With the economy the way it has been for the past 18 months or so, you’ve decided to reevaluate your professional life, so for your New Year’s resolution you’ve made up your mind to take the leap and start your own business in 2010.
Although there will certainly be dozens more questions that present themselves along the way, in order to take a methodical approach to your new life, consider these five critical questions:
1. What are your skills and do they dovetail with your passion(s)?
Make a realistic assessment of your skill set. Are you going to want to stay within your current field of expertise or break away from what you’ve been doing to follow your passion for tying fly fishing lures or crafting dolls out of pipe cleaners?
Chances are you’ll be more successful, at least from a fulfillment perspective, choosing a career that focuses on what comes naturally to you, but it’s always a good idea to dip your toes in the water and test out your idea first. You’ll have to decide if you’re going to pursue your new career part time or full time. This is not a time to make quick decisions, so research the market for your new endeavor and make an effort to speak to as many people as possible who are working in your intended field. Pick their brains and take copious notes. Absorb it all and then make a practical decision as to whether or not you should continue in that direction.
2. Are you going to market a service or product?
Providing and marketing a service is typically a much less cash intensive way to get into business. With a service you won’t have to think about expensive and time-consuming product research and development, manufacturing costs, inventory holding costs and all that goes with creating a tangible product.
Although the barriers to entry for your competition can be less when providing a service - depending on the type of service you’ll be offering - as long as the skill you’ll be marketing is one that has a high demand, or you’ve found an under-serviced niche to fill, you can test the waters without spending a lot of money at the outset. And this leads into the next point to consider….
3. Are you going to be home-based or have an office or retail location?
Where do you want to locate your business? A service business is much more likely to be operated efficiently out of your own home, where instead of having to commit to a long-term lease and spending additional money on deposits, rent, electric, gas, office furniture and other expenses, as long as you comply with local laws and tax guidelines (check with your accountant or tax advisor!), you may even be able to write off the space in your home that you use exclusively for your home-based business, and in turn qualify to enter StartupNation’s Home-Based 100 Competition in 2010, which I highly recommend.
4. Do you have a small budget or big budget to work with?
What kind of budget do you have for your new pursuit? Will you be personally financing the business or do you need bank financing? Although reports show that banks and the Small Business Administration are loosening up the purse strings a bit, attempting to get a loan for a new and unproven business can be a daunting and uphill battle.
Perhaps you’re better off going to the “Bank of Friends and Family.” Certainly their underwriting policies are likely much less stringent than the brick and mortar bank down the street. And you’ll definitely want a well thought-out and realistic business plan to present to your potential investors, but just as importantly, to provide you a road map for developing and implementing your idea.
5. Can you use some support?
Of course you can use some support – we all can when starting a new venture. Begin your search right here at StartupNation, where you can find a wealth of information and resources from people who have been where you are, and are now where you’d like to be. And you’ll be surprised at just how willing they are to help you.
Also, consider the free and invaluable services available from your local Small Business Development Center or the Service Corp of Retired Executives, a legion of retired men and women who donate their time and expertise to help people with fire in their belly and a strong vision, just like you.
Take advantage of free and inexpensive community college courses in your area and/or offer to do an “internship” or apprenticeship with someone who’s doing what you’d like to do. You might even consider VocationVacations, where you can try out a new career and see if it’s really for you, without making a huge commitment in time or money.
Last, but certainly not least, seek advice from business people you respect and ask them to join your personal advisory committee, a group of trusted friends, family and acquaintances that can help guide you along the way.
Navigating the endless amount of landmines that lay ahead is half the fun of being an entrepreneur, so make it easy on yourself and do the research necessary to take the leap into small business with your eyes wide open. But to be fair, often the most successful and innovating people are those who didn’t know what they didn’t know. So don’t talk yourself out of what could be a long and fulfilling career because someone told you it couldn’t be done or your idea wasn’t good. And in the words of Winston Churchill: “Never, never, never give up.”
Starting your own business but need help finding your passion? Listen to Ralph's podcast: "Got a Passion? Make it a Living!"