I've had a number of interesting conversations with business owners and potential business owners recently. In the one case, the business owner was expressing some of his frustrations and challenges. I doubt he will be in business in the next six months. He didn't go into business prepared for the level of commitment and sacrifice that a business can demand.
The second conversation was with a potential new start-up. This entrepreneur wanted to know everything he should know to be in business. Of course, in a couple hours of talking, I couldn't tell him everything, but I was able to give him a snapshot version of what being a business owner will entail. He started his business about a month ago. Now, time will tell if he has the juice to be in business for himself, or not. I hope he makes it.
Many people would love to be self-employed, but the fear of not having a guaranteed paycheck can be debilitating. It can keep them from attempting self-employment. I have some advice and a few things to think about for those who like to start the self-employment process. It's doable, but potential business owners should really think things through and count the costs.
- Think about what you would like to do as a self-employed worker. Is it something you can do in increments? Can you work into it over time?
- What value would you bring to society that isn't being met today? Or if you are replicating a service or business, how will you better serve clients beyond your competition. I remember when IBM was the computer to emulate. Has anyone seen an IBM computer lately. The competitors got better and better until the IBM standard was a distant memory.
- Is your business idea one that you can enter into with little to no overhead? A carpenter may already have all the tools he needs to build houses. An accountant may have a calculator, computer and space to do record-keeping and taxes. Does your business require upfront expenses that make going into business prohibitive for you? Is there another way to start? Would bringing an investor on-board be an option?
- Does the community really need your business? I recently had a potential business client call to rent a commercial space I have listed. She wanted to open a second-hand store. I asked if the monthly income would accommodate the rent, utilities, insurance and salaries. She didn't think so. I also reminded her that there are numerous second-hand stores within a mile of the location. She soon realized that she couldn't make enough money to open the business and pay the expenses in that location. She had the right idea, but she may have had the wrong business, or maybe just the wrong location. Profit margins in some businesses are just too low to make it work in a highly competitive environment.
- Is your family in agreement with your business idea? When a family resource provider goes into business, he/she needs to understand that those who depend on him/her also go into business. Can you sustain the family comfortably while launching a business? Is the family willing to scale back to help things get off the ground? You may not have to, but it's good to know everyone is ready to make those kind of sacrifices if necessary.
- What's the back-up plan if things get rough? I appreciate those who have a sink or swim attitude when they go into business. It takes that level of dedication, but what if it things don't take off as quickly as you hoped? What if there is no income for 6 months or a year? What's your back-up plan? How long can you survive in that mode before calamity strikes. It might be wise to save up those kinds of resources long before you launch, but if you haven't, have a back-up plan. For instance, get a part-time job, sell unnecessary items, cancel services, etc.
There are so many more things to think about before going into business. None of these things above should scare you off, but you've got to be prepared for any and all obstacles. Starting a business is exhilarating, but it can also be exhausting. Be prepared to do it all for a season, and realize that the buck does stop with you. Your success or failure really can boil down to how well you're prepared and how willing you are to tough it out until the business is flying.