If your New Year’s resolutions include quitting your job and starting a business, you’re not alone. What could be more fulfilling than calling the shots, setting your own hours, and making things happen?
However, going off on your own is no easy feat, and many would-be entrepreneurs quickly become unsettled by the hard work and uncertainty of the lifestyle.
You can’t prepare yourself for every aspect of running your own business, but here are some key questions to ask yourself before taking the plunge.
1. How well do you work without a playbook?
Do you need constant guidance and motivation from others? How well do you manage your time if no one is looking over your shoulder or a boss doesn’t set a deadline?
Many people think that being the one in charge is going to make life so much easier, but that’s not always the case. It can be difficult to get started when there’s no clear indication of what you should be doing or where the starting line even is. Successful entrepreneurs are naturally independent, resourceful and don’t need someone to hold them accountable in order to be efficient and productive.
2. Are you an inventor or entrepreneur?
A lot of successful startups are hatched from an amazing idea. However, a great product idea or invention isn’t necessarily enough to make a great business. Too many times, an “inventor” type stays focused on the product, the prototype, the patent, etc., ignoring the other aspects of developing a business. Just because you develop a great product doesn’t mean that customers will instantly flock to you door. Entrepreneurs get that.
Of course, if you consider yourself more of an inventor than an entrepreneur, this doesn’t necessarily preclude you from starting your own business. But perhaps you should look for a partner with complementary entrepreneurial skills and interests to help take your idea to the next level.
3. Does your business idea offer value to customers?
Maybe you’ve heard the saying “Love what you do and the money will follow.” While this sounds nice in theory, it doesn’t always work that way in real life. There’s no doubt that passion is an important key to success, but in order to build a profitable business, you need to offer something that others are looking for.
After all, the market doesn’t care that you’re fulfilling your lifelong dream. People spend money on products or services that fill a need or desire. If there is no customer need, the business will fail.
4. What is different about your business?
Is your business idea similar to other businesses already out there, or do you have something unique to offer? How crowded is your target marketplace? These are important questions to think about, but bear in mind that the key to success doesn’t always hinge off finding a completely empty field (and good luck finding one!). Rather, it depends on how you define your company and its place in the market. Starbucks was hardly the first company to sell coffee, and they won’t be the last.
In short, you don’t always have to come up with a brand new idea. Take a look at your target industry and see where there’s a void to be filled. Figure out the best possible way to fill that need and run with it. You don’t always have to forge a new trail, but you have to give customers a compelling reason to choose you over the competition.
When you’re an employee within a company, there’s someone to call if the printer stops working or you want to coordinate a trade show booth. This isn’t the case when you’re just starting out.
Launching a business typically involves wearing many hats and, sometimes, all the hats. You can be tech support one hour and a salesperson the next. Before setting off on your own, make sure you’ll be comfortable performing a variety of functions, including the less-than-glamorous ones.
6. Do you have the financial foundation to start right now?
If you need to know exactly when your next check will arrive, working for yourself is going to be extremely stressful. Small businesses, including freelancers, have ebbs and flows in their income. And when you’re launching a product-based startup, your business may not be profitable for at least three to five years.
It’s important to be realistic about how you’ll support yourself and your business financially. In many cases, the best time to prepare for launching your own business is while you’re still working another job.
7. How do you handle rejection and disappointment?
When you’re deeply invested in what you do, it’s hard not to take each rejection personally. However, as an entrepreneur, you’re going to receive lots of bad news — maybe from an investor, lost sale or poor blog review. If you spend time dwelling on the rejection or feeling bitter, you’re not only wasting your time, you’re also not learning anything from the experience.
Asking yourself the tough questions ahead of time could mean the difference between success and failure. However, if one or two answers should give you pause, don’t let them scare you away from following your dreams altogether. It’s still more than possible to be a successful entrepreneur, but you may need to take some extra steps to address where you’re short.
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