Setting Clear Goals
Q: What do I need to think about before I start my business?
A: The main thing you need to think about is what you personally want to get out of it.
When I started my first business, I jumped right in with little thought to what I was really trying to accomplish. I fear that many people make this same mistake. They just, well, want to be in business. They aren't sure what that means, but they have some vague dreams of success and think that they'll recognize it when they see it. They may hate their job, or are bored, or have just been laid off--what they're doing is moving away from something negative (such as escaping a job or a bad situation) rather than toward something positive (like having a clear goal for their business).
Not to put too fine a point on it, but this is not what you want to do! From the very beginning, you should be thinking about what you hope to get out of your business, long-term. What do you hope to achieve--personally, financially and professionally? How much do you want to make? How much free time you want? How many employees do you want to have? When you're ready to retire, will you want to pass the business on to your family, shut it down altogether or sell it? It may seem unnecessary to answer these questions before you start, but that's exactly the time to do it. You can increase your odds of success by thinking clearly, from the very beginning, about your primary goal and what you're willing to give up to achieve it.
Many people start their businesses with what they think are clear reasons (more money, prestige, a sense of accomplishment, more flexible work time, more time with their kids, being their own boss and so on). That's a good first step, but you need more. Begin by defining your primary goal, then work from there. There are always trade-offs, and the sooner you have them clearly in mind, the better off you'll be. For example, it is going to be hard to give equal weight to the goals of maximizing income, working part time and having no employees. Any of these are valid, but you will have to choose less of some to have more of others.
For example, if making a ton of money is your primary goal, then you have to design your business around that. And to be realistic, make sure that you either have or are able to develop the skills to support that goal. You'll need to look several years into the future and project a growth path that will bring you the money you seek. How many customers do you need to have, how many employees, what kinds of products or services will you sell, and how will you cash out? These are all questions to ask.
If your primary goal is to maximize the time you can take off, then you're probably looking at a markedly different company than the above example. You might define a certain income level and then decide that anything above that isn't worth the time it would take.
The bottom line? You should design your business around your personal goals, decide what things are most important to you and understand what you may have to give up to get them. A lot of people just "go into business" without really thinking about why or what they want to get out of it, and then they spend years in low-paying, unfulfilling toil with no reward in sight. Don't let yourself be one of them!
Keith Lowe is an experienced entrepreneur who is a founder and investor in companies in several industries. Lowe also mentors new entrepreneurs; serves as past chairman of the board for Biztech, a nonprofit high-tech business incubator; and is a co-founder and officer for the Alabama Information Technology Association.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.
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