Think You're Ready for a New Venture? Answer These 5 Questions First.
Don't go into this blindly. It won't end well.
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For all its glamour, being an entrepreneur requires hours of unglamorous work. Launching numerous ventures can be great, but can also bring along stress and burnout. Even if you've been successful before, circumstances in your life change, and you may be considering a new venture.
It's critical to make sure you're genuinely ready before even thinking about making a pivot as an entrepreneur. I've compiled the five critical questions that too many entrepreneurs forget to ask themselves before beginning their next venture. Failure to ask any of these could lead to pain if you aren't mentally and financially prepared. Here's what you need to do some soul searching on before jumping off.
1. What is the absolute worst case scenario?
When it comes to business, a savvy entrepreneur should be prepared to handle the unexpected. It's a given for things to go wrong. The norm is that you will always experience setbacks as an entrepreneur; it's just a matter of prepping your mindset to deal with those setbacks.
Ask yourself what the risk factors are and what your backup plan is to manage them. You can't always control the outcome of some aspects of your business, but be prepared to tackle unexpected events and pivot your plan.
2. What is the social cost of this venture?
Everybody talks about the financial costs of a new business, but nobody talks about the social costs. It's important to be aware that you can become very polarizing as an entrepreneur and push a lot of people away. It's normal to experience really low points during your early years as an entrepreneur. You'll have to make social sacrifices, and a lot of your personal relationships became strained because of those sacrifices. If you're focused on achieving success, you're going to weed out the people who are simply content with their lives. If you're committed to building something great, expect the journey to be lonely at times.
3. What are my top motivating factors for starting this venture?
At first, it's normal for your top motivating factor to be money-driven. It's essential for you to focus on building the foundation of your business and establish cash flow. Be okay with the fact that wealth is important. Once you learn how to generate cash, take that skill and apply it to other areas. As your business grows, you'll figure out what your next motivating factor is. Whether it's driven by philanthropy or a passion, your motivating factors will change as you grow.
4. Can this business grow beyond $1 million a year?
In today's environment of globalization and competitive threats, staying small is not an option. Your business venture needs to have the potential to grow to at least $1 million per year. Ask yourself; can this be an actual business and not a lifestyle? For example, if you go on a month-long vacation, you should be able to come back to a business that's more successful when you left. Your business needs to eventually be able to function as a well-oiled machine, not a one-man show.
5. Am I willing to take full responsibility?
It's easy to be excited about a business when it's first launching. The reality is that a majority of your days as a business owner will not be rosy, and it's easy to blame other factors for your inability to make progress. One of the most common complaints from entrepreneurs is that they blame their industry or town for their inability to reach success. A timeless truth about building a business is that the grass is never greener on the other side. Business is actually largely the same across industries. You'll face similar challenges no matter your venture, and you need to stray away from blaming factors that have little impact on your chances to succeed.