And two things you’ll need if you do
Business failure is common, but exactly what is a business? In most jurisdictions, once you fill in the right form you’ve got one. If you don’t renew it next year, it’s gone. Chalk one up for failure. If you renew it, you are still in business. Does that mean its working? A functional business must do more than stay out of bankruptcy. It’s meant to provide an optimal return on the funds invested in it.
Dumb reasons
A recent US study found 75% of employed adults wanted to quit and become entrepreneurs. It’s a good thing they all have jobs, because none of the six reasons they gave were good reasons to start your own business.
- Set your own hours: you won’t, the business will. They’re likely be longer than your full time job
- Spend more time with friends and family: your own business blurs boundaries between work and play. Business is more likely to intrude on family time rather than be left at the office.
- Get away from office politics: yes, if you are a sole proprietor. But that often means isolation from ideas and a limited ability to grow.
- Be your own boss: you’ll be taking yourself with you. You’ll still be dealing with people, not least customers and suppliers. If social skills are not your long suit, you could still struggle.
- Avoid commuting time: that’s good, because you will need more time.
- Make more money: on a per hour basis, unlikely for a year or two.
These are not deal-breakers if you enjoy stress, would like to work harder and want to feel insecure about your income.
Yet there’s a positive side to those three things: properly managed stress can be a source of energy; long hours don’t matter if you love what you are doing; and generating real income can be a motivating challenge.
The chance of success is significantly boosted if you’ve got two things: passion and cash.
By passion, I don’t mean following your dream. That can just focus you on the outcome. You need to be is passionate about making it work on a daily basis. Running a business is a present time activity, not a future one. It’s not a matter of “won’t it be great when…” It’s being excited about getting on with it every day. If you’ve got that, all things are possible.
Cash, unfortunately, is crucial. Businesses don’t fail when they don’t make a profit. They fail when they don’t have any money. It usually takes twice as long and twice as much to get real momentum.
What can you do?
Don’t bet the farm. Stress-test the idea with a part-time project. Try having a customer or a contract in place before you quit your job. Look at working with a partner. Focus less on the size of the market and more on a realistic view of the share you can capture.
Simplest of all, type your great idea into a search engine. Someone, somewhere, will already be doing it. How is it working for them? Make sure what you can offer is competitive.
If it is – and you’ve got the right sort of passion and the right amount of capital – then you stand a good chance of not ending up another statistic. If not, start working on how to improve your day job.
Thinking about starting a business? Click here for 101 questions you should answer before you start writing your business plan