So, You have an Idea for a Business. Do You Have What it Takes?
The freedom and prestige of being a successful business owner is a strong motive for people to start their own business.
Add that you get to set your own hours, be your own boss, and run things the way you see fit, and you can see why over 600,000 new businesses are officially started every year, according to the Small Business Administration's numbers!
But that statistic is also countered by the fact that only 8 out of 10 of those businesses are still operating after 18 months, according to Bloomberg.
So, before you launch your idea, here are 14 questions you should ask yourself.
Questions to ask yourself
1.) Are you a self-starter? Nothing in business happens by itself. As the owner, you’re responsible for everything from establishing your firm’s vision to setting the daily work schedule. It will be entirely up to you to develop projects, organize your time, and follow through on details. The fact that you’re exploring small business ownership and asking questions is a good sign.
2.) Are you a positive thinker? The moment you become a business owner, you represent yourself, your business and your expectations for success. What you say and do must convey confidence and commitment to moving forward. Employees who sense these qualities will share that determination to succeed, even under difficult circumstances. If you work alone, there will be days when you have to be your own cheerleader.
3.) How well do you get along with different personalities? Business owners need to develop working relationships with a variety of people including customers, vendors, staff, bankers and professionals such as lawyers, accountants or consultants. Can you deal with a demanding client, an unreliable vendor or a cranky receptionist if your business interests demand it?
4.) How good are you at making decisions? Small business owners are required to make decisions constantly—often quickly, independently and under pressure. The key here is to understand that failure is OK, as long as you admit that failure and don’t make the same mistake again. Vow to only make new mistakes and to seek affordable business or legal counsel whenever there is doubt.
5.) Do you have the physical and emotional stamina to run a business? Business ownership can be exciting, but it’s also a lot of work. Can you face six or seven 12-hour workdays every week?
6.) How well do you plan and organize? Research indicates that poor planning is responsible for most business failures. Good organization—of financials, inventory, schedules and production—can help you avoid many pitfalls.
7.) Is your drive strong enough? Running a business can wear you down emotionally. Some business owners burn out quickly from having to carry all the responsibility for the success of their business on their own shoulders. Strong motivation will help you survive slowdowns and periods of burnout.
8.) How will the business affect your family? The first few years of business start-up can be hard on family life. It’s important for family members to know what to expect and for you to be able to trust that they will support you during this time. There also may be financial difficulties until the business becomes profitable, which could take months or years. You may have to adjust to a lower standard of living or put family assets at risk in the short-term.
9.) Are you persistent? You will probably not reach your objectives immediately, so you will need to accept the short-term failure and have the will to try, try and try again. It takes between three and six exposures to something before it will sink in or be recognized. Most people will not remember your name until you have told them at least three and preferably six times. The same is true with potential customers remembering your products and services.
10.) Are you disciplined? Your days of the “9-to-5 routine” are over. Running a small business requires a continuous commitment to quality and detail. You cannot afford to cut corners, miss deadlines or make promises beyond your capabilities. If you plan to run the business from home, you must be able to resist temptations and distractions in order to get your work done.
11.) Are you a lifelong learner? Entrepreneurs who continually seek information, new ideas, and sound advice have the best chance for success. Being attuned to market trends and issues makes it easier to adjust products and services to customers’ needs and preferences. You’re also in a better position to enhance your competitive advantage and efficiency, and address potential problems before they harm your business.
12.) Can you market yourself and your business? Some people have trouble with this one because of the negative (and often unfair) connotations associated with being a “salesperson.” No business, no matter how good, will succeed without some kind of marketing. The good news is that promoting your business is easier than you may think as long as you know what to do and how to do it. When you craft and tell your story in the right way, more people will be willing and eager to hear it. Learning customer psychology and how to talk to your audience is critical to your success.
13.) Can you be objective? Your ideas and practices may seem “bulletproof,” but reality may be far different. Is there really a need for your product or service in your area? Are the hours of operation fair to your employees? Is renting equipment better than owning it? A good business owner knows how to examine an issue from many perspectives and understand the strengths and limitations of each.
Comparing your answers to your military experience and performance
14.) Are you financially durable? This is a critical piece to consider. Many entrepreneurs are employed full time and then try to launch their business on the side. Some have part time work and are looking to make some extra money. Still others, like myself, started with very little capital and a lot of prayers. For me it was do or die... but I don't recommend that path. The financial consideration was the least talked about in my business groups, but probably one of the more serious considerations mostly because of underestimating the time it would take to be profitable. In my start-up mind, I thought I could give it serious effort for a year and have something growing, not realizing it could take 3-5 years. Are you prepared to make those financial sacrifices?
Now that you have read through the questions and answered them, it’s time to truly reflect. The military teaches leadership, integrity and many other lessons that correlate to the characteristics of an entrepreneur. But whether you served in the military or not you will want to evaluate what habits, patterns, and disciplines you personally have internalized.
Being completely honest with yourself, read through these questions again and answer them from your past experience and performance. Think about the feedback you received from your supervisors and peers. What was your attitude, when you were put on 12-hour shifts for weeks at a time? How often were you late to work? Did you go that extra mile to do the job right? If you can look back in your military or career history and feel your personality, performance and attitude fit the mold of an entrepreneur, your small business dream is on its way to becoming a reality.
For areas of concern, this by no means excludes you from becoming an entrepreneur. The key is to recognize your shortcomings and fix them. The solution may be business counseling, management courses or a concerted effort to discard some unproductive habits in favor of new ones.
Remember, at the initial stages of entrepreneurship the only one to hold you accountable is you. You’re not going to get those annual evaluations and quarterly feedback reports, so make it a point to conduct regular self-reviews.
Approaches that worked in the start-up phase may not be as appropriate for a thriving concern or if a major market shift occurs. When you work for yourself, you want to be confident the entrepreneur-owner-boss knows exactly what he or she is doing.
Self-Assessment Quiz
If you’re still unsure whether you want to dive down this path, here is an additional resource to help you decide:
Consider taking the SBA’s Small Business Readiness Assessment.
The assessment tool is designed to help you better understand your readiness for starting a small business. It will prompt you with questions and assist you in evaluating skills, characteristics and experience— as they relate to your preparedness for starting a business.
Your responses will be scored automatically and an assessment profile provided, when you click the submit button. You will also receive, based on your score, a statement of suggested next steps, directing you to the most appropriate SBA resources to help improve your business preparedness.
So, do you still want to be an entrepreneur? Before you give a definitive answer, you will want to understand why so many businesses fail which will be covered in upcoming posts.
Some SBA Resources
http://www.sba.gov/sites/default/files/files/rs384.pdf http://www.sba.gov/advocacy/veterans-often-choose-entrepreneurship http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business http://www.score.org/resources/entrepreneur-mindset-skills