After years of being unhappy at a job, you’re thinking of quitting. After months of having no luck finding employment, you decide it’s time to approach your career from another angle. To balance taking care of kids and pursuing your passion, you want to be able to work from home. Whatever brought you to the conclusion that you’d like to start your own business, pause before you quit your current job or invest any of your savings. Ask yourself a series of questions to determine if you have the follow-through and financing to achieve your dream.
1. Do I Have the Experience Necessary?
You’re no longer going to need to pad your resume for a job interview, but instead of impressing potential employers, you’ll need to impress customers and investors. Even without whipping out your resume, you simply need the education and experience that comes with an advanced degree and a few years in the field in order to succeed. Earn a degree that will teach you what you need to know to run a business, such as a master’s in organizational leadership. Before you invest in a new business, invest in yourself so you’re ready to tackle all that business ownership throws your way.
2. What Do I Have to Offer?
Having a talent is a start, but it’s not enough. You must have something new to offer, or at the very least, you have to be able to offer something old in a new way. For instance, you might be able to offer a product for cheaper than your competitors, or you might be able to add just a slight difference that makes your version seem new. Indentify a need in the market and find a way to make your products or services stand out.
3. Who Is My Ideal Client?
Once you know what you intend to offer, you have to think of the type of people to whom you’ll offer it. It’s not a smart business plan to say you think everyone and anyone will buy your product. A smart business owner knows that there are few things a teenage boy and a 60-year-old woman will both want, for example — even their tastes in common enjoyments, like food and films, will be different. Identify the ideal client, including age, gender, location, average income and family size, and research people who fit that description in your targeted area. Identify where your targeted consumers are most likely to hear about your business before you even launch it.
4. Will I Be Able to Lead?
Not everyone with a talent has a talent for leadership, but small business ownership requires a lot of it. You’re going to have to juggle everything on your own for a while. If that doesn’t seem ideal to you and you want to focus on product or service development and marketing, you might consider opening the business with someone who’s better at leading and running the business end of things. You might also consider starting extremely small, with an online storefront run from your own home. You won’t be leading other employees, just working with other consultants you hire for whatever additional help you need, such as website design and accounting. Even so, these consultants will rely on you for your vision, so you have to embrace at least some of the responsibility of leadership.
5. Do I Have Enough in Savings?
How much money you’ll need to start a business depends on the size and scope of your business. You might be able to start with a few thousand dollars toward licenses and a website and work entirely from home. You may need more like $100 thousand to rent a storefront, buy materials, hire people and get started. You’ll likely be in the red several years — even successful businesses operate in the red at first. Meet with a financial representative to discuss business loans and make sure you have enough savings to live before you invest a cent.
Forbes reports 80 percent of new businesses fail in just the first year and a half of operations. Starting a business is a dream many Americans share, but with so many unable to achieve it successfully, it’s important that if you’re going to commit to this risk, you prepare yourself as much as possible. Start by asking yourself a few questions, and if you find you’re not ready, keep striving until you are. It’s better to delay until you’re fully prepared than blow your best chance at success.