Entrepreneurship is one of the most rewarding journeys you can take – but it’s also one of the most difficult. People don’t typically start businesses because it’s easy
. They do it because they want to be their own boss, they like the thought of being able to control their own time, or maybe they have an idea that’s just
that good.
However, with great responsibility comes great risk. Embarking on an entrepreneurial venture can be scary. Do you have enough capital? How great is your idea? Can you support yourself? Are you prepared to put your whole life into this? Before you set out to create your new business, take some time to ask yourself these difficult questions.
1. Am I prepared to fail?
Before you decide to
start selling online, really think through the pros and cons of the entrepreneurial lifestyle and what it truly takes to run your own business. Sure, you don’thave to report to a boss and you can keep whatever hours you like, but you will very likely find yourself working
extremely long hours, making tough business decisions, and struggling financially at the beginning. It takes a very strong backbone to be a business owner. If you don’t have the perseverance to pick yourself back up when you fall, entrepreneurship might not be best for you.
2. Is my idea any good?
It’s a tough question, but it’s one you should face sooner rather than later. There’s a saying in entrepreneurial circles: Fail fast. If your idea isn’t going to bear fruit, you’ll want to know that as soon as possible so you can pivot before you’re out of runway space. Make every effort to clearly identify the target market for your product or idea, and then
ask them if they actually want what you have to sell. Pick up the phone. Set up surveys online. Whatever you need to do to ensure there’s a market for your idea – do it. Find out if what you’re offering is truly valuable to your audience.
3. Can I outdo my competitors?
If you haven’t done a thorough competitive analysis, do so. The most basic steps of a competitive analysis include: defining and understanding your industry, knowing your potential customers, and becoming familiar with your competitors. From there, do your best to determine the key success factors in your industry, then rate your competitors accordingly. Following this, be honest with yourself – what are your competitors potentially going to do to outshine you? The more realistic you are, the harder you can work at differentiating your business in a way that will make it stand out.
4. Have I fully considered all the details of owning an online business?
There’s
a lot of detail work involved before you can sell online, including state and local business licenses to obtain, IRS regulations to follow, and sales and payroll taxes to pay. You can’t just put up a website and wait for the money to roll in. If you haven’t fully considered what goes into the actual startup process, find a mentor, pick up a few books or visit your local Small Business Development Center to make sure you’re prepared for all the nitty-gritty details that will demand your attention.
5. Am I ready for this now?
If you’re thinking of starting a new business, consider whether you have the time to really invest yourself wholeheartedly into the endeavor. If you’re pulled in too many directions between your current day job, family life, hobbies or other obligations, you may be putting your new business at risk.
If you’re leaving your job to start your own business, you’ll probably have the time – but make sure you also have an adequate financial safety net. A simple entrepreneurial trick to determine how much to save for your new business is this: Calculate two years’ worth of business expenses plus two and half years of living expenses. If you have investors, make sure they’re rock-solid. Be prepared for any scenario – including the one where you eat ramen for several months while you get things up and running.
At the end of the day, there’s really nothing quite as satisfying as successfully starting and running your own business. Go into the situation with boy eyes open, ask yourself the hard questions, and you’ll be prepared for anything that comes your way.
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