So you’ve decided that you would like to start your own business (or a new business unit). One of the first things you need to ask yourself is what do you want to get out of the business?
This often means different things to different people, and setting out with a clear goal in mind is key to measuring your success along the way. Of course, many businesses are launched and then change direction, but all businesses must start with the end in mind and continue to review this as they go. So the first question to ask yourself is: Why am I doing this?
For many entrepreneurs, the quest for freedom from the 9-5 job, and the almost limitless potential of income (versus an index-linked salary) are two big drivers in setting out on a new venture. For you it may be these things, or the desire for independence, a new challenge, or simply a great opportunity that you can’t say no to. It’s important to get this clear in your mind, and then envisage what success in this business looks like to you. Is this a part-time Taobao business you can run from your laptop in your spare moments, or a large scale operation with heavy funding requirements and world domination in-tow?
Your clear vision will give you a sense of purpose through what will undoubtedly be a challenging and demanding process. So go on, take the time to nail this down!
It’s also crucial to discuss your vision, timeframe, and future exit with any business partners, investors, husband/wife, or other parties involved in your business. Are you all on the same page when it comes to these things? Going into business with partners is much like a marriage; it makes for much smoother sailing if you agree on the direction you’re going.
Do you need to quit your job yet?
While you might be ready to pack in your 9-5 right now, that may not be the smartest thing to do. Consider the options of running your new business part-time while you keep your job (and salary), and use this time to test out the business on a small scale. This can be a good way of lowering the personal risks while testing out whether your business has potential. You may quit your job and scale up at a later stage, or simply keep the business as a profitable sideline, depending on what you learn about the potential size and viability of your model in those first 6-12 months.
Do you have the capital needed?
While setting up an online business can be inexpensive, it pays to set out a realistic business plan and budget. Do you plan to fund this business out of personal savings, a loan, or an investment, or a combination of these in stages? How long will you give the company to break-even and become profitable? Remember, a great majority of businesses fail because of lack of capital. We’ll discuss financing in more detail in a later post.
“Fail to plan, and you’ll be planning to fail” said Benjamin Franklin. Take the time to plan what you really want before you start your own business and you’ll be in for a happier and more focussed journey to success.