Yesterday’s article highlighted the advantages of a start up business.  Here is a list of disadvantages

• high risk of failure in first two years of operation
• higher risk then buying a business which has been in operation for several years and has a history of cash flow and customers
• may require your own capital to operate the business
• since you are a new business, you may not get credit from the banks
• may need to borrow money from family, friends and credit cards
• may need capital injection from angel investors or venture capital firms
• credit difficult to obtain until companies is 2 years old
• may have cash flow problems, you may be required pay for services/products up front but not collection your receivables for a while.  There is a timing difference between cash out and cash in
• owner is responsible for all aspects of business and may not have expertise in all areas
• owner is responsible to find out about licencing, marketing, services and sourcing products
• no one to help you other than friends and family who may or may not have your vision or passion