Guidant Financial Group Blog

If you didn’t know already, starting a business is hard. With many entrepreneurs making the transition from employee to business owner, the shift can be even more difficult. According to the Associated Press, many entrepreneurs are unprepared for the trials that they will face as a business owner (see Transition to Business Owner can be Hard).

First of all, many are unprepared for determining their own hours. Michigan resident Georg Stahl, who started a construction and contracting business after losing his job, told the AP, "A lot of people think that if you own your own business, you can set your own hours. I think that's the biggest falsehood you run into."

Additionally, the stress of waiting for the business to get off the ground can be more than some are able to handle. Furthermore, when the business does take off, if the success is unexpected and inadequately planned for, it can actually be a detriment.

The most common challenge, however, is cash flow. Waiting to get paid on jobs can be frustrating and, sometimes, damaging.

Fortunately, for those who use the 401(k) small business financing solution, cash flow may be less of a problem. Business owners may still have to wait to get paid for services rendered; however, by minimizing or eliminating business-purchasing debt, the time between payments may be less detrimental because there are little or no loan payments to be made.