Americans are professional consumers. We always want to know what things are going to cost. I am dating myself to say that I remember my parents combing through the Sunday paper to find the prices of just about everything, gather coupons and get ready for business. Today, online providers offer full price and feature comparison from multiple providers, instantaneously. Don’t forget to check the shipping costs! The price of anything is always delivered. I’ve been duped on that a few times, blinded by a good deal, or maybe just a little lazy at the finish line.
I often marvel at the price that Small Business owners pay to deliver the dream. I have seen my share of business plans and pro formas during my 35 years in banking. I’ve seen all the explicit costs of doing business documented in great detail – labor, materials, various forms of overhead — all well-researched and supported, occasional accounting errors but solid mathematics. And, of course, lots of profits. I had special respect for those who dared show early losses to their banker. A simple dash of realism.
Yet, I always had a sense that the numbers were the easy part, that the greatest costs were almost unquantifiable yet a multiple of what was in the business plan. Clearly, there was an opportunity cost to the venture, something they were doing before that they would no longer be doing, income streams and certain parts of a lifestyle that would be suspended or forgotten. The wise ones had pared back their lifestyle in advance, to give themselves the opportunity to pursue their dream. If pushed, I believe the opportunity costs could have been quantified too, but they were just not relevant to a credit underwriting analysis.
Maybe you can get the explicit costs and the opportunity costs figured out, but can anyone ever fully estimate the emotional costs of going into business? I find myself at that point right now.
It is daunting and overwhelming at times, just as big as I sensed for years as a spectator. I have deployed very little capital, but expended tremendous emotional energy in carving out a new pattern of living. New cadences of rising and resting, friends and co-workers from my former life suddenly awkwardly inaccessible, fiery energy tempered by self-doubt, skeptics intent on invalidating the dream, and things just never going quite the way I imagined.
I believe that is the way it is for everyone that undertakes a new venture. It is the true cost of delivering the dream: explicit costs, plus opportunity costs, plus emotional costs. Just another reason why I admire Small Business owners the way I do.