Emerging entrepreneurs can be a different breed. They are excited about their business ideas and are driven by their passion… but it may also blind them to some degree. How do people start a business with their eyes wide open and set themselves up for success right from the start?
Passion is essential
First, passion and conviction are essential. You need to know who you are and what you want to do. Then there is the choice of business model and knowing your product or service inside and out. You want to be ready to eat, drink and breathe business ownership… and wake up and do it again the very next day.
Know your market
Even if you have the best business idea and you are confident in your ability to make a product or provide a service and set up a successful business model, the great arbiter of success is the marketplace. Your business concept must be viable, not just to you, but to the people who will be your target market. How do you know your business expectations are not fiction? To get the answer, you must talk to people, survey potential customers or clients, and test your assumptions.
Test your concept
Once you have an idea of the marketplace, you want to test the concept. You can pop up in someone else’s space or test your product or service at a street fair or makers fair. You can get friends to hold events and sell your product in their living rooms. You can convince a friend who has a retail shop to let you set up a trunk show. If all goes well, the experience will make you feel more secure that your business idea is a good one and that you want to own and run a business.
Can you now say YES to these 5 key questions?
- Do I really enjoy being in business?
- Can I attract the customer or client who will appreciate my business and will pay for it?
- Am I good with customers and can I provide excellent service?
- Does my business model make money or will it at least break even “soon”?
- Can I envision myself persevering for the next 12 to 18 months to really establish my business?
Time for planning
Some degree of prior business planning is essential. To help guide you, you can take a class, read a book, or ask an experienced business owner for support. However you do it, the purpose of a plan is to define your business offerings, specify your market, outline the essential management skills needed, and create realistic financial projections with a well-timed series of action steps. Your final plan will be a useful document for potential investors, funders or business partners. But the primary purpose for writing a plan is for the process itself. It forces you to be objective and critical, identifying weaknesses, challenges and opportunities and setting benchmarks to track progress. Ultimately, it will give you confidence to get into and continue with the business.
Take the plunge
So you have made some initial sales, carved out time on weekends to work on the business and you are still excited about doing it. Actually, it is all you can think about. How do you take the plunge from part-time to all-in?
There are many different ways to do it.
- Wait to launch until you have raised enough start -up capital – either through personal savings, bank loans or crowd fundraising.
- Convince your friends and family to lend you money (perhaps with no interest) and agree that you do not have to pay them back for at least three years.
- Approach your employer and negotiate to work only four days a week and use that extra day to work on your business.
- Move from full-time employment to a contractual arrangement so that you can set your own hours and take time off when needed for the business.
- Find an active or silent business partner with capital to invest in the new business and cover business expenses for the first year.
- Marry well and/or use your future inheritance to support your entrepreneurship habit!
- Quit your job and go all in right away, using credit cards to get you through the cash flow negative start-up period.
The path to small business ownership is unique for each entrepreneur. It depends on your tolerance for risk, your access to capital and cash flow, your skills and experience running/managing a similar enterprise, and your support systems.
Time, money and the prospect of failure are common hurdles for almost every small business owner starting out:
- How do I find enough time to devote to my business?
- Do I have enough funds to support myself while the business is developing/evolving in the first 6, 12 or 18 months?
- Can I respond well to short-term failures as I navigate my way to long-term success?
You may struggle to find the right strategy to get your business off the ground but if you have passion for your business idea, some success from product or service testing, solid financial projections, and a strong support network… YOU CAN DO THIS!
Are entrepreneurs crazy? Sometimes yes. But that’s just what may be needed to jump in and swim! Some start in the shallow end of the pool and tip-toe down the stairs. Others lower themselves down the ladder until they are fully immersed but continue to hold onto the edge. And then there are the ones who leap off the diving board straight into the deep end. No matter your approach, just make sure you can see the edge and make your way back to solid ground as needed. But if you really want to swim in the world of small business ownership, you first just have to get into the water!
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