So you’re thinking about starting a business, terrific. However, for those thinking about starting one, it’s often the mental hurdles that prevent you from forging ahead. Unanswered questions can get in the way of advancement. Am I ready to start a business? Do I have enough savings and time? Or, I have several business ideas which one should I pursue?
Starting a business is exciting, heady stuff, and it’s not for everyone. You need to be able to plan ahead, be brutally honest with yourself and embody grit. Here’s some resources and guidance to help you determine your entrepreneurial talents and whether you’re ready to join the ranks of small business owners.
Why Start a Business?
1. You’re the one in control: Yep, the be your own boss thing is pretty great. I should lie to you and tell you that means that no one tells you what to do, but people (customers, suppliers, government workers) will still tell you what to do all the time (and on bad days, might even tell you where to go, too). The good news is that when you own your own business, you don’t have to do what they tell you (most of the time). You have choices and you get to make the decisions.
2. You get to build something: From one kid who loved Lego to another, you know how satisfying that is. Want to become a multi-national exporter? Or create a program that increases numeracy among children? Or turn people’s yards into truly beautiful spaces? When you own your own business, you get to shape and flesh out your dreams.
3. You get to help people: Small businesses also help people by creating jobs in their communities.
4. You may have the option of a more flexible lifestyle: For women, especially, owning your own business can give the lifestyle flexibility necessary to raise a family and still have a successful career.
5. You might change the world: You certainly don’t have to think back very far historically to come up with the name of a business owner whose enterprise has changed the world. Mark Zuckerberg anyone? Bill Gates? And your business doesn’t have to become the next Facebook or Microsoft to be the agent of powerful change. Changing the world is a pretty ambitious target, but changing just a piece of it for the better is still a worthwhile effort that can be deeply satisfying.
6. You might make more money: Some businesses make truckloads full of money. Some don’t. Most successful small businesses provide their owners with a living, not a fortune. But the point is, owning your own business opens up the possibility of making more than you could possibly make as an employee.
Are You Ready?
While you may feel a sense of urgency to quit your job and get your business started, don’t quit just yet. How long will you be able to cover your regular expenses as you build your business? Do you have to keep your job as you work your business on the side? It’s time to access your life situation to help you figure out the best way forward. To assess your readiness, ask yourself if you have the financial and emotional support you need to take care of yourself (and possibly your family) as you build your new business. How much savings should you have before starting?
Some business owners have no savings when they start not ideal while some have enough to cover several years of expenses. The bottom line is to not be sacrificing paying your fixed expenses such as rent/mortgage to fund your new business. Or figuring out a way to decrease your fixed expenses, like moving in with your parents also not ideal, but perhaps a temporary money saver or getting a roommate, to funnel money toward realizing your new business.
Make your business run smoothly with these tips:
1. Pinpoint the right market: Ideally, you should introduce your products or services to a young and fast-growing market. In more mature sectors, you will need a competitive advantage in order to distinguish yourself, i.e. product or service innovation, great customer service, or the right price point. That means you should use a specialized research company to help you first gather as much information as you can to define your potential market, such as your competitors’ strengths and weaknesses and the development time required to get your product off the ground. Keep in mind that during this time, you will not be making any sales.
2. Put the right people on your side: People on your management team should have skills that complement one another. The best leaders ensure that they recruit the top experts for each area of operations. You should not be afraid to hire people who have, in their respective fields, more expertise than you do. You should also look at your outside resources as a part of your team. From a practical point of view, you will need technicians, sales people and managers, a lawyer, an accounting firm, as well as marketing or public relations help. If you don’t have the resources to set up a board of directors, you can also opt for a strategy committee and invite an expert to act as a sounding board for your business decisions. In advanced technology, there are more and more incubators that offer a wide range of assistance for increasing your chances of success. In the end, the true test is the market. To reach customers quickly and efficiently, you should think about hiring marketing specialists at the outset. Marketing, while often neglected, is critical to the success of any business.
3. Get your financing in shape: Start-ups are often financed by the savings of their founders (as well as the savings of families and friends). In many cases, it may be necessary to look for outside capital.
4. Deliver a plan that means business: Your plan must be concise, specific, and describe your business project accurately. Write it yourself, as it is your vision. And expect to do several rewrites before you achieve your final plan. Don’t be afraid to get assistance if you need it. Show it to experts, such as accountants and lawyers or to other experienced entrepreneurs. Keep in mind that a business plan is more than an accounting document; it must sell your idea to a potential financial institution.