Document details Author How do I ... decide if starting a business is right Bizwise for me?
A short guide to help you decide if you're ready to start a business of your own. Publication Date: 05/03/02
How do I … decide if starting a business is right for me?
Context
This briefing assumes that you have a business idea and are considering starting your own company.
Step 1: It won’t be easy
Starting your own business will not be easy. It will be emotionally, physically and financially demanding. It will require real sacrifices. However it can also be fun, liberating and rewarding. But before you get carried away with your own hype, sit down and think very carefully about what you’re actually taking on.
Step 2: Ask yourself searching questions
Answered honestly the questions below will influence your decision to go it alone :o o Why do you really want to set-up your own business? Think very hard about this. Whilst disliking your existing boss or workplace, or wanting to make a lot of money may seem like good reasons, on their own they are not enough. They will not sustain you when the going gets tough. So, what are your real drivers? o How much money can you risk? This can be re-phrased as the “how much can I afford to lose, still live and have time to find another job” question! This is particularly relevant if you need to borrow money to set-up the business. Emotionally you may be prepared, are you financially? o What other responsibilities do you have - partner, children, financial commitments? Can you fulfil these if you either have no money coming in for a period or if it goes wrong? Whether it’s going well or badly you’ll find it hard to switch-off when you have so much at stake. Can your personal relationships stand you working seven days a week if you need to? o How good is your idea really? Who are the customers for it? Why will they buy from you? Don’t get so excited by the opportunity that you overlook the key question of how you intend to make money from it to pay the bills! Would you buy from the business you want to set up? o What will you do if it goes wrong? It is clearly important to dream about success and have high expectations. But, just for a moment, imagine what things could be like if it goes wrong. And then when you’ve reflected make sure that you have an insurance policy, a “get-out-of-jail” card. So, however much you dislike your current boss or workmates, and however much pleasure you may think you’ll get from a dramatic exit, leave elegantly just in case you need to return!
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Sit down and discuss your answers with someone who knows you very well.
Step 3: Know yourself
As many business leaders have pointed out, it can be lonely at the top. As an employee somebody else is ultimately responsible for the success and failure of the business. If you run your own business that somebody is YOU! Do you have the right temperament? For instance draw up a list and profile yourself :o o o o o o o o o o I am self-motivated I am passionate I overcome obstacles I am a good sales person I know how to manage cash
Step 4: Focus on your negatives
Your strengths are important but focus hard on the negatives. If you have identified that you only want to work 9-5, running your own business may not a good idea! Decide if you think the person profiled above can make it. Imagine you are a bank manager, would you lend money to you to set up a company?
Step 5: “Need To Do”
You need to:o o o o o o o o
Honestly asses your motives Identify your strengths and weaknesses Set realistic expectations Be prepared for the commitment, long hours and other pressures
Key Messages
Be objective, realistic and honest about your motivations. Many new businesses fail because the new owner has not identified or fully understood why they’re doing it in the first place or the pressures and work involved in turning their dream into a success. Go in with your eyes wide-open … and good luck!