of running the company. From personal experience, it is always worth setting up a business with the intention that the business works for you, not you working for the business. A business isn't worth running if it doesn't free up your time, and not the other way round.
Dealing with difficult customers is enough to put any sane person off. There's not much fun in being shouted at for something that isn't your fault. All the time, you have to smile and be polite. Either develop a very thick skin, fast, or employ someone else to handle customer service.
If you run a business, be prepared for plenty of red-tape and bureaucracy. You need to remember everything from putting up no smoking signs (even if neither you, or any of your employees smokes). A great many companies are hampered by rules and regulations.
Starting a business is a very draining experience. Firstly the stress of setting all your systems and ensuring they run perfectly. Secondly in financial terms. It depends what product or service you offer, but very often you'll need to personally invest, or borrow money from the bank. There is always the risk you could end up losing everything.
Never be put off by running a business though. Listing five pitfalls was hard work. Finding any more negative factors would be hard. You can use a business to do anything you want in life. If you do go ahead with company formations, I hope you are successful.
About the Author:
For assistance with company formations, visit Optimum Formations. Optimum Formations are specialists in UK company formations.
