Starting a Business is Scary!

I’ve recently decided to invest in a new online venture with a friend. We’re building a site with a new service that isn’t out there yet and we think the business model is sustainable. It’s going to be a lot of fun once it’s built and there’s a very high ceiling, who knows where this will take us. We’re not ready to release our idea yet, but stay tuned because it’s a good one!

That being said, there are a LOT of scary things when starting a business, no matter how great of an idea it is. Whenever you are putting money in without knowing the outcome, it makes me nervous! It’s not gambling because I have control over it and it’s not an all-or-nothing type of deal, but I still risk losing everything I put in!

Building a website is the least of our worries. In all, we are spending $640 just to have the site built. This isn’t a blog and since there are features that I haven’t seen elsewhere on the Internet, we are having a site built specifically for us and our new service.

Once the site is built, we will have to drive traffic to the site. While there’s a slight chance this turns into a viral campaign, but since 99.9% of sites aren’t like that, we will have to build from the ground up. We’ll start with friends and family, Facebook, Twitter, etc. But there are only so many free options out there, so we will likely have to pay for traffic at the beginning until word spreads or someone notices us.

Next we have expenses for running our service, which likely have to be paid before we see even a penny. These costs aren’t small and will be coming out of our pockets.

Finally, we will be looking for sponsors for our hip new company. We don’t anticipate it being easy to get people to sign up for an unknown service, we are counting on win-win situations for everyone and possibly to get some of our costs covered at the beginning until we are fully up and running.

In all, we are probably looking at $4,000 – $6,000 in an initial investment. That’s not something I’m entirely comfortable with, and with most of my investments, they are either very small or have little risk of losing it all.

I’m scared as heck to do this, but the pull of starting something original and having a working business is too good of an opportunity to pass up. The upside is high, so while there are some major risks we are taking.

I can’t wait to share the new service with you guys, I think you’ll love it when it comes out!

Readers, do starting businesses scare you? Are the risks too high to justify the investment of time and money?

If you would like to learn more, check out some degrees in organizational leadership.

14 Responses to Starting a Business is Scary!

  1. One of the things that you have to watch out for in your situation (where you’re doing a partnership) is to make sure that this doesn’t adversely affect your friendship or relationship. Many times things like this can go sour if one person isn’t pulling their own weight, or decides down the line that they want to get out or focus their attention elsewhere. I worked for a company where my boss (the owner) merged with another company that was owned by a long time friend of his. In theory it should have been a great move, as the services offered by each would compliment the other. It turned out awfully, simply because they had completely different management styles which clashed, and led to them breaking up the companies and their friendship.

    So, make sure that the business venture AND the relationship get proper attention as you move forward.

    That being said, GOOD LUCK!

    • Daniel says:

      @Money Beagle, Thanks!

      We have the same vision and if it doesn’t work out, so be it. We seem to get along well and don’t have overpowering personalities. When we want different things, we either compromise or I’ll make one decision and he’ll make the next. I think you get into trouble when people have type A personalities and can’t seem to coexist.

  2. Eric J. Nisall says:

    I was more excited than nervous when I started working on my business. I guess having the background helps, as does staying within your educational and prior experience field. there are a LOT of things you need to cover including the legal and accounting which should be the first things in place. Also having real business and marketing plans are essential to gaining investor funds. I’ve written a few articles about starting out, marketing and the like if you want to swing by and check out the business section for a few ideas.

  3. I’ve never started a business myself, but all your concerns make perfect sense. It is a huge investment! Even starting a simple blog can be scary, and that’s hardly a risk at all. If you’re confident in your idea, you’re making the best decisions you can (as you somewhat blindly navigate the start-up world), and you’re creating something completely original that consumers haven’t seen before, I say take the risk. Can’t wait to hear what the idea is, you’ve got my support :)

  4. Good luck! Did you try getting a long from prosper or loan.com? I’m very curious to see what the business is.

  5. Evan says:

    I am very conservative by nature I like businesses that take very little capital to start!

  6. Don says:

    Yes, I would be nervous, but mostly because I like to keep a firm grip around my finances with complete control over every penny. With such a big unknown variable, I would be intimidated.

    But you are young, and this is the perfect time to pursue such endeavors! I wish I had taken more risk when I was younger, versus now that I have two kids, with one on the verge of being a teenager…

    So with that, I wish you good luck and hope you kick some butt with it! Either success or a flop, you still win in that you are doing it!

  7. Darwin's Money says:

    I recently started up a CAD outsourcing biz with a friend by merging my blogging/SEO experience with his civil engineering experience. It’s going quite well but we’ve had some hiccups along the way. Feel free to reach out any time, but some key items to consider are:
    – set up an LLC AND an operating agreement governing investment, capital interest, decision rights, what happens upon death/sale, etc.
    – think long and hard about how you want to spend your money publicizing. there are SO many outlets, each with very different models and ROIs
    – move relatively quickly; it’s amazing how long things take and if you’re not working on it pretty much daily in some way, it’s going to crawl – or someone else may step in and fill that void.

    good luck! would love to hear more about it!

    • Daniel says:

      @Darwin’s Money, We have a LOT to do, even as the site is built for us. We are gathering lists of contacts, carefully estimating and overestimating costs, and producing everything we can before our launch.

      We do need to take care of the LLC stuff before we get knee deep. Thanks for the suggestions and encouragement!

  8. Geoff says:

    Hey Daniel, that’s super exciting, I can’t wait to hear what your idea is! Compared to traditional brick and mortar businesses 4-6 grand is really just a drop in the bucket and a very small investment to get going. So don’t let the risk scare you, in the big scheme of things it doesn’t matter much at all.

  9. Yes, that would scare me! But, if I had a big enough cash flow surplus, I would start looking for other ways to invest and start taking some bigger risks. I can’t wait to hear the news!

  10. Wow, that does seem scary. I was toying with the idea for over a year about starting a major online business, but I gave it up. I had good ideas, but I just can’t seem to figure out why they don’t work.

  11. Oh I’m excited for you. Looking forward to hearing about it. Your investment has a limited downside in that you can’t lose more than you put in right, but the upside is unlimited. And really, in the grand scheme of things $6,000 isn’t a huge amount of money. Even if you do lose it all you will recover and move on. You have to take some risks if you want to get somewhere in this life. Congrats!

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