It seems everywhere you look nowadays people are starting their own business, or touting how successful their online side hustle is. Recent events around the world have also forced many to attempt to diversify their earnings in order to give themselves a financial cushion.
With so many one-man businesses and tech nerds making millions of dollars seemingly overnight thanks to technology and the Internet, entrepreneurship, an otherwise difficult road, now looks very glamorous and appealing.
The stories you hear are a great source of inspiration but it can be tempting to make you start your own business for the wrong reasons.
There are lots of high feelings attached to starting your own business. It feels great to see your own business card with “CEO” or “Managing Director” on it, great to see your shop open for the first time or receiving your first order.
But first, you must ask:
Do You Really Want To Start Your Own Business?
It’s a great way to earn extra money, replace your day job, and learn new skills.
However, the decision to start your own business needs to be well thought out. So, to help you in making that decision, here are some questions you should ask yourself before you decide to take the leap.
1. How Honest & Determined Are You?
You have to be brutally honest with yourself about your business, idea, and ability to earn income. Many businesses can be done on your own, and many require a team effort. Are you able to gather the right people AND delegate tasks?
Ask yourself what the reality of the business is. What is the realistic potential to earn money? Is the barrier to entry something you will be able to overcome?
On the flip side, how well do you take honest feedback? I think that insecurities arise because we aren’t honest with ourselves about our own capabilities. Hearing it from someone else can make it that much harder to deal with.
How determined are you to make this work? Because there will be many late nights, early mornings, and a ton of delayed gratification.
2. How Do You Handle Adversity?
Your first business is always the toughest to run. Once your first business succeeds, it becomes easier to take the leap with another venture. Even if your first attempt doesn’t succeed, the second attempt comes with experience and so your likelihood of success is higher.
Starting a business comes with lots of hurdles and challenges. The struggle is real. To get to a point of financial freedom, and freedom to dictate your time and schedule, you have to put in the work first. The beginning will be filled with high pressure, high-stress situations, and setbacks. You have to be able to work through them in order to survive and grow.
3. Do You Know What You Don’t Know?
A university degree isn’t by any means a requirement to succeed. It is well known that a lot of famous businessmen and women have dropped out of school, and many never step a foot into one.
While you don’t need a degree, you do need to be in a learning mindset. You do need to acknowledge that you don’t know everything. Knowing what you don’t know can help you fill in the gaps with the right people and team. Alternatively, if you’re going solo, it will provide you with a roadmap of what to learn and where to grow.
Part of this process is staying humble and understanding that it’s ok if you have help; it’s ok to outsource and delegate your weaknesses while you work on your strengths. It’s also important to realize that you need to keep learning as you grow your business.
For instance, you may hate math, or not be super comfortable with it. But when it comes to your business, you need to know and understand the numbers. Even if you outsource the management of your books, you need to practice and be comfortable with multiplication and addition, and percentages should be your close buddy.
At the end of the day you have to be the one to answer questions regarding your business, and you are the one making big decisions. Those decisions are contingent upon having the correct information and understanding it.
4. What Is Your Work Experience?
Working for someone else first can make it easier for you to run things for your own business. It gives you firsthand experience, lessons, and takeaways that you can bring with you. Not only that, it expands your network and your ability to make the connections you need to progress with your venture.
If you don’t have any experience, and it’s your first time starting a business, then consider gaining some before you venture out on your own.
5. What Is Your Work Ethic?
Getting a new business started requires that you work really hard. Over the years, research has continued to show that people who run their own business work harder than people who are employed, with the average being over 45 hours a week.
Understand that it will take time before you get to the “freedom and flexibility” stage. It requires a lot of persistence and consistency along the way. You have to have the work ethic to support those requirements.
6. What Is Your Risk Tolerance?
It’s not news that most new business fails within a year or two. To be a successful business owner, you must be willing to take risks. You also need to be able to discern when to take a risk and when not to – to assess a situation and weigh up the pros and cons. Just because entrepreneurs are called risk takers doesn’t mean you should go about taking just any risk.
7. Will Your Business Require A Team?
The decision to start a business with others can be a good idea and at the same time be a very bad idea. There are many partnerships that have been of tremendous success and many more that are a total disaster. In most cases, money is usually at the root of many disagreements, and most business disputes.
Only you can decide whether you are the sort of person to cope with these pressures, either alone or with partners. But you should think about it thoroughly.
If you choose to go with partnership, make sure to put down in writing the basis of your agreement – ideally get a lawyer to review it. It’s worth the time and money to formalize the partnership and protect the friendship.
Even if your answers to some of the above are less favorable, you can still pursue entrepreneurship. The idea here is to emotionally push your comfort zone, be open and honest about what you know, are capable of, and what you’re willing to do.
Very few people are able to build businesses on their own. When it comes down to it, you just have to be willing to put aside pride and put the business first.
Here is one last one:
Is it right for you?
There are plenty of reasons to start or not to start a business. But, there is no point in starting a business that you know won’t work, or isn’t a good fit for your goals. Consider the financial implication of every possible outcome and understand the risks you would have to take.
Understand that what works for others may not work for you. No matter what, do your due diligence, and be willing to pivot. Finally, always remember that it’s always better to try and fail than to not try at all.