5 Tough Decisions Every Entrepreneur Must Face
One of the most appealing benefits of becoming an entrepreneur is gaining control over your professional life. As an entrepreneur, you are singularly responsible for making all decisions about the business, and while others might be able to give you advice and point you in a certain direction, ultimately you have the final say.
Unfortunately, there’s a major downside to this benefit. Being responsible for so many decisions is stressful, especially when those decisions can determine the eventual success or failure of your business. Some decisions will come to you naturally, but there are five incredibly hard decisions you’ll inevitably have to face as an entrepreneur:
1. Starting Your Business. Deciding to start your business is always the first major decision you’ll make as an entrepreneur. It starts with an idea, and then typically evolves into a business plan — or at least an outline that fleshes out your original inspiration. From there, you’ll have to carefully consider the feasibility of your business as well as what sacrifices you’ll have to make when you pull the trigger. You may have to quit your job. You may have to cash in your nest egg. You may have to start calling on friends and family members to pitch in and help you start up.
Whatever the case, deciding to move forward with your business is a courageous and tough moment. If you’re on the verge of starting a business, be sure to evaluate your situation critically and objectively. And if you’ve already started a business, then congratulations, the first hard decision is over with.
2. How to Fund Your Business. Once you’ve decided to move forward with your business, you’ll need some money to get things going. There are tons of ways to fund your business, but all of them have advantages and drawbacks you’ll need to consider. Choosing which way to go is tough, and can dictate your potential success.
For example, funding your business yourself can give you complete autonomy, but can also put you in severe personal financial stress. Seeking a venture capitalist or angel investor can ease that stress but could also force you to relinquish some degree of control over your company. Crowdfunding is another option, but it can be unpredictable and difficult to manage.
3. When and Who to Hire. As the entrepreneur of your business, you’re going to be the decision maker, the visionary, and the figurehead, but it’s the team you hire who will ultimately execute your directives and carry your business to success. Choosing the right people for your team is an excruciatingly hard series of decisions, and you’ll need to be prepared for that difficulty.
Among other factors, you’ll have to carefully evaluate each candidate in terms of talent, experience, cost, and perhaps most importantly, culture fit. Without a strong company culture tying your workers together, you might as well give up any notion of teamwork. You’ll also have to be prepared for the tough decision of firing an employee in the event that the relationship doesn’t pan out as you intended.
4. When and How to Expand. Expansion, for any company, is an exciting notion, but it can also make your business extremely vulnerable. Expanding too quickly or too soon can put so much strain on your resources that the company can no longer stand. Slow or postponed expansion can prevent your company from scaling, and limit the amount of revenue you achieve. Finding the perfect balance between the two is your job as an entrepreneur, and you’ll have to babysit your company’s growth over time if you want any chance of expanding successfully.
5. When and How to Exit. Everything that has a beginning has an end, and eventually, you’ll need to find an exit strategy for your business. For some entrepreneurs, that will mean selling the business. For others, it will mean handing it off to a family member. For some unfortunate business owners, it will mean filing bankruptcy or closing down, and for others it will mean retiring with millions of dollars.
Determining the right time and right way to exit your company is the last business decision you’ll make, and it might have the greatest lasting impact on your future.
Making these decisions won’t be easy, but once you’ve settled on a choice, try not to look back. Your goal should be to make the most educated, confident decision you can, with the understanding that some of those decisions won’t work out the way you thought they would. As long as you’ve done your research and spent ample time weighing your options, there’s no reason to regret any decision you make throughout your course as an entrepreneur. Enjoy your successes when they come, and take your failures as a learning experience.
For more content like this, be sure to check out my podcast, The Entrepreneur Cast!