Have you considered quitting your daily job in favor of starting a business? Have you just lost your job and are you currently exploring alternative ways of earning a living? Have you ever dreamed of having your own business one day?
Before taking the leap of faith into self-employment, consider these 5 steps:
1. Clarify Your Goals / Passions – Deciding to become a business owner is not enough. There are several questions and things to consider before moving forward to become a business owner. You will need to think about what type of business you want to run. You’ll need to determine if you want to grow from scratch, buy an existing business, or buy an available franchise. But even before deciding that, you need to think about how the business will fit in with the rest of your life. Running a business can be a huge commitment of time and money. So ask yourself what you like to do or what will bring you joy. You will spend much of your day in your business, so it is a good idea for the business to provide the work that you really enjoy doing. Ask yourself what you’re most passionate about. What would you like to do? What is the job / business of your dreams?
2. Do your research / homework – don’t make rash or impulsive decisions and quit your daily job until you are absolutely sure of what you want to do and have a plan to do it. Take the time to do good research researching the industry, the market, your potential target customers, your competitors. Conduct a proper business investigation that includes a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats). Gain good control over projected revenue and realistic operating costs, as well as how long it will take to break even and generate more revenue than expense. Identify your personal strengths and abilities and determine if there are skill gaps. Determine how you will close skill gaps or lack of experience. What gaps can be closed through skills training? What gaps can be closed by recruiting the right people? What gaps can be closed through coaching or mentoring? Determine what options and opportunities are available to you right now?
3. Learn from others’ mistakes – who have gone before you Learn what you can about what works, what does not work and the mistakes that others have made. Don’t waste valuable time and money. Be open to hearing others’ perspectives on what they would have done differently. Hindsight is always 20/20.
4. Business Plan Ahead – Get the job done and develop a business plan. While it can be a lot of work, it will be time well spent and most financial institutions will require one if you are looking for financing. The business planning process is not only to demonstrate to the bank that your business will be successful, it is also a roadmap that you must follow to ensure success. Managing your business finances can be like managing your weekly, monthly, or annual personal budget, so if you haven’t developed good financial and budgetary management skills, it can be particularly challenging and doubly important to have a solid business plan.
5. Hiring a Mentor – Starting and running a business can be challenging or even lonely at times. In addition to the day-to-day operations of the business, you can be mentally or emotionally overwhelmed by owning a business. Having a safe place to go for advice, guidance and responsibility or just as a sounding board may be just what you need to help you make the transition to entrepreneurship easier and smoother. Good training and mentoring can really help you speed up your transition.
While being an entrepreneur has many advantages, it’s important that you also consider the disadvantages of self-employment. Become a business owner armed with as much information, skills and tools as you can to ensure a successful transition from employee to entrepreneur.