Starting your own business takes courage and the ability to think ahead and stay focused even when under immense pressure. If you haven’t really thought out the purpose of your business and defined your goals, the odds of your success are low. Before you begin the startup process, take time to ask yourself the following four questions and find out if you are ready to start a new business.
1. Are you comfortable with financial insecurity?
In question 3, you are going to learn how sound financial, business, and market planning will help your business succeed. However, things seldom go according to plan. You have to be comfortable with financial insecurity, at least until you are firmly established in the market. It may take longer than you plan for your business to turn a profit, the economy could take a dip during a critical phase in your launch, or your customer base may not respond to your initial advertising and promotion strategies. Build as big as a nest egg as you can but know that it still might not be enough.
2. Do you have a team?
Every new business owner needs to have a support system in place, and your family and close friends will probably make up a great portion of that system. You will be bucking quite the headwind if your family isn’t in support of the risks you are about to take.
Another part of your support system should include an arsenal of business and marketing materials published by reputable and knowledgeable business experts. Read as much as information as you can about operating a business, marketing and promotion, and business finance.
Consider joining an online network of business professionals for real world advice and assistance.
3. Do you have a plan?
Business plans, financial plans, and marketing plans are necessities for any business. The information you research, collect, and analyze will give you a better understanding of your customers, and how to connect with them. This information will also help you determine:
- if you need to secure a business location or if you can work from your home
- if you need to hire staff, independent contractors, or get volunteer assistance from friends and family
- who your competition is and how you will differentiate your business to help you stand out in the marketplace as well as your market entry price points
- how much money you will need to support yourself, your business, and any employees you have hired until the business begins to turn a profit
- how much capital you will need to cover your expenses, such as for utilities, equipment, furniture, taxes, wages, and inventory
- if you need insurance, and of what type
- how you will market your business and what type of advertising budget you will need
- your specific goals and how long you can expect it to take you to achieve them
- how to establish your legal business identity and what types of taxes you will have to prepare for
4. Can you handle setbacks?
Successful business owners know the importance developing a plan B for when things don’t go as expected, and they seldom go exactly as planned. If you run into a wall during the startup phase, will you have the flexibility and financing to take an alternate route? You need to know these things before you enter the marketplace.
Research, sound financial planning, understanding the market, and knowing the wants and needs of your customers is what builds a solid foundation for the success of your new business. If you have done the planning, and can answer yes to the questions asked here, then you are ready to start your new business.