Do you dream of starting your own business? Before you take the plunge, be sure business ownership is right for you by analyzing these five key areas.
Starting a business offers the exciting opportunity to pursue your passions while building something that’s uniquely yours. Still, entrepreneurship isn’t something to be taken lightly.
NPR reports that there were 5.4 million new business applications filed in 2021. Unfortunately, many of those don’t survive to see their five-year anniversaries. Moreover, some startup founders lack the personalities and traits needed to excel at being their own bosses.
If you want to avoid being another statistic, it’s important to assess all the factors that contribute to a business’ success before quitting your day job. Here are some steps to take before deciding if starting a business is right for you.
Consider the Timing
The fact that you have a creative idea and the willingness to work hard doesn’t mean it’s the right time for you to start a business. Before embarking on a career as an entrepreneur, take a moment to assess other factors in your life, such as family concerns, financial issues, and the availability of those team members who will play a vital role in the formation of your company. After all, you don’t want your dream business to fail because your focus is on personal issues, such as taking care of a new baby or an ailing parent. Similarly, you don’t want to waste time waiting around for business partners to do what they promised.
For best results, if you discover that personal factors could prevent you from devoting your full attention to the business, consider delaying your launch for a few months until the timing is right.
Consider Your Finances
Starting a business is expensive, and entrepreneurs need to get their financial ducks in a row before launching their dream companies. Because it’s often months before online businesses become profitable—and even longer for brick-and-mortar establishments—aspiring founders need to take stock of their finances and determine how long they can afford to go without working. To protect yourself and your loved ones, it’s wise to save at least several months’ worth of expenses before quitting your day job. That safety net will help ease your anxiety during the early, stressful days of business ownership and allow you to take the risks that are sometimes necessary to succeed.
Along with a nest egg for living expenses, startup founders need to sock away money for costs associated with their businesses. In addition to production costs, strive to save money for marketing and promoting your company to prospective buyers.
Consider the Market
The success of your business depends in large part on the state of the market you hope to enter. Before launching your startup, take time to study the market and determine if a niche exists for your goods and services. Consider what items your audience is already using and how your invention would fit into the existing market. In some cases, it might be necessary to adjust your product, your audience, or your timeline to ensure the best results.
Consider Your Personality
Not all personality types are equally suited to careers as entrepreneurs. Along with creativity and ambition, startup founders need to possess a natural talent for leadership and the ability to communicate with those around them. After all, you can’t get people excited about your ideas if you don’t have the talent to share them in a way that’s clear and articulate. Additionally, the best entrepreneurs are good collaborators who know how to work in a team environment to accomplish their goals.
Of course, even the most skilled startup founders are unlikely to excel in every way. If you aren’t a good listener, you can boost your odds of succeeding by choosing a second in command who shines in this area. The goal is to choose partners and teammates who complement your skills while supporting your unifying vision.
Consider Your Support Network
The stresses associated with new business ownership can be overwhelming. As a result, it’s important for aspiring entrepreneurs to make sure they have strong support networks in place. Before starting a business, check in with family and friends to discuss your plans and make sure they are going to be there to offer support. In particular, it’s important to make sure your significant other is on the same page. These individuals can help you maintain a healthy work-life balance—and even your sanity—during the early days of business ownership.
The fact is that failure rates are high for startups. However, founders might be able to boost their odds of success by joining forces. According to a recent study, companies with two founders raise 30 percent more investment money and grow their customer bases three times as quickly as those with just one. A partner might be just the support system you need to help your business succeed.
Take time to consider all the factors that could affect your small business’ success before launching the company of your dreams.