Want to Be an Entrepreneur? Think About This First
You dream of becoming your own boss and starting up a business. It’s an exciting prospect. You’re certain you have a great idea. It’s sure to be a success. You’ll have the freedom of being the one in charge so your time is your own. Whatever you dream of when it comes to owning your own business, hold on a second. Having your own company can be a dream, or a nightmare. You’ll have to consider some factors before you start putting a plan into action.
First up: money. Every company is going to need start-up capital. It can be a couple hundred dollars to millions depending on your business. Unless you’re independently wealthy, you’re going to have to find that money. Maybe you have a nest egg you can dip into but decide whether or not you can live without that money should your business fail (and the fact of the matter is that the failure rate of small businesses is high). Friends and family to banks to, god forbid, credit cards could help fund your start up but that also means you’re instantly in debt to someone. Also a bank will be expecting a solid business plan. Don’t know what a business plan is? Find out and make one. If you’re not inclined to figure out how to do your own, you can hire a business consultant, but that means more money. Oh, and if you thinking about small business loans consider that the term “loan” is part of that phrase.
Next, it’s unlikely you can do it all yourself. Bookkeeping, advertising/marketing, sales, management, and so on. You will probably need to hire an accountant, possibly a lawyer, and other experts. It circles back to the money factor. It also is about your sanity. Trying to do it all will take a lot of time and energy that you may not be able to handle. Plus if you’re not knowledgeable about a certain area, it can be a detriment to your business.
Since I mentioned time and energy, owning your own company will not be a nine to five job, especially as you’re trying to get established. It’s likely you will be putting in a lot of time, losing sleep, and getting little back. Consider those sacrifices as well as those to your family.
Is your idea that good? Think about the competition? What’s going to make you different enough to attract clientele? You need to do market research and develop a marketing plan. You may want to open a pizza shop, but if there’s already 30 in a small city, it’s going to be tough to do something unique that gets customers in the door.
Are you knowledgeable enough? Your idea for a new restaurant is brilliant, but if you’ve never been in the restaurant business, you may need to take on partners that are in the know. Partnerships aren’t always easy, even if that person is a friend or family member. If you aren’t complimenting each other and on the same wavelength about the direction of the business, it can be a constant battle.
Location, location, location. If you’re planning on a brick and mortar site, you have to make sure it’s in the right place. An out of the way retail location may suffer for traffic without a lot of advertising to create a following. A high traffic location can bring in customers but can also be expensive.
You have to be willing to be the “face” of your business. You have to be your own biggest fan, be willing to sell your product/service, and get out there. If you’re not a people person, you’ll have to hire someone who is and is willing to be as dedicated to the company as you are, and those people can be hard to find. Few are as investing in a business at the same level as an owner.
So you’ve decided to avoid the risk of a start-up and buy an existing business instead. Smart move, right? Not necessarily. I’ve personally witnessed what happens when the buyer doesn’t do their due diligence. They ended up purchasing a business that appeared to be successful on the surface but on paper, it was in heavy debt and financed largely by high interest credit cards. Hire an accountant and lawyer at the very least and have them closely examine the business. Also keep in mind that you are not purchasing their success. They may have some customers unhappy with the idea of “new management”. You have to assure those loyal customers that any changes will be to the better and be able to back it up with actions. You are also inheriting a reputation. Make sure that repute is not a poor one.
Lastly, research. Research starting a business, what you need when it comes to the good old government, how much technology you may need, what to expect, and so on. You can’t have too much information or be too prepared.
Have you started a business or are a business owner? What challenges have you had to overcome? Let us know in the comments!