The transition from typical employee to business owner / entrepreneur can have its challenges. The upside is outstanding but there are also risks that should be considered. The path to entrepreneurship and starting a business will have you facing many challenges with one of the biggest being the financial strain when you first begin. No longer relying on a steady pay check or the benefits you've come to rely on as an employee can turn many potential new business owners off. Depending on your resources you will most likely be starting off with you being the only employee. This means you will be faced with tasks you may not enjoy or up to this point have no idea how to do. The basic nature of an entrepreneur however is to have the desire to overcome these challenges and stair adversity in the face with the confidence it takes to succeed.
I've written this not to scare or deter you from chasing your dreams but rather in an attempt to make this leap as successful as possible by sharing what I've learned over the years and having gone through it personally.
1. Begin by considering what it is in life that you've always wanted to do.
Now if your forty years old and always wanted to be an astronaut that's not what I'm talking about. I'm asking you to consider what you truly enjoy doing such as helping people or providing a unique service, physically building something just what you believe would make you happy and that you are passionate about. Don't think about the money yet brainstorming ideas about starting a business begins with passion first we will be determining the commerciality of your choice later.
Preliminary Checklist of Your Readiness to Start a Business
- I am willing to accept the risks and initial instability that comes with starting a business
- I am able to rely on myself 100% I can make decisions that make or break my new business.
- I work effectively on my own motivating myself without supervision. I do not rely on others.
- I am goal oriented and will work at completing my goals everyday without exception.
- I can visualise opportunities and have the confidence to go after them.
- I can handle the stress and pressures that are inherently apart of starting a new business. Even when things do not go as planned I believe I can overcome any problem.
- I posses the drive, determination and willingness to work long hours to make my business a success.
2. Determine The Business Ownership That's Right For You
The Three Main Ownership Options when Starting a Business are:
- Buy a Business that already exists.
- Franchise
- Start Your Own Business
3. Zero in on the Business you want to start
Consider these three different options
- Start a business in a high growth market or new up and coming trend,
- Turn your current employment into your own business-
- Start a business based on a hobby or interest
This can be one of the most exciting aspects of starting a business. The age old saying that really sums up this one is if you love what you do you'll never work a day in your life. It's not all roses here either though. A close friend of mine had a loved for the outdoors and decided to give up his sales job to pursue his passions as an eco adventure guide. He quickly found that as a complete start up the accounting and proper bookkeeping was something he absolutely hated. He was fortunate that he was able to pull from many of his corporate sales contacts to build his new business quickly positioned as a corporate team building activity. This quick growth allowed him to hire the accounting help he needed to stay clear of any tax troubles down the road and allowed him to stay focused on growing his business. Always be looking for synergies even if the business your started seems unrelated to what you old profession was there may be opportunities to be discovered.
4. Begin to research the Commerciality of your business idea
I would always recommend drafting a proper business plan, some may skip this step and if so it's important to at least answer the following.
- Determine what skills are needed to operate the business. Do you currently posses any of these skills or are you willing to learn them. Without the skills how will you learn them and what costs are involved.
- Determine the actual business operation, how it works, who are the customers, what are the products or services being offered.
- Does your business have commercial legs meaning what is the supply and demand within your market?
- What equipment, supplies or facility is necessary to operate this type of business?
- Forecast any possible overheads your business will be incurring when operating.
- How much capital is needed to start the business? Would banks entertain the idea of financing or is venture capital required. Do you currently have personal funds set aside or are friends and family willing to help. (Essentially where will the start up money come from?)
When everything has lined up just right how will you proceed?
- Resign or quit your job right way to begin working on the business?
- Stay employed while you begin the leg work (evenings & weekends)
- Reduce your current jobs weekly hours to dedicate more time to your new business
- Recruit an employee to begin laying the foundation while you're still employed with steady income
5. Include your family in your decisions
Having the support of your family will be a huge consideration when you decide to start a business. When your single without commitments there is far less to consider outside your own mental an physical well being. Remember it's your dream but they too will experience the hardships that starting a business can create. Make sure you already have or have planned for the needs of your household during this transition in to entrepreneurship. The recommended financial security is between 6 and 12 months living expenses ensuring you will have the ability to survive any bumps in the road during those first few months after starting your business.