Are you ready to start a business? Before you dive into the entrepreneurial world, make sure you’re prepared for the realities of business ownership.
For example, do you know how much money you’ll need to get started or how much money you’ll need to make each month in order to pay your bills and support yourself and your family? Do you know how much time it will take to make everything work and start generating a profit? There are many things to consider when you’re trying to decide if you should become a business owner.
Starting a business can be exciting and extremely rewarding, but ask yourself these 10 questions before you quit your day job:
1. Why do you want to own your own business?
What’s your goal? If you’re starting a business simply because your current boss is driving you crazy or you’re bored with your current job, then you might want to rethink your career direction before you invest everything into starting a business.
If you aren’t passionate about entrepreneurship, you won’t be able to handle the ups and downs inherent to it. Owning your own business doesn’t magically solve your career woes.
2. Do you have any business education or experience running a business?
Owning and running a business requires some knowledge. You need to understand things like cash flow, budgets, supply and demand, marketing, sales, taxes, laws, and even human resources! If you don’t know how to run a business, you need to start educating yourself or get the right people to help you (see #10).
For example, do you know which is the best structure for your business entity—sole proprietorship, partnership, limited liability company or s-corp? This is an extremely important decision that will affect you and your business for years to come. If you don’t know the answer, then you need to get help.
3. Are you self-motivated?
No one else will pick up the pieces if you take a day off or just don’t feel like completing a specific project one day. As a business owner, you need to be 100% self-motivated or things will fall apart.
4. Do you have some money to pay the bills?
It takes time to earn enough money as a business owner to be able to support yourself and your family. Make sure you have at least six months of income in savings before you quit your day job (a full year of savings is better) or secure the right funding to start your business in the best way possible. Not all business funding options are created equal!
5. Can you comfortably wear multiple hats and take on many roles?
Business owners often have to do it all, particularly in the early days when they can’t afford to hire employees. You need to be knowledgeable in numerous areas and be able to multitask so you can switch from one role to another at a moment’s notice.
6. Are you flexible?
Nothing is certain in business ownership, so you need to leave any perfectionist tendencies behind you when you become an entrepreneur. Things will change, and you need to be flexible enough to adapt quickly. If you can’t, then business ownership won’t be rewarding for you. Instead, it will be a constant battle against the way you like to do things.
7. Does bootstrapping get you excited or worried?
When you start a business, there are many expenses. You need to buy supplies and equipment. You might have to purchase inventory or pay for an office or storefront. You’ll need to pay for phone lines, internet access, a website, merchant processing, and more. At the same time, you need to invest in marketing to get the word out about your new business and start making sales.
You’ll need to find creative ways to cut costs and maximize returns on the investments you do make. If operating a lean business and creatively bootstrapping to drive growth isn’t appealing to you, then the reality of business ownership might not appeal to you either.
8. Are you ready to invest in your business?
To start a business that has a chance to succeed, you need to be willing to invest time and money into making it happen. For example, it might seem easy to skip investing in things like legal advice, intellectual property protection, insurance, and tax advice, but by skipping these fundamental steps, you could end up in trouble and paying a lot more money to fix your mistakes later.
If you’re not willing to spend some money to start your business the right way, then you just might see it crumble later.
9. Can you sell?
As a business owner, you need to sell a lot. You have to sell yourself to investors if you need to secure funding. You have to sell yourself to employees to entice the best talent to work for you. You also have to sell your products and services.
If you can’t sell, start educating yourself or find someone to help you who can sell. After all, if you don’t sell anything, your business won’t make any money.
10. Are you all in?
You must be 100% committed to building a successful business or your chances of failure skyrocket. No one else will ever have the same level of commitment to your business that you will have.
As a business owner, you’re no longer just an employee with just a job. Instead, your business is a critical part of your life and you have to be all in. That means your business needs to be your main focus. It can’t be your hobby or your side gig that you do in addition to your full time job.
11. Do you have support?
When you start a business you need support. I’m not just talking about manpower. Yes, you need employees to help you get the work done and people to provide business knowledge that you might not have yourself, but you also need emotional support.
Owning a business is stressful, frustrating, exciting, scary, and even heartbreaking. You need emotional support to help you get through the good times and the bad times. The most successful entrepreneurs understand that they can’t do it alone.