To succeed, entrepreneurs need to temper their enthusiasm with common sense.
“Although starting a business isn’t easier than a traditional job, business owners usually have more discretion and control over their schedule and career trajectory.”
New business owners must be prepared to work harder than they’ve ever worked. As an entrepreneur, you’ll need passion, flexibility and self-confidence.
“Promising new business ideas emerge from three sources: changing environmental trends, unsolved problems and gaps in the marketplace.”
Before you begin, define your motives, assess your business idea, calculate your budget, consult your family and consider the adjustments you’ll need to make.
“It’s not good enough to simply ‘think’ you have a viable business idea. You need to write a business plan.”
Don’t hand in your resignation at the office until you give these questions serious consideration:
- What’s your genuine motive? – If your reason for quitting your job is that you hate your boss or got passed over for a promotion, you may not have sufficient motivation to start a new company. You must be driven.
- Will this idea really work? – Write a solid business plan and solicit feedback from experienced businesspeople. Don’t proceed without proper research.
- Do you have enough money? – You can’t start a business on a shoestring. You need to have financing in place and enough cash to support your family during the first few months. Be prepared to struggle.
- Can you handle the adjustment? – New business owners typically work very long hours, so you’ll have less time for socializing and personal pursuits. You may miss the camaraderie of the workplace more than you anticipated.
- Is it full time or bust? – Starting your business part time is best, though not always feasible. Ideally, you’ll launch your firm while you still have the security of your job.
- What does your family think? – If your income supports a household, your decisions have far-reaching implications, especially if you have children. Tackling a new venture without discussing it fully with your family is unfair. You need their support.
Before going any further, ask yourself honestly if you have these three critical qualities:
- Unbridled “passion” – You need enthusiasm, drive and a complete belief that you will succeed to empower you as you navigate the stormy seas of entrepreneurship. You’ll experience tough odds, exhilarating highs and humbling lows.
- “Tolerance for ambiguity” – As your new business evolves, you will face seemingly similar situations that may require different solutions and a flexible attitude. For example, what do you do if a new customer suddenly wants your restaurant to serve a dinner for 30 people? You should be able to deal calmly with such circumstances, even though the situation is inconvenient and potentially disruptive, and come up with good solutions.
- “Self-efficacy” – You must believe in yourself. Millions of people fantasize about starting businesses, but only a few trust, deep down inside, that they have the ability to succeed. Bolster your confidence by spending time with other entrepreneurs. You’ll get good advice and you’ll discover that you’re just as bright and competent as they are.
You don’t need a new business idea. Franchising and direct sales are viable alternatives.
“Select an idea that you can sell into a niche market.”
“New businesses started by a team have an advantage over those started by an individual.”
You do need a sensible, written business plan and a targeted marketing strategy.
“A new business must address this critical question: Who are our customers, and how will we appeal to them?
Early decisions include selecting your firm’s name, location and ownership structure.
“A company’s name is the most critical aspect of its branding strategy.”
“A brand is a handshake between a company and its customers.”
Carefully study the legal licensing requirements in your location.
“Never sign a lease and occupy a property until you’re confident it’s zoned for your type of business.”
You can fund your company with savings, loans, grants or investors’ cash. Try to cover at least six months of living expenses before you begin.
“A business’s marketing efforts should be consistent with its overall mission and values.”
“Difficulty in finding qualified employees is a barrier to growth for many new businesses.”
Seek guidance from fellow professionals and hire the right people.
“Many successful business owners, looking back, feel that having limited funds forced them to focus, become self-reliant and develop a mindset of frugality.”
Don’t let your business eat you. Make time for yourself, your family and your friends.
“Many business owners suffer because they don’t place boundaries on their business life.”
Professor of management at the University of Central Florida, wrote Preparing Effective Business Plans, and is the co-author of Entrepreneurship and What’s Stopping You?
Bruce R. Barringer, a renowned expert on entrepreneurship, is a professor of management at the University of Central Florida. His books include Entrepreneurship: Successfully Launching New Ventures, 2nd Edition, Preparing Effective Business Plans: An Entrepreneurial Approach, and What's Stopping You?: Shatter the 9 Most Common Myths Keeping You from Starting Your Own Business.