After losing a job (or even quitting a job), the thought of how fulfilling and satisfying owning and running your own business would be tends to cross your mind. While taking on self-employment can be the most rewarding decision of your life, it can also be a costly one. Here are some questions to consider before you decide to forego applying for new jobs in exchange for starting your own business.
- Do you have passion and motivation?
- Starting your own business is going to have several ups-and-downs, if you do not have the passion or motivation to roll with the punches, then you will sink with your business. Having passion means that this business may have been on your mind for several years now. Your idea should not only be something that you believe in, but something that you think others will want to be a part of. Once you recognize your own vision for the future of your business, you have to take action. Your motivation will give you the strength to overcome obstacles because as a new business owner, you are the one responsible for its success or failure.
- Do you have a business plan?
- All the passion in the world means nothing if you do not have the right business model, plan, and skills to get the job done. Do the research and master your understanding of the field that you want to enter. Many models have been tested and proven, but now you have to develop your own business plan that will be able to standout and compete in the market. Take classes in business management or teach yourself how to read and understand financial reports, best practices, legal requirements, and marketing. All of these skills will help you to be better prepared in business meetings, employee interviews, and any court situations that may arise (lawsuits or patent-filing).
- Do you have financial resources?
- Having the right financial backing is key to getting a start-up off the ground. You may already have some savings for the venture or a great credit score/history, but money goes fast. It is hard to find people that will recognize your vision and be willing to work for free, so you be will have to give your employees their paychecks, pay for all of your resources, and probably start paying rent or developing a store location. If you think your family or friends are willing to contribute, don’t be afraid to ask. Some of them might even want to form a partnership. If you do form a partnership, be specific on the terms and thoroughly explain the role you want to have and the role you want them to have.
- Do you have an exit strategy?
- Whether your business becomes a huge success or it doesn’t quite reach its potential, you are going to want to have an exit strategy. An exit strategy will help you to better understand your goals and aspirations, which in turn will help you to make important decisions. For example, if you want to keep it a family business and exit on your own one day, you will have to choose and train your protege. If you plan to sell if for a large profit, you have to document everything to back its history, have signed and valid contracts, and keep good relationships with customers and clients. Most importantly, if your business is not turning the profit you expected, you have to have a strategy in place that keeps a roof over your head.