3 Steps to Deciding if Entrepreneurship Is Right For You
Let's face it: Anyone can own a business. Building and running a successful company is something else entirely.
We certainly need more employers, but business ownership isn't for everyone. If you've been out of work and your dream and desire is to become an entrepreneur, here are some things to consider:
1. You're a good (fill in the blank). But can you learn to be a good business person? Jobs are task-focused and specialized. Ownership is vision oriented and generalized. You may have overseen budgets, but can you explain how your new business will make money? How will you price your products or services? How will you market them? How will you track sales, invoice customers, account for activities and make sure what you promise is delivered and all your vendors are paid?
As an owner, your most important job is to create customers who buy from you repeatedly for as long as you want to be in business. So, how are you going to sell, and who will you be selling to?
Knowledge, in the form of answers to these types of questions, is the most vital resource you can have before you jump into any business.
2. What sales can you make right now? If you've got a line of clothes, can you work out small consignments? If you want to be a consultant, can you work up a list of prospects and turn them into business? If you're in construction, is there a list of projects you can secure?
Realize the state of your local economy impacts demand and growth potential. If you're in Las Vegas, for example, a resurgent real estate market can be appealing -- just know you're in competition with veterans who are stronger for surviving the past few years. If you're in construction and strong demand outstrips supply as is the case in certain areas in Texas, for instance, you'll have a better opportunity to be part of an expanding category or niche, even if it's in a slow or sluggish market.
3. Do the numbers work? Being out of work is stressful, but that doesn't mean you should jump at any opportunity with seemingly high upside potential. Yes, land costs in Detroit metro are low, but should you start from scratch as a developer there? Yes, there are huge changes coming in health care, but should you jump into services where costs may be higher than expected and demand, lower than anticipated?
Let the numbers be your guide. Fall in love with the numbers, not the opportunity.
If you do decide to go for ownership, there are a few key steps you need to follow:
- Completely systemize your business. This will result in more efficient operations that produced greater profits, a team that knows their job expectations and a sound foundation for growth.
- Base all decisions on financials and performance, rather than your gut.
- Learn to sell more effectively and offer a guarantee to help convert prospects into sales.
- Get a guide, mentor or advisor to help you from the beginning.
Follow these steps and you’ll have a better chance to succeed if you decide to strike out on your own.