Starting a new business enterprise is a formidable undertaking. It involves both the mind and the heart for the new venture to succeed.
It can be quite fun to imagine what a new business started from nothing may look and feel like. But prospective entrepreneurs should do some very hard, steely-eyed thinking before starting this task. Good planning is essential.
At the risk of being a curmudgeon, and dampening the excitement, here is a quick guide for how to think through and plan for many of the decisions that need to be made.
This topic will be covered in two posts. This is Part 1.
Why are you doing this?
Many people don’t think through exactly what are the reasons they want to start a business. Though this is an obvious question, many don’t ask it.
If the reasons are not solid, the entrepreneur’s motivation and enthusiasm will be weak. The other side is that if the reasons are good, it will help the new business owner to persevere through the trials and tribulations to come.
Among the reasons people start businesses are: not having a boss, escaping the 9-5 grind (more like 7-6 in this era), having a better standard of living and quality of life, making more money than currently, and knowing that they can provide a better product/service than anyone else.
Why are you the best person to do this?
While it is always fun is imagine oneself being captain of their own ship, frankly, it is not a good idea for everyone. You don’t need to have a thorough psychological evaluation to know whether starting a business is for you or not but try to be objective and ask yourself the question. Do you have the needed skills, experience, and personality traits to succeed? Here are some examples:
- Are you excited about the prospect of competition or is it just stressful?
- Can you plan ahead or do you just shoot from the hip? Planning is essential. Hip shooting sounds glamorous but usually leads to problems.
- Are you outgoing to the point that you like to interact with strangers on a regular basis?
- Are you comfortable with managing people? This involves not just supervising them to do the work but also hiring and firing them as necessary.
- Do you treat your current coworkers with the highest level of respect? If not, you may suffer from employee turnover and poor morale.
- Are you decisive and confident when making important decisions?
- Are you organized in getting things done?
- Long hours will be required. Do you have the energy and stamina to do this?
- Do you have perseverance in the face of adversity?
- Are you familiar with the administrative tasks necessary to run a business such as legal, accounting, payroll, licensing requirements, and so on?
- Are you willing to risk your savings to pursue this dream? Do you have a financial cushion in place to accommodate the almost certain slow/down times? It may be some time before the business is profitable.
There is no right answer to these questions. But knowing the answers to them will help you assess whether business ownership and starting a business is the right thing for you.
