Are You Ready To Start Your Own Business?

If you've dreamed of opening a small business, the recent economic downturn and high inflation rates could cause you to rethink the idea.  Before you give up on your dream, remember many successful businesses (e.g. Airbnb, Groupon, Beyond Meat) began during recessions.  Because each of them saw an unmet need and developed a solution to address it. 

Prior to quitting your job and sinking your life savings into a new business, make sure you understand what it will take to be successful.

Determine what makes your business special

Why would a consumer buy your product or service instead of John Doe’s around the corner?  Will you have better service? Is your product made with higher quality materials? Are your prices going to be lower? Will you focus on a niche market (e.g. high-end dog collars)?

Understand what it will take to run the business day-to-day

The Small Business Administration (SBA) offers free training, checklists, podcasts and videos via their website.  This should be one of your first stops on the way to starting your new business. SBA's guided Learning Center experience walks you through each step, including funding options.

Your favorite bookstores are also filled with advice from successful entrepreneurs who want to help you avoid the pitfalls they encountered along the way. But don't sleep on your local library. It allows you to "try before you buy". Most popular business books can be checked out in person, and online as an e-book or audio download. Your tax dollars are paying for the library, so why not use it?

If you prefer magazines, consider Entrepreneur, and one of the 50 websites Inc suggests for entrepreneurs.

Take the time to plan

Many people open a business without a clear plan.  They just assume everyone will love their idea, buy their product or service, and make them rich in the process.  No thought is given  to how the business should be organized, where it should be housed, or how much capital it will take to run it.  So when things don’t go as planned, the business owner becomes frustrated and discouraged. Creating a business plan is a valuable exercise which will help you to develop a roadmap for your initial startup and future growth. Yes, it may be time consuming initially, but it will help you to create a strong foundation for your business.

Ask for help but protect your idea

A mentor can be helpful at every stage, not only after you start your business. You can learn how to locate a mentor with our Finding The RIght Mentor blog. However, while you're waiting to start your business, limit how much you share about your unique idea . Otherwise you may be disappointed to learn your idea was stolen before you had a chance try it.

While most business owners are willing to help, there are some unscrupulous ones who may see it as an opportunity to enrich themselves. So, when you seek advice at this stage, keep the conversation general.  Say things like “I've always thought about opening a business like this, but it seems like a lot of work.  What's been the most challenging part of being in business?”  This approach will encourage the business owner to open up, while protecting your idea.

Identify your support system

The start of a small business can be stressful.  Do you have friends or family who you can count on if you need them?  Could they assist with childcare, make a quick run to the store, make phone calls or do others tasks you need help with?  Or are you essentially on your own?

If your spouse, friends or family members are not normally supportive, you should not assume they will be happy about your potential business venture.   The existing issues (e.g. constantly being undermined, envy, jealously, etc.) are likely to get worst as you become more successful.  

If you find yourself in this situation, you will need to create a new support group outside of your immediate circle of family and friends.  This can be done through professional organizations and groups whose members share your goals.

Get your financial house in order

Before you add the complexity of business finances, It's important to get your personal finances in order. This does not mean you need to pay off all your debt, but you do need to understand what it takes to run your household and what funds would be available to invest in your business. If you don't take this important step, you may realize you don't have enough money to cover your business expenses - when it's too late. And if you can't pay your bills, your business will close. It's that simple.

Make a pros and cons list

Grab a piece of paper and draw a vertical line down the middle. On the left side, list the reasons for going into business (pros). On the right side, list the reasons for postponing or abandoning the idea (cons). Note, having more cons does not mean you need to abandon your idea. You just have to determine if the pros are more important to you than the cons.

The prospect of starting a new business is exciting! Good luck as you determine what the right choice is for you.