This week I prepared a live video that I shared with my private group on the topic, "are you ready to be an entrepreneur?" I get a lot of questions from clients asking how and when is the appropriate time to start a business. I thought I would continue that track on this blog. I hope that you find the information shared helpful in guiding you to a decision that is right for you and your family. One thing to keep in mind as you start this journey is that it isn't just you that will be starting this business but your entire family. Your family will be impacted in one way or another, which we will lay out below, so having their buy in is going to be critical to your success.
The Bureau of Labor Statistics reports that on average 20% of new businesses will fail during the first two years of being open, and 45% during the first five years. Stop for just a moment and consider what I just said. 45% of all small businesses, will close within the first five years of business. That is almost half of all the businesses opened, will fail. Only 25% of new businesses make it to 15 years and more. Again, stop and really think about that information. I want you to evaluate how that makes you feel when you hear those stats. The first time I heard them, I must admit there was a part of me that said, maybe I should just be happy where I am doing what I do. Are you feeling a bit uncertain or concerned? This is a reality that most people don't think about prior to starting a business. They go into ill informed, not realizing this information or if they do know, they don't ever think it will happen to them. I would love to change the statistics, and make sure this doesn't happen to anyone ever again. I want everyone to be prepared so that we make a shift in the numbers and realize what they are today doesn't mean that is what they need to be in the future.
How can you make sure this doesn't happen to you? I think of business like a marriage. Okay indulge me for a moment as I explain this position a bit more. Being a coach and pastor, I find that most couples prepare for the wedding but lack preparation for the marriage. In fact, the marriage is an afterthought instead of forethought. If couples would spend the same amount of time or more preparing for the marriage than the wedding, we would have more successful marriages, and less of a divorce rate. Now I'm not saying everyone falls into this category, but most couples are infatuated with the wedding and not actually being married. So, I'm sure you can see how I relate this to business. A lot of people go into entrepreneurship with little to no information and plan a big launch or grand opening but haven't taken the time necessary to prepare for the long-term business. If entrepreneurs prepare properly for the long-term sustainability of the business and not the short-term satisfaction of being a business owner, then we should see the numbers shift in a positive way.
My hope with this blog is to address some of the most common ways to ensure you're ready to be an entrepreneur. I want to make sure that you are building on a solid foundation, so that when the time comes, and your business hits a rough spot you can pivot and stand because you know the foundation will hold even if other things crumble. We shouldn't be afraid of building, rebuilding, making changes and pivoting. This is all part of being an entrepreneur, but your foundation must be solid. There are numerous things to consider before jumping into becoming a business owner. I have found that a lot of people have the desire and drive but no direction. Without a roadmap, you will just be driving around without focus, and direction. To continue to be successful, you have to continually have a direction you are going in and this is one thing that most small business owners miss. As you read through the 10 questions, I will be asking you to evaluate if you are ready, don't feel defeated if you answer no. That just means there is an opportunity for you to grow and learn.
1. Why do you want to be an entrepreneur? Sit with this question for a moment. I don't want you to answer too quickly. I want you to really consider why are you wanting to do this? Why… why… why… If you do any of my business workshops this is something you will hear over and over. Why? It seems so simple but there are two purposes for this question.
a. I want to evaluate if you are doing this for the right reasons, your motive behind your decision. If you merely want to quit your job so you can be your own boss, because you are tired of a 9-5, I will caution you against it. If you are tired of people telling you what to do, how to do it, when to do it, you need to think about the responsibilities beyond just the tasks you want to do. There are going to be a lot of things that you need to consider before just jumping into owning your own business. Being a business owner doesn't mean vacations, and yachts. Most of the time, small businesses will not make multi millions initially, so you must be willing to work hard and long hours.
b. That you can identify why this is so important so when the challenges come, and they will come, you can remember WHY you started this in the first place. Your purpose in doing this is going to be the thing that you go back to when you feel like giving up. So, write it down and read it often. There's more to the "why" thing, but that is for a later time and marketing class.
2. Are you willing to continue to learn? Being an entrepreneur is about continually learning new things. For instance, do you have a basic understanding of business? Maybe you have a business background, which is great but you may need more help with marketing. There is always something to learn as you start to operate your business. It's going to be important for you to be willing to learn about things that may not interest you so that your business can be strong. Learning is key to success.
3. Are you confident? Being confident will help you to be successful. I know you may be thinking confidence isn't all it takes, and you're right however if you are not confident in a particular area, you need to make sure you are learning and surrounding yourself with the right people. The more confident you are in your product or service the more others will feel secure in what you are offering.
4. Would you consider yourself a visionary? This is an area that is very easy for me. I can take an idea and create an enormous dream out of it, which is great for entrepreneurs. You must continually see more and more for your business, or it will never grow. I do this example in one of my workshops, I want you think about where your business will be in 1 year, 3 years, and 5 years. By doing this you are taking time to intentionally build out a vision that you can grow into. Once you hit the milestones, it is time to dream bigger. Don't stop envisioning something bigger and better so your business will continually evolve.
5. Are you determined? Being determined means you won't give up in the face of adversity. Trust me you will have challenges. You will want from time to time to give up, but your determination will not allow it. You will have long work hours; you will need to do the stuff that no one else will. You must have the drive to be a self-starter.
6. Are you passionate about your Idea? Most entrepreneurs are not driven by money but by passion. You must be passionate about what you are doing, what you are selling. Do you believe in it? Do you want to impact people through your product or service? Passion will keep you motivated through the rough times (this goes back to your "why")
7. What does your support system look like? Have you heard the saying show me your friends and I'll tell you who you are? Well, support is important when you are starting a business. You will want people around you that can help you where you have deficiencies. You will also need people around to encourage and give you counsel through the process. Don't be afraid to ask questions and ask for help.
8. Are you financially stable? Sorry but I must ask. Finances are going to be a huge component of starting a business. You need to understand what the impact will be to your personal finances. You need to be secure in what you can do as far as business loans if necessary. You need to not only have a business plan but a financial plan as well. How you fund your business is important.
9. Have you conducted a market analysis? Most of the time, people do this as they are building out their business plan and it's so important. You need to ensure that what your product or service your selling is needed in the area you want to open in. Research shows that one of the biggest reasons a business fails is because there isn't a market need for what you're selling.
10. Are you a risk taker? Being a risk taker is essential in starting a business. You must take a leap of faith, even when it doesn't produce reward immediately. You must be willing to embrace risk. There is a difference between being a risk taker and taking calculated risks. When it comes to business you have to understand and assess the potential outcomes. You need to weigh the risk and determine if it is the right risk for the company. You can't be paralyzed by fear because you will not be able to grow.
As I mentioned before, if you have answered no or not yet to any of the questions above it is a great opportunity to learn and grow so that your business, will be solid. One key item that we can't forget is a business plan. Creating a business plan and understanding the different components is essential to any business. You will need this documentation to get funding or find supporters. So, don't take the process lightly. It isn't all about finding your name, and branding, it is about careful consideration on all sides. I have a free business plan worksheet to help get you started. This is a simple plan, that can be built out and developed over time. This will guide you through the process, so that it is less intimidating. I also will be facilitating my Business Essentials Bootcamp. This fall we are doing something different than before, and I’m so excited about it. I will be doing a five-day boot camp to prepare you for your journey. If you're interested in having someone partner with you on this journey, I would love to guide you through the process, and empower you to be the best entrepreneur you can be!