Have you been dreaming about dropping everything and starting your own company? Ask yourself these five questions before quitting your job and becoming an entrepreneur.
1. Are you prepared for entrepreneurship?
You might have been dreaming about becoming an entrepreneur since you were young, with visions of one day running your own (extremely profitable) lemonade stand. Over time, the role of entrepreneur has been glamorized and glorified, especially with all the stories of young, ambitious individuals becoming millionaires. Everyone loves a good Shark Tank pitch, with ordinary people’s hard work finally paying off. In some ways entrepreneurship is like this: you get to be your own boss and build something from the ground up.
The reality, however, is that most businesses fail and entrepreneurs end up having to go back to their 9-to-5 jobs. And when successful, building that empire does not happen overnight. It takes entrepreneurs years to develop their ideas, often encountering failure before finding success. All this to say that you need to be prepared for the realities of entrepreneurship. It will be very, very hard work. As Lori Greiner, one of the Shark investors, says “entrepreneurs are willing to work 80 hours a week to avoid working 40 hours per week.”
Tip: Take Entrepreneur’s quiz to find out whether you have what it takes to be an entrepreneur. While the answers connected to successful entrepreneurs might be obvious, it does a good job of uncovering the challenges of being a real-life entrepreneur.
2. Is your idea viable?
Billions of ideas are born every day. However, not every idea can be transformed into a business. You need to spend a lot of time researching the viability of your idea. Answer questions like: “Can it be produced effectively?,” “Is there a market for it?” and “Who is my potential competition?” Equally important is to find out whether someone else has tried this in the past, and if so, why they failed.
Some of our customers, for example, are looking for an opportunity to start their own business (and quit their regular job). They are not sure where to start, but know it is important to hit the ground running. Bizness Apps, then, offers them this viable idea: a mobile app business. The mobile app industry is booming, with small businesses now looking to join the game. This puts people in a great position to start their own mobile solutions company. The idea and the execution are already set up, reducing the risk for these entrepreneurs.
Tip: Test your business idea with these thought experiments.
3. Have you talked to others?
If you are thinking about starting your own company, the first thing you should do is talk to other people. Talk to your partner, your friends, your mentor and other entrepreneurs. This will help you to assess whether you are ready to take the risk.
Not only is it good to talk about how entrepreneurship will affect your current lifestyle, it’s also helpful to talk through your business idea with others. Entrepreneurs are often worried about sharing their ideas with too many people. You might be protective of your idea, making sure nobody steals it from you. Nevertheless, it’s better to share ideas than to isolate yourself. As Forbes states, “The simple fact is that many people are too lazy to steal your idea. They won’t likely take the effort to try to recreate your venture.” You will gain valuable insights when collaborating that you wouldn’t otherwise receive.
Tip: There are countless pitch contests that allow you to share your idea with a knowledgeable jury. Entering these contest can provide you with valuable feedback and maybe even win you some seed money. Here’s a list of the best business contests.
4. Do you know how to leverage technology?
Besides using technology to learn about your industry inside and out, you need to educate yourself on how to use technology to make your business successful. In the beginning, you will probably be a one-man show, taking care of everything from marketing to production. It is important to learn this new skillset before you jump in. You will need to know (at least the basics of) social media, paid advertising, data analysis, SEO, web design, blogging etc. If you are not on top of these technological tools, the competition will swallow you.
Tip: For a helpful overview, check out this list of six tech skills entrepreneurs need to succeed.
5. Have you established a personal financial plan?
This question might seem obvious, yet many people brush over this part. Have you educated yourself on managing finances? You need to have a strong grasp on your personal finances, as it could be months (or even years) before you make revenue. Your income will be inconsistent during this time, so your finances need to be prepared for that. One of the most important questions you need to ask yourself is how much money you need to sustain your current lifestyle — or where you need to make cutbacks. Finally, what is your backup plan if you run out of money? If you cannot figure out these answers by yourself, get a financial expert on your side.
Tip: Get started with this article outlining the aspects and benefits of personal financial planning for entrepreneurs.
If you answered “no” to one or some of these questions, don’t despair. You might have to spend some more time researching and planning to make you entrepreneur ready. Now, if you answered “yes” to all five questions, you are clearly ahead of the game. What are you waiting for? It is scary to leave your comfort zone, but leaving it is where the real magic happens. It’s time to take the plunge!