For many, the idea of starting a business is an amazing dream. After all, you get to be your own boss, call the shots, and, if you work from home, you get to do it all in your pajamas. But becoming an entrepreneur isn’t for everyone, and you’re wise to give it a great deal of thought beforehand. If you’re considering starting a business, first answer these questions:
1. Are You a Risk Taker?
Running a business can be risky. There’s no guarantee your idea will be profitable, you may not even earn a steady salary. If the idea of such an uncertain future is more than you can handle stress-wise, consider starting a side business while you stay at your full-time job.
2. Do You Know How to Run a Business?
While it’s not necessary to have an MBA to start a business, you should have some skills, experience, or interest in running your own company. You’ll need to be well-versed in management, operations, marketing, and leadership, and be confident in making important decisions that will set the course for your success.
If you’re shaky in one or more areas of running a business, go the DIY route to learn the skills you lack. Buy books, read blogs and magazines, and attend seminars or continuing education courses to bone up. Here are some resources to help you:
- Bizlaunch: free small business webinars
- Small Business Association: useful small business content and advice
- Coursera: free online courses, including small business topics
3. Is Your Family Ready for the Strain Starting a Business May Cause?
Starting a business will affect more than just you. It’s your family that will feel the brunt when you spend long hours building your business. It’s difficult to give 100 percent to both your business and your family. While the number of entrepreneurs who get divorced hasn’t been documented yet, many believe it’s even higher than it is among non-entrepreneur couples.
Sitting down and discussing what you envision for your business with your partner and older children or other close family members can go a long way to ensuring you keep the lines of communication open. Make sure you manage your loved ones’ expectations, and you find a way to balance their needs with that of your fledgling company.
4. Are You Prepared to Put Your Life Savings Into the Business?
Starting a business is costly. Not only do you need enough cash for those startup expenses, but you also need enough to carry you through your first year, both in terms of business and personal expenses. You can take out a business loan, though many banks are reluctant to give loans to new businesses if you don’t have a proven track record.
If you have money in savings or your 401(k), be certain the business is worth jeopardizing your rainy day or retirement fund for. The most important thing if you do use savings or take a loan out against your 401(k) is to pay the money back as quickly as possible.
5. Are You Passionate About Your Business Idea?
It’s one thing to come up with what you think is a genius solution for, say, kids wearing holes in the knees of their jeans. But is it something you’re truly passionate about? Can you see yourself running the business for years to come?
You need to be able to commit to living and breathing the industry you’re about to join. Your passion for what you do (or lack thereof) will be obvious to clients, and if you have it, it’s what will help win them over.
6. Are You Committed to How Much Work It Will Take?
If there was a guaranteed fast and easy way to launch a successful business, everyone would do it. You’ll have to put in a lot of time, money, and energy that will no doubt take away from other aspects of your life, at least in the early months. You’ve got to be able to keep pushing, even when you’re ready to give up.
These are tough questions, but if you answer them honestly, you’ll likely be better prepared to launch your venture.
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