Starting a business is a common dream among many who wish to break from the day to day drudgery of office work. If you’ve reached a point in life where you’re interested in taking a chance on your entrepreneurial aspirations, there are many potential problems and benefits to consider. These five questions should be at the front of your mind before you quit your day job.
Are You Financially Prepared?
No matter how lucrative your business may eventually be, it will start out slow. Those early months or years with little cash flow can make things tough, and they often spell the end of many businesses. Assess your financial position and make sure you have enough reserves to sustain you until the business can take over. Finding interested investors or taking out a loan can be a great place to start, but even that requires some financial stability.
What Skills Do You Have?
This question may seem unnecessary, but many people attempt to start a business without considering their strengths and weaknesses. Some have the ability to provide a product or service very effectively but lack the management skill to run the business. For others, the opposite is true. Examine your skills and find partners and collaborators who might be able to help with your weaknesses.
Is There a Market?
Before any business can succeed, there must be a place for it in the market. When there is too much competition, even the best products will get lost in the flood. Many entrepreneurs start by identifying an unmet need in the market instead of trying to force their goods into a crowded sector. This approach can be very effective in avoiding competition. In addition to considering your skill set, contemplate how that skill set fits into the market.
Will It Suit Your Lifestyle?
Owning a business takes a lot of time. Evenings, weekends, and holidays are often consumed by the job, especially before the company is large enough to hire additional management. A good business for women may have enough flexibility to tolerate the demands of child care, while other options may work for older adults who may have aging parents. Time is part of your starting investment and must be factored in as part of the cost.
Can You Tolerate Risk?
No matter how good your product is or how hard you work, starting a business is a challenge. Many great businesses fail every year, leaving the owners’ dreams in ruins. If you can’t stomach the possibility that your dream won’t come true, you may not be cut out for entrepreneurship. Even if you don’t fear that risk, you still need a backup plan to keep you going if your business shutters.
Starting a business can be a powerful way to make money and assert your independence, but you should examine the opportunity carefully. A careful review of these questions will help you make the right choice.