Friday, 2 May 2008

5 Things to Consider Before Starting Your Own Business

Have you ever felt like starting your own business? Do you want to be your own boss? Want to get away from the day-to-day monotony of your current job and be in control of your own life? Well, if you do, there is only person who can make the difference between your new business being successful and being a disaster – you!

Before you begin your new life running a business, consider the following questions. If you can answer the questions honestly, you should be in a good position to start up a business.

Are you starting a new business or running away from something?

Don’t expect running a business to solve too many issues for you. Starting your own business may not turn out to be a route to a magically fulfilling life.
For example, did you decide to set up a business while on holiday? Many people think about changing their lives while on holiday, especially when faced with returning home and getting back into their normal work routine. Be sure that you are considering starting a business for the right reasons. Television shows many programmes about people who sold up and moved to a new life running their own business. To me, unless these people have already retired from work, they often seem to regret the move.

Be honest about the amount of effort involved

If you work in a company and things go badly or run late, you can always fall back on your colleagues or your boss to help. When you run your own business you will have to rely on yourself. This may mean working late at night and at weekends. If you work from home you may find it difficult to switch out of work mode if your office is just across the hallway. In the early days, while getting the business up and running, you may be working long hours and seeing little profit. Are you the kind of person who has the discipline and self-motivation to carry on?

Will you make a living from your business?

Most people will need to make a living from their business. Have you written a business plan and worked out exactly how much profit your chosen business will realistically make? Don’t start your assessment by thinking how much money you need to earn each month to pay the bills. If you do this you may end up “adjusting” profit figures to meet your needs.

Be honest about the likely profits. Do research. Get someone independent, in a similar business if possible, to talk through the likely costs and income. Work out your likely profit or losses in the months after you start your business. How long will it take you to make a living? How will you afford to live before the business is making a living wage?

Will you over commit yourself or your family?

When you start your own business it is likely you will end up working more hours than you did working for someone else. At the end of the day, the only person you can rely on to get the job done is you.

Consider the effect this will have on your partner or children. If you have very young children, will they understand why you can’t spend as much time with them? Will your partner understand?

Will you expect your partner, husband or wife, to help out when things get tough? Is this fair? Will they end up feeling pressured even when they have their own work commitments? Be honest with each other and discuss the possibilities before starting your business.

How many roles will you play?

If you work for a company, it’s likely – even though you may not think so – that you do only one job. When you work for yourself you will probably need to do many jobs. If you are setting up a one man business think: Who will do the marketing and advertising? Who will fulfil customer orders, e.g. by packing and posting goods? Who will deal with customer queries and complaints? All these roles require different skills. If you don’t have any experience in these areas, get training or advice and be prepared to learn quickly on the job.

Conclusion

I hope you find this list useful. The list isn’t meant to put you off starting your own business. Rather it is meant to help you make sure you are being honest with yourself about your expectations and the possible pitfalls in working for yourself. If you plan up front, running your own business can be a rewarding and satisfactory venture.

2 comments:

Mel Eldridge said...

Interesting post. I want to run a business soon, so I'll keep this post in mind. Becoming, what I hope, an entrepreneur is somewhat new to me, so I can use all the help and advice I can get! I know it'll be tough. Lately I've been thinking about the idea of buying a business instead of starting from scratch. I'm not sure what I should go for. Franchise? Home-based? I don't know. Do you have any suggestions or advice? Thanks!

Rebecca Smeyer said...

@Mel -- There are plenty of places that you can check out for help and advice. If you're seriously considering to buy a business, then there are sites like BizTrader.com, which is like this online global marketplace where you can buy and sell a business. You can also use it to find a lender or broker, or invest in a business. If anything, it'd be a good way to know what's available in your area.

That being said, the same goes with small business groups in your area. They can be very helpful, especially with knowing the ins and outs of your area.

Good luck!