When to start your own business?
Q: After working at one company for 10 years, I would like to begin my own business. What issues do I need to consider, and how do I know when it is the right time to take the “big step?”
A: Almost 20 years ago, my roommate asked me to spend a day of my vacation in New York spying on his competition at a tradeshow. I made up a story to tell the vendors at the show — I was planning to start a fundraising call center for politicians and wanted to implement the most advanced technology in the industry. Eighteen years later, my business partner and I were running one of the largest outsourced call center operations in the world!
With a bit of luck and a lot of hard work, we made it, but there is no way to eliminate the risks of entrepreneurship. There are, however, several key questions you can ask yourself to determine whether you are prepared.
1.) Do I have a business plan?
A clear business plan is essential, and the lack of a plan is a frequent cause of business failure. A business plan helps you assess, in advance, how you are going to address key issues.
I have found planning software, such as BizPlan, to be very helpful. It may take weeks or even months to develop a quality plan, because your ideas may need a gestation period before fully coming together. Throughout planning, it is important to find a source of objective feedback — ideally, someone who clearly understands the process.
2.) Do I have the energy and physical stamina for the venture?
Owning your own business typically requires long hours, and stamina is essential. It is common to work 12 to 16 hours a day, particularly during the first several years. Be prepared, and be honest with yourself. If you do not already have an exercise regimen, begin one now.
3.) Can I get the money I need to support the business and myself?
If your business plan is interesting and enticing, money will be available. Although most banks have little interest in financing a start-up these days, they can help you secure an SBA (Small Business Association) loan. An SBA loan can be valuable, even though it may require repayment before you can raise money elsewhere.
Another approach for financing your business is the “family and friends” model. If you go this route, do not overlook the strings attached. Your family dinners and get-togethers can quickly turn into shareholder meetings, particularly when your business is struggling!
There are numerous other options. Couples with two incomes may be able to independently afford the transition of one spouse into business ownership. You may be able to fund the business yourself, especially at the outset. Several years ago, I left my call center business, because it no longer filled my passion. I began my new business, executive coaching for entrepreneurs, by using money earned from my first venture.
4.) Does my family support this?
It is important that your family truly understand the demands of business ownership. There are subtle differences, for example, between working long hours for someone else and working long hours for yourself. “My boss needs this done by tomorrow; I have to miss Johnny’s game” becomes “I need to get this done by tomorrow; I have to miss Johnny’s game.” Before writing your plan, make sure all your stakeholders are aware of the details.
5.) How do I feel about making critical decisions and being responsible for others?
Owning a business requires constant decision making, often with no time for self-reflection or opinion gathering. Depending on the business, you may become responsible for other people’s livelihoods. Their families will count on their incomes, and your decisions and behaviors will significantly influence their lives. You will no longer be responsible for your family alone, but for all families supported by your business. From experience, I can tell you that this is more stressful than you might imagine!
6.) Am I willing to do things I have no business doing?
Owning a business may force you to learn subjects and perform tasks that have never been your forte. Aside from French, accounting was my worst subject in school.
Today, I am quite good at understanding numbers, purely because accounting skills are critical to successful business ownership. Similarly, I quickly learned to repair computers when we could initially not afford a service contract. If you resist doing things that you do not know how to do, reflect hard on your decision to start a business.
7.) Is your soul calling you?
I have always admired those who just “knew” it was their time, almost as though their souls were calling them. They reached a point when they could no longer work for someone else.
Your soul may be calling you. Have you begun arriving to work with your body, but not with your mind? Are you working to earn money, but dreading every moment of it? These are potential signals that it is your time. Just remember, however, your soul does not give a “Get out of writing a business plan” pass. Remember, your business plan is essential.
By John Benson