Being an entrepreneur is more romanticised than ever and popular culture increasingly celebrates entrepreneurship as well. Have you ever thought of being an entrepreneur yourself? Do you have an idea nobody else has thought of? The better question should be: do you have what it takes to succeed as an entrepreneur? Sure, new technologies make it easier to start a business, but increased competition means that there’s a smaller piece of the pie for everyone. Here are some questions you should ask yourself before you make the jump.
Are You Willing to Work Hard?
While it is possible to work part-time on a business or take a second job, the reality is that starting your own business will require far more time than a standard job.
It is common to work six and seven days a week in the startup stage, especially if you’re alone. Twelve-hour days are common. Are you willing to work hard? And are you willing to invest this time though you may fail? Are you self-driven? If you aren’t able to drive yourself to keep going when you aren’t getting paid for your time, you probably shouldn’t be an entrepreneur.
And forget about off days and vacation packages if you’re just getting started. You’ll probably won’t have time to delegate at first and you’ll need to be committed to your clients, which means being available to them as much as you can. So, unless you are ready to put the whole weight of the business on your shoulders, then entrepreneurship is definitely not for you.
Are You Willing To Take Risks?
Starting a business is a major risk. An estimated 70% of businesses fail within ten years, though the failure rate depends on the industry and product or service offered. Even if you can start a business without any financial investment, you’re still pouring your time into it. You risk working many hours without pay if the business fails, whereas an hourly job would pay you a predictable wage. If you aren’t willing to risk failure, you’re not qualified to be an entrepreneur.
You can manage the risk by keeping debt to a minimum, only taking measured risks, and being covered by insurance. For example, you could limit your risk by taking out loans to fund the business but refusing to mortgage your house. Look for ways to rent the equipment you need instead of buying and try to buy used instead of new.
Insurance protects you against risk. You can get a quote for business liability insurance at next-insurance.com. Take the time to get familiar with the different types of insurance they offer since you may need additional types of insurance for your business.
Can You Handle Failure?
Your business may fail. That’s one risk we already addressed. However, as an entrepreneur, you will experience failure in many ways on a regular basis. Sales calls will be rejected the vast majority of the time. Your initial product may not sell well, and you may have to change the design or your business model or both. On top of all of this, you have to be realistic. If you set unrealistic expectations, you’re setting yourself up for failure.
Are You Willing to Take On Complex Financial Issues?
You’re going to have to take on complex financial issues. A budget is the first step, but you’re going to have to start dealing with taxes and raising funds almost immediately. You’ll have to generate invoices and collect payment due if you want to remain in business. You can reduce the burden by hiring qualified tax experts and an accountant, but you have to be aware of your financial status and plan for future expenditures if you want to stay in business.
Recognize that you don’t have to be a jack of all trades, but you will have to wear many hats, at least at first. Evaluate your strengths and weaknesses and know where you’ll need to bring in help and when.
Can You Sell Yourself?
If you’re building a business, you have to be able to sell your business – and at the very start, that is just you. You’re the head of marketing for your new business, selling your services or products. You’ll need to convince investors and lenders to loan you money. You may need to convince others to work for you. If you need constant ego gratification, the constant rejection small business owners face makes entrepreneurship a bad idea.
Read through our list of questions you need to ask yourself to determine if you’re the right type to start your own business. If you feel like you fit the bill, make sure that you research the market for your business or product idea first and have all bases covered before you start.