It’s not enough to use your dislike of your job, boss, or career path as your primary reason for starting your own business. Your desire to become a business owner must come from a source other than hating your job situation – you must have a passionate reason for wanting to be your own boss.
If you don’t have a compelling reason, the stomach to endure hardship, or the flexibility to adapt to changes, or the capital, you’ll never be able to manage the risks and responsibilities of running a business.
Here are several ways to tell if you’re ready or not to start your own business:
You’re Not Ready…
Before you end up making a decision that you’ll regret both personally and financially, make an effort to understand the real motivations behind your decision. If your decision comes from anger, dislike, or boredom, chances are good that your business will be among the majority that doesn’t make it past the 2-year mark.
You’re not ready to start your own business if your only motivation is any of the following:
- Because You Hate Your Job: If you hate your job, you can just find another job and quit. But once you make the jump from employee to business owner, you no longer have that option. You’re stuck with your new “job,” with no other choice but to dedicate yourself fully to it – even if you hate it.
- Because You Want to Make More Money: If you think being a business owner entitles you to better pay than you’re receiving now, you need a reality check. Many business owners will tell you that they didn’t take a salary for months, even years! You’ll also lose all the money you invested in your business if it fails.
- Because You Think It’s Easy: Business owners are responsible for making decisions on everything from business strategy, finance, human resources, customer relations, and sales. The business owner is like the coach of a football team, when it does well, part of its success comes from the coach’s strategy – but when it doesn’t do well the coach takes the blame and is the one who get the axe.
- Because You’ve Been “Told” You’d Be a Good Entrepreneur: Your friends and family mean well when they say “You should be your own boss,” or “You’d make a great business owner.” But letting those well-intentioned ego boosts get to your head is dangerous, especially if you’re not ready for the risk and responsibility of entrepreneurship. Just remember that the risk of owning a business isn’t being taken by those who “encouraged” you.
- Because You Want a “Change” or “Challenge”: If your reasoning for being an entrepreneur is because you’re seeking a career “change” or “challenge,” there are many ways to do it without becoming an entrepreneur. If you’re bored with your job, pick another one that interests you, or at the very least ask for more responsibility (and higher pay) from your current job. Otherwise, you risk “pulling the dragon’s tail,” in your search for a challenge.
There’s no shame in realizing you’re not cut out to be a business owner. In fact, it’s a smarter financial move to follow Plato’s old maxim, “Know thy limits.” After all, if it was easy, everyone would be doing it right? But what you can do is try to find a better job situation.
You’re Ready If…
Successful entrepreneurs don’t just start their business out of the blue – they put months, or even years of thought and planning into their decision. They also prepare for the obstacles their business will face in the future, and maintain the flexibility to deal with the problems they’re not prepared for.
The perfect analogy for finding out if you’re ready to be an entrepreneur is to picture yourself preparing to climb Mt. Everest. Because like entrepreneurship, it’s an endeavor that’s impossible to accomplish unless you have the following:
- You Need the Passion: Buying the best equipment and relying on hope won’t mean much if you feel like quitting once you encounter a challenge. You must have a passion for climbing and the will to resist giving up. It’s the same with business. You need to love what you’re doing despite the inevitable hardships you’ll experience – otherwise, you’ll end up resenting your decision and never become a successful entrepreneur.
- You Need the Experience: Climbing Mt. Everest without any previous experience is a surefire recipe for failure, and a dangerous one at that – many inexperienced climbers have died in the attempt. What this means for you as an aspiring entrepreneur is that if you don’t know what you’re doing, your business is almost sure to fail. That means that if you’re an IT professional with years of experience in data security, resigning to start an Italian restaurant doesn’t leverage career experience as well as a data security business would.
- You Need a Guide: Many successful climbers have relied on the experience and direction of a guide to help them reach the summit. In fact, these guides have helped numerous climbers make successfully scale the mountain. In a business sense, getting a “mountain guide” means finding a mentor who has helped other entrepreneurs navigate through the challenges of entrepreneurship. If you don’t have one, make sure you network so that you can find who can share his/her wisdom and experience.
- You Need the Capital: Interestingly enough, climbing Mt. Everest takes roughly the same amount of capital needed to start your own business ($30,000-$100,000). Getting that capital for your business can come from two places – you’ll need to save up enough or have investors/venture capitalists “sponsor” you. Funding your business with loans, credit, or by refinancing your home, will give your finances a shock if your company folds, so beware.
- You Need a Strategy: Choosing a path and evaluating the obstacles and challenges you’ll face along the way is only one part of strategizing for the climb. The other part involves preparing yourself both mentally and physically to deal with the realities of a constantly changing environment. In a business context, this means you must have a business plan that analyzes the market atmosphere, the strength of your competitors, how you’ll market your product/service, your financial plan, etc. You’ll also need a SWOT analysis of your business.