Determining Whether It’s Time to Start Your Own Business
If you’ve been thinking about starting a business, you’ve probably asked yourself this question a million times: is it the right moment? This is obviously an incredibly difficult question to answer.
First of all, what does it even mean? What conditions are necessary for starting a business? Do you have any small business ideas?
The answer is that you’ll probably never know for sure.
You might have heard a lot of people say that right now is a great time.
“In this economy, it’s the perfect time to strike out on your own.”
“The market right now is perfect for starting your own business.”
You’ve heard it all a million times. But when it comes to deciding whether or not it truly is the perfect time for starting a business, it’s more of a personal decision than anything else.
According to the U.S. Census and Bureau of Labor Statistics, only half of the small businesses make it through the first five years.
That’s why you need to spend less time evaluating outside factors and more time evaluating your own reasons for starting a business.
If the following reasons are your main motivators, then you need to think twice about whether you are the type of person who should be running a business of your own. In fact, it’s probably a terrible idea if these are your reasons.
- You don’t like your boss/job
This is perhaps a good reason for wanting to find a new job, but it’s a terrible reason for starting your own company.
- You don’t like what you’re doing
A lot of people don’t like their jobs, but that’s not a good enough reason to start your own business. Do you know what you would like to do? If not, deciding that you want to start your own business just because you don’t like working for other people is not recommended.
- You want to work less
This is probably the single greatest misconception that comes with starting a business. Not only are you not going to work less, but you are almost guaranteed to be working more than ever before.
A lot of people are under the impression that as the boss, they are going to be able to delegate all their responsibilities to others. That’s not at all true. Especially in the early stages of striking out on your own. If you are going to make your small business successful, you are going to have to dedicate more time and efforts to your job than ever.
If your reasons for starting a business are similar to the ones listed below, then you are on the right track and should start delving further into determining what it will take to get your idea off the ground.
- You feel ready to be in charge
If you think that you have gained enough corporate experience and are ready to take a leadership role, starting a business could be a good idea. It will satisfy your need to take a more proactive role in your career and start making important decisions.
- You have identified a problem you know how to solve
Do you feel as if you have stumbled on to your million dollar idea? Then it’s time to take the leap. You should have not only identified a common pain point but also have a fairly concrete idea of what you can do to help people overcome it.
- You are ready for a new challenge
A lot of people are stuck in a rut with their jobs, but not everyone feels the need to get unstuck. But if you feel that you have the energy, the skill, and the willpower to get out of that rut and take on a new challenge, then you are a prime candidate for starting to do your own thing.
If you feel that you have a lot more to offer and are ready to make sacrifices to exit the doldrums of your current employment situation, then don’t hesitate to do so.
Now that you have decided that you are ready to take the bull by the horns and turn your idea into a business plan, it’s time to take the next necessary steps. Before you do anything, there’s lots of research you need to do in order to build a sound foundation for your small business ideas.
Analyze Your Plan
At this point, you have come to the conclusion that you would like to create a business. Now it’s time to see whether you have good small business ideas or not.
- Are you passionate about it?
Sometimes simply having a great idea is not enough if you are not one hundred percent in love with it. The people who have the most success as entrepreneurs are the ones who love what they do. It can’t be understated how big a part of your life this new business will become.
You are going to have to get people as excited about it as you are. It’s going to be your job to sell and market this to customers, potential partners and investors, and even new employees. You want all of these people to connect with the product in the same way that you have. That’s why you need to believe in it wholeheartedly if you want to succeed.
This business is going to be taking up a majority of your time. So if you aren’t fully behind it and if you are not completely and utterly in love with the idea, then you are going to have a tough time finding the fuel to push it as far as it needs to go and to invest enough time in it as you will need to.
- Is there a market for it?
It doesn’t matter how great your idea is if there is no market for it. You need to determine what your niche is and whether it is large enough to sustain a successful business for an extended period of time.
But even if the idea isn’t that big, that should not discourage you from following through with it. For example, if the idea deals with a very small niche, but one that you are an expert in and one that you are very much in love with, move ahead anyway. It might not be able to ever become a full-time business, but it might end up being a great source of additional income doing something you absolutely love to do.
And who knows, it might grow enough to provide a singular source of income in time. As long as the passion is there, you should consider moving forward with your plans.
In either case, doing some market research before diving in is absolutely essential. The best thing to do is to perform a detailed analysis of your would-be competitors and all of the top dogs in your market.
Analyze your small business ideas. Who is operating within the same space that you wish to occupy? How successful are they? Do you have ideas for offering something that these competitors are not offering? Do you feel that you can offer something better than they can?
Answering these questions will give you a good idea of where you stand and what you need to do in order to potentially become the leader in your market space.
- What problem does it solve?
This is one thing that just about every successful business in the history of the world has in common: they were able to identify a problem that many people have and offer a solution for it.
Centuries ago, people did not have a way to keep their food from spoiling quickly, so they covered it in salt or brought ice and snow from the mountains to keep it cold. But none of those solutions offered real solutions. And then finally in the early 1780s, the first refrigerator was invented.
Humanity came about in the same way. Business owners needed a solution for managing their employees that was more convenient and efficient than using pen and paper or spreadsheets and BOOM – the birth of online scheduling.
People are always ready to give money to a company if they know that this company’s product or service is going to eliminate a problem for them.
Do You Have What it Takes?
Once you have decided that you do have an idea that is worth investing in, it’s time to see whether you have all the necessary elements to turn the idea into a profitable small business.
- Are you skilled enough?
Being an entrepreneur requires a special skill set that not everyone possesses. And while there are many people who would love to do a certain type of work, there are much fewer who possess the necessary skills for starting a business.
Just because you are an excellent cook and love cooking, might not mean that you have what it takes to open up and run your own restaurant. And while you might have what it takes to be an excellent professional cook, you might not have what it takes to perform all of the other tasks that are needed to run the whole operation.
And if you can’t run the finances and don’t know how to market your restaurant, it won’t matter how good your food is – plain and simple.
Remember, when you are starting out, you are going to be asked to wear a lot of different hats. Are you able to deliver a high-quality product or service while being able to market it, run your finances and manage yourself and others all at the same time? That’s what it’s going to take for your small business to have any chance of being successful.
- Are you financially able?
The thing about small business ideas is that they almost never become profitable very quickly. The general rule of thumb is that you can’t expect to start living off your new business immediately and, more likely than not, it is going to take at least three years for your business to become profitable in a best-case scenario. That’s why financial planning is so crucial.
Not only are you going to have to invest a good amount of money into starting the business, you are also going to need to find a way to be sure that you have money that you are going to be able to live off while you are building your business.
That’s why it’s a good idea to keep your day job at the beginning and work on your small business idea as a side job. Unless you are absolutely sure that you have enough money saved for such a risky venture or you have found a way to fund your idea with investors or loans, it’s a good idea to keep your day job.
If you want to go “all in” and leave your day job, here’s what you have to consider. Are you already in debt and will you be able to keep paying that debt off regularly without a steady stream of income? Do you have health insurance without your day job? Do you have enough money saved up to make ends meet without receiving a regular paycheck from a day job?
How much will you need to invest in your business? According to the experience of most small business owners, you should always be prepared to invest more than what your numbers are telling you. No matter how well you have planned, the amount of capital you are actually going to need is usually double the amount you estimated needing when you started crunching the numbers.
- Do you have a support system?
Having a strong base of people who are supporting you in this endeavor is of the utmost importance for many reasons. Remember, you are going into this on your own and you probably aren’t going to have the money to actually hire and pay people to help you for quite some time.
Do you have family and friends who are willing to chip in free of charge? Having a buddy that is good with finances or family members who know something about online marketing can go a long way. Pitch your small business ideas to them and ask them if it sounds like something they would be willing to help you out within their spare time. And if your business does turn profitable, always be sure to remember the people who were there for you in the beginning and reward them accordingly.
Secondly, if you have a family or are in a committed relationship, dedicating yourself to starting a new business is going to affect all of them as well. Remember, the difficult truth of the matter is that there is a greater chance that you are going to fail than succeed. If the people who are closest to you are not behind you fully in this mission, problems are going to be inevitable.
Make sure that the people closest to you understand that the hours are going to be grueling, that you are going to have less time for them than ever before, that you are not going to be able to spend money the way you used to, and that the stress of running your own business could regularly affect your mood.
It’s important that they understand all this, and most importantly, that they believe in you and honestly support your goals.
The road to starting a business on your own is no doubt a difficult one, but if successful, the rewards can easily outweigh the hardships encountered along the way.