Great leaders are both romantic and realistic. They have a grand vision and great goals. They seek to close the gap between what is and what can be, but they have no illusions that success is either inevitable or straightforward. – Michael Josephson
Client Question: After working at one company for ten years, I want to begin my own business. What issues do I need to consider, and how do I know when it is the right time to take the big step?
My Answer: Almost 20 years ago, my roommate asked me to spend a day of my vacation working on a business idea for him. Here are some of the questions we went through to help him start his business correctly.
1.) Do I have a business plan?
A clear business plan is essential, and the lack of a project is a frequent cause of business failure. A business plan helps you assess, in advance, how you are going to address critical issues. I have found planning software extremely helpful. Developing a quality plan may take weeks or even months because your ideas may need a gestation period before fully coming together. Throughout the planning, it is essential to find a source of objective feedback -- ideally, someone who clearly understands the process.
2.) Do I have the energy and physical stamina for the venture?
Owning your own business typically requires long hours, and stamina is essential. You work 12 to 16 hours daily, particularly during the first several years. Be prepared and be honest with yourself. If you do not already have an exercise regimen, begin one now.
3.) Can I get the money I need to support the business and myself?
If your business plan is exciting and enticing, money will be available. Although most banks have little interest in financing a start-up these days, they can help you secure an SBA (Small Business Association) loan. An SBA loan can be valuable, even though it may require repayment before you can raise money elsewhere.
Another approach for financing your business is the family and friend model. Your family dinners and get-togethers can quickly turn into shareholder meetings, particularly when your business is struggling! If you go this route, do not overlook the strings attached.
There are numerous other options. Couples with two incomes may be able to afford the transition of one spouse into business ownership independently. You may be able to fund the business yourself, especially at the outset. Several years ago, I left my freelance production studio and began my new company, executive coaching for entrepreneurs, using money earned from my first venture.
4.) Does my family support this?
It is essential that your family utterly understand the demands of business ownership. There are subtle differences, for example, between working long hours for someone else and working long hours for yourself. "My boss needs this done by tomorrow; I have to miss Johnny's game" becomes "I need to get this done by tomorrow; I have to miss Johnny's game." Before writing your plan, ensure all your stakeholders know the details.
5.) How do I feel about making critical decisions and handling others?
Owning a business requires constant decision-making, often with no time for self-reflection or opinion gathering. Depending on the company, you may become responsible for other people's livelihoods. Their families will count on their incomes, and your decisions and behaviors will significantly influence their lives. You will no longer manage your family alone but for families supported by your business. From experience, I can tell you that this is more stressful than you might imagine!
6.) Am I willing to do things I have no business doing?
Owning a business may force you to learn subjects and perform tasks that have never been your forte. Aside from French, accounting was my worst subject in school. I understand numbers because accounting skills are critical to successful business ownership. Similarly, I quickly learned to repair computers when we could initially not afford a service contract. If you resist doing things you do not know how to do, reflect hard on your decision to start a business.
7.) Is your soul calling you?
I have always admired those who just knew it was their time, as though their souls were calling them. They reached a point when they could no longer work for someone else. Your soul may be calling you. Have you begun arriving to work with your body but not with your mind? Are you working to earn money but dreading every moment of it? These are potential signals that it is your time. Remember, however, your soul does not give a get-out of writing a business plan pass. Remember, your business plan is essential.