Preparing Yourself for Running a Business
The desire to own a business is one shared by many people, but far too many of those people end up failing in their enterprises. While it's true that some of them just didn't have a viable idea, others failed when they could have done quite well. The difference between these two outcomes is often in preparation.
Before you invest the first dollar or quit your day job, you should do a good inventory of your skills, attitudes, and interests. Taking stock of yourself is far more important than the particular enterprise you choose because even great ideas fail from poor management.
Be honest, be thorough, and think about these characteristics. Do you have them? Can you sustain them? If the answer is yes, owning a business could be a good option for you, and it might be time to start exploring small business opportunities.
Will You Put in the Time?
Nobody starts a business with the expectation of working fewer hours, at least not in the beginning. You must expect to put in incredibly long work days and work weeks, often with no vacations and few holidays. This is a major distinction from working for someone else, and it can be a rude awakening for people who are accustomed to 8-hour days and generous vacations.
Before you commit to a business, be sure you understand the lifestyle ramifications of being deeply involved in it, and make sure that you are comfortable with that reality.
What's Your Cruising Altitude?
Everyone understands there's a takeoff and a landing in a plane, but there's also a cruising altitude in between. When you start a business, it's no different. You should have a plan for what you expect to do during the main years of its operation.
Are you interested in working the same way in Year 12 that you did in Years 1 and 2? Do you want to take on a partner and begin transferring daily operations over to that person? What about diversifying your products and services? Do you want to expand into new markets that will build value?
Many of these questions will be answered naturally as time progresses, but you should have some sort of big picture idea of what you want to do between your entrance and exit.
What's Your Exit Strategy?
It may seem counterintuitive to think about how you're going to quit your business before you even start it, but it is an important part of the equation. If you take a job, you should understand how your retirement will work, and it's no different when you own the business yourself.
Is your plan to work until social security age and then sell out? Do you want to make a transition to your kids or a sibling? Or do you want to build it into something quickly and then sell it off to explore other opportunities? Many people do this. They're called serial entrepreneurs, and they cash in on each successive business to start the next one. At some point, they have enough money to quit working.
This is a uniquely individual question that only you can answer. What you choose to do in your business could be totally different from someone with an identical business. Remember that you became an entrepreneur partly to have control of your life, so you should plan on a strategy that gives you the results that you want, regardless of what someone else might choose.
Operating a business is a great way to make a living. You have the freedom to do things the way you want to, to spend your working years on things that you love, and to choose what your future looks like. But none of those benefits will come to you if you haven't already made plans for them. It is essential that you commit some serious time and thought to plan out how you want to start, sustain, and exit your business. After all, if you don't know where you want to go, you'll never get there.