Is Starting a Business Right For You?

by smallbizbee · 1 comment

One of the first questions to ask, and the hardest to answer, before starting any business venture is “Is starting a business right for me?” By starting your business after some serious self reflection you’ll be getting off on the right foot and giving your business a chance at success from day one.

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Consider This:

Do you enjoy making decisions and being in charge?
Are you willing to take risks and accept the outcome?
Are you adequately capitalized?
Are you flexible, and can you adapt to change well?
Are you good at short and long term planning?
Do you have strong people skills and build relationships easily?
Plus many others…

Let’s take a look at these one by one so we can illustrate the importance of each before you jump head first into the deep end of business ownership.

Do you enjoy making decisions and being in charge?

From the first day you decide to go into business you will be the decision maker for your operation. From your business name, to who you will use as a supplier, to whether or not to hire help, these decisions and more you will need to make. Also as your business grows you will continually be accessing and making decisions that could positively or negatively affect the success of your business. When running your own business there is nobody to hand off the tough decisions too or escalate an issue. You will need to be comfortable in this role, and able to act decisively when needed.

Are you willing to take risks and accept the outcome?

The key word here is to accept the outcomes of the risk you take. Many people say they are okay with risk, or that they don’t have a problem taking a risk, but the more important side of that equation is the acceptance of the outcomes those risk involve. If for example you choose to put your life savings into a business venture because you think it’s “worth the risk” then you must be able to accept the outcome of loosing your savings if the business does not perform as you thought it would. I’m not saying you will loose your life savings if you start a business, but even something that has a 90% chance of success still has a 10% chance of failure and you need to be able to accept the downside possibilities.

Are you adequately capitalized?

This isn’t to say you need to be wealthy or rich to start a business, but you will need to have some money. While starting a business on a shoestring is possible, to give your business the best chance for success having some money as reserves is a must. While there are programs to get the money you need to start your business, buy products, and market, some emergency reserves are a good idea in case personal expenses creep into the mix as well. While I can’t tell you exactly how much money is enough (that will depend on the type of business you start and what your personal financial needs are), I can say without a doubt the more the merrier. You will have a little more leeway if you intend to keep working while setting up your business, but if you intend for your business to support you and your family from day one cash reserves are necessary to bridge the gap until your business replaces your earned income. The last thing you need is to be worry about how to pay the mortgage when you should be focusing on building your business, and concentrating on operational efficiency during the startup phase.

Are you good at short and long term planning?

Planning is extremely important when starting a business. You will need to be comfortable planning 1 month, 6 months, 1 year, 5 years, and even 10 years down the road to properly address the needs of your business. The last thing you want to do is start your business without a plan for the future only to see a success idea get blindsided 1 year down the road because you didn’t plan for it.

Do you have strong people skills and build relationships easily?

This many be the most important skill a business owner can posses. All businesses are built around relationships with people…I don’t care what product, or service your business sells, or what market you operate in, your ability to make connections with people and build relationships are the cornerstone to being successful in the long term.

Do yourself a favor, and make sure you think through each of these questions before you make the leap into business ownership.