In tough economic times, new businesses are born as many make the decision to strike out on their own rather than pursue employment. Starbucks, PetSmart and Intuit were started during a recession. Most certainly, your own business puts you in complete control of your time, lifestyle and, of course, income.
Starting a business takes very careful consideration. The business you start must “fit” your situation (financial, location, resources) and be well researched before you strike. And it must “fit” you – your work style, personality and interests. Oftentimes the emotional excitement clouds good decision-making – so take your time and be bluntly honest with yourself.
Questions, questions and more questions
What should you know before you strike out?
Is the market you are planning to enter growing, declining or in the midst of significant change?
See many video stores anymore? No. That technology changed almost overnight and the local video store is, for the most part, history. On the other side, personal service businesses continue to grow even in tough economic conditions. Carefully research your business idea and the market you will sell into (yes – in any business, you must sell to some degree).
Who will be your competition – (and yes, you want competition)?
Competition is good. It is an indicator that there is a market and you need to determine how to be better to get new customers or steal customers from someone else. Determine what advantages your competitors offer, as well as their pricing, then beat them by offering more and a better value.
But, be wary of no competition. I recall working with a person who thought she had a brilliant business idea, and launched without doing her research. She was ready to make millions – since there was no competition and she was forging a whole new market. She was caught up in the emotion. But, having no competition should have been her sign. She failed, because she didn’t realize how difficult it would be to sell a whole new concept. She was trying to create a market; a very difficult and expensive thing to do. On the other hand, if there had been other competitors, she could have built on a market, and made her service one-better.
Have you done your homework?
Be sure you fully understand any licensing, permits or other requirements that might be needed in your enterprise, as well as tax and record-keeping requirements. Some municipalities require permits to operate a business and some have zoning regulations as well. Taxes may vary as your product or service could be subject to sales tax, and there are registration and reporting requirements for this and penalties if you mess up.
Can you get by?
You need to know what you need to earn to meet your fixed expenses, and then have the resources to meet these. It is also important to know where necessities like health insurance will come from, and at what cost. When you roll up these expenses, you have your first goal to achieve!
Ask yourself: Can I handle the uncertainty that comes with any new business, can I “sell myself” and my offerings comfortably and am I willing to do the gut-check required?
These are, by far, the most important questions to answer. There are many ups and downs to being in business for yourself, especially in the very beginning. There will be good days, and others that might tempt you to jump off a cliff. You will ask yourself at some point “Why did I do this?” – and this is to be expected.
No matter what business you engage in, you need to be able to sell. Maybe not the stereotype that some people think selling is; it might be more about educating a customer. Still sales, though, just another form. If this makes you uncomfortable, and you do not have a partner to fall back on who is comfortable selling, it is likely not for you.
In the end, there will be the days that motivate you more than you could ever have expected, and as your business gets established, days when you are in full control of your life. These days will far outweigh the on-the-edge-of-the-cliff days. That is truly motivating.
The best of luck and prosperity!
Dan Moran is president & founder of Next-Act, a career management & transition firm located in Colonie. You can reach him at 641.8968 or email@example.com or visit www.next-act.com.