Starting a small business is a big step for anyone to take. It may require leaving the comfort and security of a regular job for a more uncertain financial future. For others it can be a way out of unemployment and an alternative way to generate income.
If you’re ready to become an entrepreneur, here are seven questions to ask when starting a business.
1. Why do you want to start a business?
To ensure success, it’s important to understand your motivations for starting a business.
Perhaps you want to break out of the nine to five or be your own boss. Maybe you have a passion or entrepreneurial idea that you’d like to explore.
Be honest about your reasons. Whatever they are they must be compelling enough to sustain and motivate you through the good times and the bad.
2. Do you have the necessary skills?
Evaluate your own skills and judge your readiness to own your own business. Successful small business owners build around their strengths and compensate for their weaknesses. Likewise, do your best to gauge the activities that will make up your business — and don’t overlook the less-enjoyable responsibilities.
And remember, going it alone doesn’t have to mean that. Be open to asking for help and delegating tasks. You may want to get started with the help of a business partner, engage a mentor, or a small team of employees. Whatever route you take, your success depends greatly on the people you surround yourself with.
3. Do you understand the responsibilities of ownership?
As a business owner, the success of your venture falls on your shoulders. Be prepared to multi-task. This could mean doing everything from writing a marketing plan, ensuring that your IT infrastructure is operational, setting up payroll, as well as cleaning the premises at the end of the day.
Legal responsibilities must also be addressed, including business registration and compliance with various federal and state and local labor and employment laws.
4. Have you set your business goals?
Business goals are an important part of starting and running a business. They can help you understand where you’re going and what you need to do to get there. Goals are also a useful metric to see if your business is succeeding.
Avoid being vague. Set clear, well-defined, and time-bound goals that help you take control of your business direction and achieve your short- and long-term objectives (think of each goal as a building block to your overarching vision).
Consider both your personal and business goals. It’s all too easy for the business to veer away from your original motivation for starting one. Keeping your personal goals top of mind can help anchor your strategic planning.
To help you get started, refer to goal setting frameworks like SMART goals (Specific, Measurable, Attainable, Relevant, and Time-bound) or OKRs (Objectives and Key Results).
5. Are you prepared to change your way of life?
Being a business owner will affect your everyday life. The impact can be even greater if your business involves working out of your home.
The line between work hours and personal hours frequently becomes unclear. You might encounter conflicts with family or others regarding the utilization of space, as well as the amount of time you dedicate to your business. Also, don’t forget that any of the more “secure” aspects of employee life will vanish when you open your own business. Should an issue arise with the business, it becomes your responsibility to resolve it. It may not be something that can wait until the next business day.
6. How well prepared are you to pivot and adapt?
Market conditions are always changing, and small business owners must be ready to adapt their strategies, products and services, and ways of working.
If you’re not a fan of change or find that pivoting to new ideas is challenging, try to work on those strengths before you become a business owner.
7. What is your business plan?
You can’t start a business without a plan. Preparing a business plan will provide the foundation for your business. This document outlines your business, products, and services as well as how your company will compete, operate, and expand. If you need financing to get started or grow, a lender will typically require a formal business plan.
For more information, check out these resources:
- Writing your business plan
- Creating action plans: Operations and management
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Marketing plan component of your business plan
Summary
Asking these questions can help you determine if starting a business is right for you – and if you’re properly prepared. Entrepreneurship is risky, but with the right planning, support, value proposition, and determination, starting your own business can be immensely rewarding.