Should you start your own business and plunge into the precarious world of entrepreneurship? That’s the big question. Starting a business can be wonderful and rewarding when all your efforts pay off—but if you’re not ready and you don’t know what you’re doing, you might end up losing a lot of money and self-respect. It’s critical to know you’re ready before trying to be your own boss. Here are some ways to prepare for being a business owner.
Think About What You Want For Your Life
You might be craving the entrepreneurial lifestyle because it appears to come with a lot of upsides. An entrepreneurial life is generally supposed to equal a level of autonomy you don’t get when you’re in the 9-to-5 crowd. As an entrepreneur, you’ll get to be your own boss, answering to nobody except yourself—in theory, you’ll be the one in control and calling all the shots, doing something you’re passionate about. You’ll be allowed to set your own working hours outside the confines of the 9 a.m. to 5 p.m. schedule. Plus, entrepreneurship has the potential to lead to some serious financial gains. Sounds great, right? Most people want agency over their life, financial freedom, and a sense of meaning. These benefits are all associated with entrepreneurial life.
Understand What You’re Getting Yourself Into
Entrepreneurship seems to be the perfect escape from the daily grind—and there is some truth behind the promises given to aspiring entrepreneurs. However, being an entrepreneur isn’t easy and anyone who wants to try their hand at it needs to be prepared for the pitfalls. You might find you’re not getting as much work-life balance and flexibility as you hoped. Running your own business, particularly in the beginning when you don’t have the capital to hire help, is likely going to require you to put in more hours than you would in a 9-to-5. Long hours may not be a problem if you’re passionate about your idea and the love for your business is unfaltering, but they may hurt if you went into entrepreneurship believing you’d escape eight-hour days. And it may be a letdown if your long hours don’t bring in quick money, nor is it going to be fun when you realize you’re not technically calling the shots. Consumers and employees alike can cave your business if they don’t appreciate your offerings or find you lacking in leadership qualities and social responsibility.
Determine If Your Idea Has a Future
You might assume you have a great idea, and you’re passionate about your new potential business venture. But being excited about an idea doesn’t necessarily mean your business is going to be untouchable. You’ll need to examine who’s out there doing almost exactly what you’re planning to do and then find an angle that differentiates you from the competition, all while ensuring your target market would have the money and motivation to embrace your unique business approach. But even if you’ve done your due diligence and researched the market, you might still fail. One in five small businesses go under within the first year. While the odds aren’t terrible, the risk of significant loss is still something to consider.
Make Sure Your Business Plan is Solid
Determining if your idea has a future and taking stock of the competition are also essential components of a business plan—and you should not even consider launching your business until you’ve crafted a comprehensive and compelling business plan. Your business plan keeps you on track, reducing your risk of failure. You’ll be set up to understand how your business would meet any demand for supply, address competition, navigate financial instability, and run marketing campaigns. Having a business plan also helps you look smart to money lenders and investors, which increases your chance of raising funds you can put toward business development. A business plan is your safety net—and if your business plan doesn’t work, then your business isn’t going to work.
Ensure You Have Appropriate Resources
Obviously, when you want to launch a business, you’re going to need some money to get you started. It doesn’t have to be a million dollars, but starting a business won’t come cheap either. Fortunately, there are a number of lenders and investors willing to loan money to entrepreneurs, if you’re struggling to raise the funds yourself. Do your research to figure out how lenders and investors operate, the risks of taking out loans and working with investors, who’s going to give you the best deal, and where you’ll find the most forgiving repayment plan. In addition to financial resources, it’s best not to start a business without securing mentorship either.
Luke Miles | Contributing Writer