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Comment by frahs | Hacker News Reader

The first few questions almost have me convinced I should open my own business. Surely there must be other difficult things?

I assume the main difficulty isn't that -- I assume it's the lack of comparative advantage, so competition eats into your margins until you're fighting a race to the bottom, not only making your customers happy, but doing it cheaper than someone else could, and I assume the stress from that makes it hard?

And also not being in control of your suppliers, so unpredictable events can affect your profit.

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The main difficulty is that most people do not like running a business, especially a small business. For most of these businesses, you are buying yourself a job. Let's say you take out $1.5MM loan to open a shop, and you net $70,000 per year on a good year after expenses and debt service. After a few years, you have $1MM left to pay and there's no way you could sell the business for that. You have a personal guarantee on the loan.

Your vendors are always coming up with new ways to tack on extra charges. You have to deal with training, HR, bookkeeping, payroll, handyman tasks, cleaning, working shifts when your employees flake out, annoying customers, dangerous people, destructive customers, employee drama, the list goes on. If that is not what you enjoy, you will have a lot of your life doing things you do not enjoy. Sipping tasty coffee and chatting with your happy customers is a small part of the whole.

I also daydream about opening a business, like in the opening paragraph of the post. But I also know that I never will; it's a daydream, not a retirement plan. I know I would hate 95% of the process, without even fully unpacking it. That's why it's a daydream, and that's why when I'm frustrated at work I say "I wish I could quit and become a woodworker" or "I want to walk out of this job and open a D&D cafe."

But to your point, yep. There's a coffee shop in town - one of the only ones! - that we go to because we like it. But two more just opened up, both in better locations for both foot & car traffic, which might genuinely kill the other place. And there's absolutely nothing they can do about it.

No, those aren’t the follow on questions.

The follow questions are to establish if you are crazy about this, not sane about this.

Anecdote - Incredible introversion, if not social anxiety - and at one point I just up and drove to meet strangers at a cyber cafe to play video games, because I was obsessive about video games at that point. Same for cooking, writing papers, reaching out to people, and so on.

You overcome yourself, when it’s something that resonates with you.

Going back to your question - the lack of advantage, or bad margins etc - this is the “problem” vs “Challenge” view point issue.

IF you are crazy about this, then you will figure out ways to overcome those challenges - pivot business, learn to be lean, or find sustainable ways to build runway etc.

There are different businesses to be in. Some businesses are like arbitrage chasing the smallest margin you can find on the biggest scales. Some businesses are like chasing excellence doing the best you can do. There are many types. You can't impose the kind of business you want to succeed in on the industry you want to be in, you have to find opportunities.

> Surely there must be other difficult things?

It's not that any of the things in that list are intrinsically difficult. But if you're a small business owner, imagine an endless series of those challenges and with each one, you've got only a few minutes to resolve it before the next one shows up.

I’ve now been self-employed for 25 years and have owned several businesses, one of which is a YC funded startup but most of which were very different.

None of them competed on price. Price competition is real I’m sure, but most businesses don’t succeed that way. Most of us have more in common with Apple than Wal-Mart (though of course several orders of magnitude smaller).

I’m not necessarily saying I wouldn’t ever consider such a business, but you better have some edge if you do. If you invented some way to manufacture a widget for 25% less than anyone else, sure, go eat that market. That’s not most of us though.

Coffee shops (his example and one really close to what I know) for instance don’t. You don’t win in that game by being cheaper than Starbucks and most don’t try.

What do you compete on, then?

Depends on the business! That’s kind of the magic.

Marketing, location, service, quality, ambiance. Lots of ways.

Quality, uniqueness, vibe, location, etc.

For an independent coffee shop specifically, the important question left out is "How are you going to create a welcoming environment that will attract customers without 1) aggressively kicking out the guy who bought one $5 espresso and then sat on his laptop occupying a 4-top table for 5 hours and 2) aggressively kicking out homeless people who try to use your establishment as a substitute for social services not provided by the local government?"

I think that the answer to #2 is you HAVE to aggressively kick out (aggressive) homeless people if you want a welcoming environment.

It's not that it's difficult, it's that most people don't realize what the day-to-day job is.

They assume they'll be hanging out in a coffee shop all day, chatting with regulars, but in fact the tasks and problems they'll have to solve is very different from what they imagine.

Yes, besides the mundane day to day details, which are actually up the alley of many people, the other thing that prevents people from being a small business owner is the amount of money they need to invest in it, and the fact that they are effectively assuming all of the risk; whether it be competition, changes to supply, changes to demand, etc. Insurance can blunt a few types of rare risk, but not the fundamental business risks.

So you have to be willing to take those risks, and want to be handling those mundane day to day details.

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