Is this you? You’ve been complaining about your boss for a while, and you’re convinced that if you started your own business, you could do it so much better than he could. While this may be true, it may not be enough impetus to start a business and run it successfully.
Many people dream of starting a business, but the truth is: not everyone’s cut out for it. Here’s a checklist of questions to answer to determine whether you’re a good fit for entrepreneurship.
- What’s Your Motivation for Starting a Business?
If you simply want to get away from a bad job or want to not have a boss, you won’t really be set up for all the pitfalls and stresses that small business ownership includes. On the other hand, if you want to do what you love or help people in a particular area, these are solid enough motivators to see you through the rocky parts of your path.
- Do You Have Experience in the Field?
While you don’t have to be a 5-star chef to open a bakery, you should have at least some experience in this area if you want to start a successful business. If you don’t, you’ll have a steeper learning curve, and it will take you a lot longer to get to where other more experienced business owners have gotten.
Likewise, you don’t have to have a MBA, but you should have at least some understanding of the varying aspects of running a business, including finance, marketing, and management. Consider taking some continuing education courses to ramp up if you’re determined, but lacking in any of these areas.
- Are You Financially in a Good Place?
There are options for financing a business beyond what you’ve got in your savings account, but if your personal finances are rocky, or if you’ll rely on your revenues to pay your mortgage, hesitate before launching. You should have 6-12 months’ worth of funds to cover personal and business expenses in your account before you start a business, otherwise you’ll be stressing out to turn enough profit to pay your bills.
- Are There Life Events on the Horizon?
Sure, it’s doable to start a business at the same time that you’re welcoming a new baby into your family, or getting married or moving, but it’s not advisable. Life events like these take a great deal of energy, time, and money, and those are going to compete with what you need to put into your fledgling business.
- Can You See it Long Term?
Maybe you just think you’ve got a great solution to a problem. But maybe you don’t honestly want to run a business in perpetuity. In that case, you could sit back and wait for someone else to solve that problem, or even patent your idea and sell it to someone who has more resources and drive than you.
You should be able to imagine running your business for the foreseeable future. It’s good to have an exit strategy in mind, such as selling the company, handing it over to your kids, or just retiring, but you should be able to commit to the idea.
- Can You Handle Risk?
Running a business isn’t for the risk-averse. Entrepreneurship is a landmine fraught with risk, so be ready to deal with it. If you stress out easily, you may jeopardize your health worrying about everything that can go wrong.
The purpose of these questions is to get you thinking honestly about whether you’re cut out for entrepreneurship. It’s a big undertaking, and one that will affect not only you, but your loved ones. Make sure it’s the right decision before you leap.