For many of us, becoming our own boss and living life on our own terms is the dream.
If you’re working a 9-to-5 and you’re not passionate about your work, starting up might sound like the perfect goal. You get to do something you love every day, manage your own time, and independently control how much money you make. You can say goodbye to thankless managers, performance reviews, and office politics. You no longer have to answer to anyone. Sounds great, right?
While some of those perks might be possible, you will struggle to find an entrepreneur who thinks his or her situation is perfect.
The reality is that running a business can be really challenging. Owning a business requires an immense amount of hard work, mistakes and isn’t something you can conquer overnight.
It takes a lot of research and planning – along with having certain skills and personality characteristics – to succeed as an entrepreneur.
Here are some of the questions you need to ask yourself before deciding whether it’s the right time to start your business.
Do you have a business idea, and have you assessed its viability?
Do you enjoy working with different types of people?
Do you understand your strengths, weaknesses and how to leverage the skills of others to build your product or service?
Are you a good communicator and are you willing to work on your personal brand?
Do you know what it will cost to launch your business and built a plan for where the funds will come from?
Do you have a survival budget to sustain yourself or the income to start up while you work?
Are there certain aspects of owning a business that you don’t want to do, like accounting, marketing, administration and recruitment? If so, have you lined up organisations or individuals to do these tasks?
Are you willing to give your business everything you’ve got to make it successful?
Getting started – Business Plans and Finances
If, after answering these questions, you decide you’re still cut out for entrepreneurship, then now the real work starts. It’s time to start putting together a business plan and getting your finances in order. You’ll have to give your business a name, start building your team, set up your business location and start promoting your business.
The good news is that not all of this need to happen at the same time! Two of these, however, should start as early as possible. Getting your finances right and building a business plan.
When it comes to getting your finances right, the first step is to estimate how much capital you need to get started, what it will take to keep you going each month and what amount of sales revenue you need to make each month to make the right rate of return. At this stage, your numbers will be largely estimates, but it’s important to get this down on paper. Once you know approximately how much you will need, it’s time to explore various funding options. Keep in mind that you can seek funds from various sources to get your business started.
After finances, you then need to start writing a business plan. If you’re looking for investor (equity) funding or a loan (debt) from the bank, your business plan will need to be fairly traditional and structured in its style. Even if you’re not looking for these kinds of funding, it’s still important to have a plan in place though it doesn’t have to be as formal.
At a minimum, your business plan should outline the following:
Business overview – including history, vision, mission, objectives and ownership structure
Product and services – features and benefits, competitive advantage
Market context and marketing strategy
Your business plan and finances are the most important elements of the start up process – but it’s just the start.
This is a first in a series of posts about starting a business – watch this space!