I have a great Idea. Should I consider Starting a Business?
5 Steps to help you Decide, if the Entrepreneur’s life is for you.
Good & Bad Reasons, Primary Skills needed, the right Mindset, Lean before Green, Personal Support, Resources.
Have you ever wondered “Should I consider Starting a Business?” In today’s article we start our series on how to start a business with the 5 steps you need to take in order to find out, complete with a checklist you can use as you go through the article.
Step 1: Should I start my own Business? [Be Honest with Yourself about why you want to consider Starting a Business] In order to know if you should start your own business, you first need to make sure that you are starting a business for the right reasons.
Bad Reasons for starting a Business:
- You hate your boss.
- You think your salary is too low.
- You lack passion for your job
- You want to work less hours.
Good Reasons to start a Business:
- You have developed enough experience in an industry that you think you can go out on you own and your clients will come with you.
- You have identified a problem that your potential customers have and think they will pay you for solving it.
- You have leadership experience and want to be in charge
- You want the challenge of Starting a Business
Step 2: Do I have the Skills for Starting a Business?
A mistake that many entrepreneurs make, is confusing their desire to do a particular type of work, with a desire to have their own business. If you are not able or do not want to spend time marketing your business, managing your staff, and dealing with the finances of the business, then it doesn’t matter how good your business idea is.
Primary Skills that you will need (or your Partners has):
- The ability to market & sell to customers, job candidates, mentors
- The ability to deliver a high quality product or service to your client
- The ability to handle the finances of the business
- The ability to manage yourself and others on your team
Step 3: Do I have the right Mindset for Starting a Business?
A. to Z. Do Anything & Everything. If you are not willing to get involved in everything initially, then you are unlikely to be successful at starting a business. This is especially true, because new entrepreneurs often hold all roles from Janitor to CEO. This is still true when starting out with a significant amount of capital – that you can use to pay others to do the dirty work for you. In the beginning, if you are unwilling to participate at every level of the company, then you will not understand what makes the company tick, and are likely to fail as a result.
B. come a Work-a-holic. Lastly, you have to be willing to put in the hours. While Tim Ferriss’ book “The 4 Hour Work Week” has sold a lot of copies, I don’t know anyone who has found success by working jus a few hours. The successful entrepreneurs that I know all work their buts off, especially in the beginning.
Step 4: Can you survive on Lean with your Means?
How much money do you need to invest, and how long it takes for a business to become profitable varies widely depending on the conditions of your business. There is one thing that does not vary however: It always costs more & always takes longer to reach profitability than the founder thinks in the beginning.
1. Initial Investment. A good rule of thumb is that you are going to need 2 to 3 times the amount of capital that you estimate in the beginning.
2. Survival. As far as earning a living from the business goes, a good rule of thumb for most types of businesses is that you will not be able to pay yourself a salary in the first year. In the second year you will be able to pay yourself a small salary, and the third year is when many businesses actually become successful enough to replace your former salary.
3. Part-Time? If you do not have the means to support yourself for at least that amount of time, then it may be wiser to either wait until you have more money saved, or start your new business on the side before quitting your day job.
Step 5: Do I have the Personal Support needed?
You are likely to have many ups & downs when starting a new business, so you need to make sure that the people you have around you, are supportive of the process. Does your significant other understand what starting your own business means for you, your family & friends? Here is a good list of things to make sure your personal support network understands
- There is a high failure rate among new businesses.
- The hours are long and work is very stressful
- There will be a lot of ups & downs which can affect your mood.
- How much spending will have to be curtailed in the initial years.
Resources for Starting a Business: [Web-Sites]
- SmallBizTrends: “Small Business Failure Rates” – Most new businesses fail. What will be the impact on your life if your new business is not successful?
- MarleeWard: “The Pro’s & Con’s of Self-Employment” – and a free Quiz to help you determine if self-employment is right for you.
- Wall St Journal: “How to Decide if Entrepreneurship is Right for You” – 5 Questions every aspiring entrepreneur should know the answer to, before taking the leap.
- About.com: “Starting a Business Quiz” – Questions which will help you determine whether starting a business is the right path for you.
- Forbes: “11 Myths of Owning a Small Business” – Why a lot of what you hear about starting a business is just plain wrong.
- Business Owners Toolkit: “Do You Have the Right Stuff to Run a Business” – An overview of the essential qualities for owners, how to compensate for weaknesses, & the impact of business on your personal life
Comments: Do you know any other Resources for determining – Should I be Starting a Business? Why did you decide to start your business?
from Fits a Small Business 13 July 13 enhanced by Peter/CXO Wiz4biz