Do You Have What it Takes to Start a Small Business?
Considering starting your own small business? Ask yourself these 6 questions to find out if you have what it takes to succeed.
If you’ve ever dreamed about running your own business, you’re not alone. A 2014 survey by The University of Phoenix Business School found that 50% of working adults in the United States either own or want to start a business For many, the opportunity to be your own boss, set your own hours, and spend your days doing something you love sounds like a dream come true.
However, entrepreneurship isn’t for everyone. According to the Small Business Association, only half of new businesses last five years, and only one-third last ten. Successful start-ups are about more than great ideas; they require extensive planning, hard work, and the ability to solve problems both big and small.
Characteristics of Successful Entrepreneurs
The most important thing you need to start your own small business is a clear and enthusiastic vision. You should have a concrete idea for either a product or service that isn’t currently available, or a better version of something that’s already on the market.
Once you’ve identified what your business is going to offer, you need to assess your skills and experience to make sure you have the right entrepreneurial spirit to run a successful company. Ask yourself the following questions to identify which characteristics you already possess and which ones you may need to work on.
- How decisive are you? You’ll need to be able to make decisions, often instantaneously, without being able to consult a third party.
- Are you a self-starter? You’ll be your own boss, so you’ll need to be able to take initiative and motivate your employees and partners. There are several different types of bosses, so you’ll need to decide which one you will be.
- How successful are you at planning and organization? A lack of planning is the main cause for the majority of small business failures. You need to have clear goals and define how you’re going to reach them. You also need to be extremely organized, especially when it comes to finances, projections, and scheduling.
- How well do you get along with people? The most successful entrepreneurs are those who can interact with a wide variety of people, communicate well with others, and build mutually beneficial relationships.
- Are you willing to take risks? Taking risks doesn’t mean acting without planning. You’ll need to carefully evaluate the costs associated with starting a business. Do a market analysis, identify the needs of your targeted clientele, and then take action! Sometimes you won’t have all the answers before you act, and that will require a leap of faith. Don’t be too afraid of making mistakes along the way because you’ll learn from them.
- Do you have the energy? You’ll need a lot of physical and emotional energy, and you’ll most likely start off working long days every day of the week. You should also consider the impact that starting your own business will have on your personal life and your family.
If you answered these questions and found that you came up short in some areas, consider developing your skills further before you dive into entrepreneurship. Or delegate your weakest capacities to employees or partners who can up your game as you start a business.
For example, if closing sales isn’t your forte, you can research successful strategies, take a class, or find a mentor. Otherwise, if you’d rather focus your energies on areas of the business that don’t involve your weaknesses, you can bring on a partner with sales experience, or hire a salesperson to work on commission on an as-needed basis.
If you struggle with organization, try different software and apps to help manage your workflow, or enlist the help of a family member with some extra time and the right skillset.
4 Steps to Turn an Idea Into a Business
Once you’ve determined that you have what it takes to become an entrepreneur, including a great idea, it’s time to create a plan of action. These four steps will help you to get started:
- Create a business plan. Whether you decide to create a formal business plan for setting up your company or a less-structured document, it’s still a good idea to write one to help narrow your focus and solidify short- and long-term goals.
- Set your timeline. It may be tempting to quit your day job and devote all of your time and energy into getting your business off the ground. To minimize your financial risk, it’s better to start making enough money as an entrepreneur to cover your living expenses before you give notice. It means you’ll be working a ton at the beginning, but you’ll have less money worries down the road.
- Take advantage of small business resources. Chances are, you can find cheap or low-cost mentorship, training, or counseling programs for small business owners in your community. Use them! There are many resources for women, minority, or veteran-owned businesses, to name just a few. Investigate co-working spaces in your area to see if any include businesses that complement yours. Also, depending on your industry, joining an incubator can also be a good way to start a business with a support system already in place.
- Research financing options. Most businesses need capital to get started, and without a proven track record, a bank loan is usually off the table. Microloans and crowd-funding are avenues to explore when seeking cash. Friends, family, and available credit are other options.
Starting your own business isn’t easy. It takes a lot of hard work, determination and the right leader to turn a great idea into a successful company. But in the wise words of Jeff Bezos, the founder of Amazon.com, “I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not trying.”