“I’ve had it with this crap! I want to start my dream business.”
Sounds familiar? Chances are that almost every one of us would have gone through that stage in life.
Worn down by the corporate grind, you dream of pursuing a livelihood free from the shackles of a 9 to 6 life. One where you can call the shots as your own boss, without fearing somebody else breathing down your neck.
Well, I’ve been there and done that. Although I enjoyed my time in public service (you can read my thoughts on hiring a public officer here), I longed to try what it’s like to be an entrepreneur.
Now that I’m celebrating my fourth year in business – while still contributing to our family wealth – I thought that it may be useful for me to share what I’ve learned over the past few years as an entrepreneur. After reflecting on it, I’ve arrived at 7 key questions which you need to ask yourself before taking the plunge.
These questions are important considerations for anyone keen to pursue an entrepreneurial life – be it as a freelancer, solopreneur, or founder of a sizable start-up (complete with staff and assets).
This is certainly the most important part of the equation. Without passion or enjoyment, your entrepreneurial fire will fizzle faster than a barbeque pit during a tropical rainstorm.
Never ever pursue a business just because “the money is good”. While we should steer away from dying trades, doing something just because others have made millions or billions in that industry alone may not be a brilliant plan.
What’s more important, however, is to pick a profession or business which you believe strongly in, and which you are intensely passionate about.
While passion is an important consideration in starting your own business, you need to also be good at what you wish to do.
As a fledgling start-up, your business will compete against all the big boys out there. You can’t just hope to get by on a song and a prayer.
Fortunately, you have years of experience to back your decision. This may come in the shape of your previous jobs, or a hobby which you’ve mastered.
Are you good with your hands? Do you have a green thumb? Or perhaps you have a keen eye for design? Align your business closely to your areas of competence.
If you are unsure about whether you have what it takes, ask your family and friends to validate your strengths.
Now that you know your strengths, you need to consider if your business idea can do either one (or both) of the following:
Unlike a hobby, a successful business needs to provide immense value to its customers. It needs to offer something unique (or distinct) which isn’t easily available in the market.
The last thing we need is another handphone accessory shop. Or a discount store selling cheap trinkets.
Which brings us to the next question.
Someone once said that the difference between a business and a hobby is whether somebody is willing to pay you for it.
Being the greatest MineCraft player or mixer of curry spices alone isn’t enough. You need to have a ready market of potential buyers.
A good way to test the commercial viability of your business idea is to tap on your family and friends network. Conduct informal surveys to ask people how much they will pay for your anticipated product or service.
Better yet, roll out a beta version of your actual product or service itself, and see if the market is receptive to it.
(Read The Lean Startup to learn how you can build a minimum viable product to test your market.)
You can’t be your own boss if you don’t like to sell or to market. In fact, the world’s most successful entrepreneurs are often great marketers or salespersons.
Now this doesn’t mean that you have to be an outstanding orator ala Billy Graham or Barak Obama. Rather, it requires you to have some basic knowledge of marketing, advertising and publicity.
If your business has an online presence, it may be useful to pick up some tips on social media marketing. Using free social media platforms like blogs, Facebook, LinkedIn, and Twitter, you can reach out to your targeted customers in a very cost-effective manner.
(Sign up for my two-day social media marketing course if you wish to learn more.)
OK, you’ve got your dream business all planned. You worked out what you love to do, the value which you can bring to the market, as well as how you’ll be marketing your business.
Heck, you’ve even gone ahead to do a prototype, and received rave reviews from your pilot group of customers.
However, you forgot one thing: Who is going to pay your bills?
If you are married or attached, it makes sense for you to discuss your business plans with your significant other. To reduce your financial risks, it may make sense for at least one of you to hold down a more stable job while the other pursues a fresh venture. This is especially important if you have got kids and a household to feed.
You may also wish to build up a comfortable buffer of cash to see you through at least 6 to 9 months of zero income. Doing so not only reduces the stress of your business going under – it also provides you with ample time to look for alternative livelihoods.
Which brings us to the final point.
By now, you’ve probably heard all the mantras of how failure contributes to entrepreneurial success.
Tycoons like Sir Richard Branson (read my article Like a Virgin by Richard Branson), Jeff Bezos (Amazon.com) and Jack Ma (Alibaba) have regularly extolled the virtues of failure. Companies like Google and Pixar even celebrate failures the way they do successes (more in Innovate the Pixar Way).
When you hit a wall in your business venture, you need to decide on the following:
Now your choice at such a crossroad will depend on a combination of your financial (and family) commitments, your appetite for risk, as well as the opportunity costs of continuing to be an entrepreneur versus finding a job. Unfortunately, there is no model answer here.
Whatever the case may be, however, you know that you’ve done something remarkable in striking out on your own, and the lessons which you’ve learned will come in useful whichever path you eventually take.