Starting a business takes courage. Being successful and staying in business takes even more. You’ll need a combination of hard work, skill, perseverance, and perhaps even luck.
Here are 5 questions to ask yourself before you plunge into business ownership.
1. What type of business owner would I be?
Generally, people who start their own businesses can be grouped into two categories. How you proceed will depend, in large part, on which group you're in:
- Those who know exactly what they want to do. These people are focused and are looking for the opportunity or resources needed to carry out their goals. They’ve likely already developed the skills needed to succeed in their chosen field and are familiar with the industry practices needed to get through the startup phase.
- Those who don't have a definite idea. These people may have developed skills from employment or education, but are not necessarily interested in opening a business in that same field. Those who merely want out of the traditional corporate world must take the extra step of choosing the right small business for them.
2. Do you have the necessary skills?
Evaluate your own skills and judge your readiness to own your own business. Successful small business owners build around their strengths and compensate for their weaknesses. Likewise, do your best to gauge the activities that will make up your business—and don’t overlook the less-enjoyable responsibilities. This is a great place to start if you already know that you want to start your own company.
3. Do you understand the responsibilities of ownership?
Owning a business presents quite a collection of pros and cons—such as the opportunity to earn considerable money but also the downside of big financial risk. You’ll also want to consider the many roles you'll have to play—potentially ranging from boss to mail clerk. Small business owners are often responsible for the entire business, typically including everything from managerial to administrative, sales and financial duties.
4. Have you set your business goals?
Be sure you know what you want from your business (both short- and long-term), and what you’ll need to do to be successful. Consider not only your business goals but also your personal and economic ones. Knowing what you want from your business permeates all of the other decisions you'll have to make. It will affect which business you choose, how you evaluate your chances for success, and how you determine if you have the right skills.
5. Are you ready to change your lifestyle?
Being a business owner will affect your everyday life. The impact is even greater if your business involves working out of your home. The distinction between work time and personal time often blurs. You may experience family or other conflicts over the use of space for business or personal purposes as well as the hours you dedicate to your business. Also, don’t forget that any of the more “secure” aspects of employee life will vanish when you open up your own business. If a problem arises with the business, it's your problem, and it won't go away because you've closed the doors for the day.