I owned the majority shares in a software development company back in the 1990s that I founded. I was the CEO and we built the company to about $3M a year in sales before we sold it. We had a blast building it and running it. It was an enormous about of work.
I sacrificed family time, recreation time, vacation time and personal time for almost four years to do it. You basically work ALL the time. If you just want a job replacement business I suppose it is much less stressful, but if you want to grow something to IPO or sell to a bigger firm then it is a whole different story. You will deal with VCs or other investors, difficult employees, potential employee misconduct, lawsuits, dishonest customers, aging receivables and collections, as well as lots of other challenges. Everyday brings new challenges, new thrills and new disappointments. It is not for the faint of heart.
Entrepreneurship and running your own company is some of the most fun you can have, but it is not for everyone. There are a gazillion regulations you need to familiarize yourself with if you start one. The HRISA regs alone are a nightmare. Not to mention the IRS, the Small Business Administration, if you use them and a host of other regulators that think you need to abide by their rules. You should familiarize yourself with all of these if you are going to start your own firm.
My best advice for running your own company:
- Hire a great accountant and a great lawyer from the beginning.
- Get everything in writing especially with your customers
- And most importantly DON’T RUN OUT OF CASH!
I’ve started or been a part of five startups so far. Each was centered around software development. One of them was very successful, another one of them made some money, one barely broke even and the other two went bust. If your company survives more than three years you will be one of the fortunate few. The one I describe above was four years old when I sold it. It was also the one that was the most successful.