For many years following the end of the Great Depression, large numbers of workers tended to start and end their careers with the same employer. Beginning in the 1970s, however, employee loyalty began to wane, and by the 1990s, few people expected to remain with an employer for more than five years or so. The reasons
1. How Will You Fund Your Business?
Virtually every business will require you to invest some money. You may need to purchase equipment, pay for advertising, purchase inventory, pay for hosting, hire employees, purchase raw materials or lease space. Do you plan to use your savings to cover your business expenses, or do you plan to start small and pay expenses with your disposable income from your current job? Will you accept investors? If you are planning to fund your business with your credit cards, you might want to postpone launching a business. Should the business fail, you could be making payments for a very long time.
2. How Much Time Can You Realistically Devote to Your Business?
Most entrepreneurs have demands on their time that are not related to their new business. You may be attending college, holding down a full-time job, caring for aging parents, maintaining an active social life, taking care of your children, performing volunteer work, or dealing with your own health issues. It may be true that you can do anything, but you likely cannot do everything. Many people starting a business believe that they can work 40 hours a week for an employer, devote 40 hours a week to their fledgling business, and still have plenty of time to spend with their families and friends. This may work for a few weeks, but if you try it for a longer period, you risk burning out from stress or lack of sleep. Be realistic about how much time you can actually devote to your business before you create a business plan or timeline.
3. How Do Your Family Members Feel About You Launching a Business?
Some entrepreneurs are unencumbered, but most have spouses or significant others, and many of them also have children at home. If your startup is going to affect your loved ones, you should endeavor to win their support. They may not be comfortable with the money you plan to spend, for example, or they be concerned that you will have less time to spend with them. Therefore, it is important to have several frank discussions before you invest. Otherwise, you could find yourself facing resentment and/or sabotage, including frequent interruptions when you are trying to work, family members who subconsciously forget to give you messages from customers, or troubling behavior by your spouse or children.
4. Why Do You Want to Start Your Own Business?
If you just feel unappreciated or overworked in your current job, you may want to prove something to your employer. You may feel envious of a friend or relative who owns a successful business. Neither of these motivations will typically guarantee your success. On the other hand, if you feel that you have a better way of doing something or can build an innovative product, you are more likely to succeed.
5. What Solution Does Your Idea Offer?
Whether your idea is for a service or a product, it should offer a solution to a customer’s problem. The solution may be geared toward people who want to make their homes more attractive, carve out more time for themselves, find an appropriate gift, or learn a craft. Businesses may be looking for solutions to employee turnover, outdated accounting software, cumbersome maintenance procedures, or quality control. You need to identify the problem or problems that your idea will solve. For example, your product might help individuals alleviate stress or feel more attractive, or it might help businesses enhance workplace ambience or improve productivity. Your service might free individuals from unpleasant chores, or it might streamline a company’s onboarding process. The problem does not need to be a major one; Gary Dahl became an overnight millionaire by marketing rocks as pets that would never need feeding, grooming or any other care. His products provided a solution for those looking for a unique or whimsical gift as well as parents seeking an amusing way to comply with a child’s request for a pet.
6. What Are Your Skills?
You need to be realistic about your skills. Obviously, if you have no sewing experience, for example, you probably should not start a tailoring business. However, there are other personal skills you need to evaluate. Are you comfortable making sales presentations? Do you understand the basic principles of accounting? Can you craft a professional letter or email? Do you know how to pack items and select the best carrier? What are your talents? What do you see as shortcomings in your personality? Starting a business and nurturing it through its growing pains will require stamina, the ability to motivate employees, a willingness to embrace ongoing learning, and the ability to make the right adjustments at the right times.
7. What Will It Cost to Start Your Business?
Many entrepreneurs underestimate how much it will actually cost to start a business. The main reason that their estimates fall short is that they fail to include all of the expenses that may be required. For example, depending on your location, you may have to obtain a business license. If you have employees, you may need to obtain workers’ compensation insurance. If you have no bookkeeping experience, you may need to hire an accounting service. Zoning codes may prohibit running your business from your home, forcing you to lease a office or get a virtual business address. You may also need to register to collect and submit sales tax, remit quarterly payroll taxes, pay to copyright intellectual property, build a prototype to apply for a patent, or encounter other expenses that you may not have considered.
8. Who Are Your Competitors?
The market can support just so many businesses offering similar products or services. If the market is already crowded, you will need to determine whether what you plan to offer will be significantly better and/or substantially cheaper than what your competitors are offering. For example, suppose your idea is to produce and sell handmade knife sheaths. A quick search will reveal that there are dozens of individuals and companies selling similar items. What will entice people to buy your sheaths instead of theirs? If you cannot formulate a logical reason, it may be difficult for you to make numerous sales at an acceptable profit.
9. Who Are Your Customers?
Whether your potential customers are businesses or individuals, they will have different needs, desires and budgets. Your product or service must align as closely as possible with at least two of these elements. For example, individuals who are living paycheck to paycheck may desire custom gold jewelry, but they may not be able to afford it. A large corporation might have the budget for a new software that only handles payroll, but they likely have no need for it.
Starting a new business is not something that should be done on impulse. Instead, you should evaluate every aspect, including costs, your level of commitment and the marketability of your idea. However, if you are still passionate about your idea after conducting your due diligence, keep in mind that there are ways to overcome many obstacles that you may have found. For example, you can hire employees with the skills that you lack or take classes to gain those skills. There are even ways to be successful in a saturated market. Just be sure to evaluate everything with an open mind, and do not allow your emotions to take total control.
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