Ever Thought About Starting Your Own Business?

In response to last week’s post (Reclaim Your Career Security) , I received questions from several people asking me: “Would I have more security and control over my career if I simply start my own business?”

Let me give my short answer first: No. There is not necessarily more job (or career) security if you have your own business. When you work for yourself, you still have to please others to earn a steady income. For instance, consultants need to line up their next client and small business owners have customers to satisfy. There is not necessarily less job (or career) security either. Each path has its own challenges for anyone who wants to succeed and thrive.

I also believe that going out on your own is an option worth exploring, as either a short term or long term career strategy. There are lots of options today for those of you who want to have your own business. There are virtual and in person consulting or contract jobs, there are franchises to invest in, as well as online and store front businesses. You could even launch a non-profit organization.

If you have ever thought, “Maybe I could go out on my own and run my own business,” then here are a few basic questions to consider before you make your decision.

1. What would you? That is, who would you serve (your customers), and what would you do for them? What problems would you solve or what solutions would you provide? What is your business concept? I’ve worked with many clients who want to go out on their own and start their own business, but they are unclear about what exactly they would do. If you’re not clear, your potential customers and investors won’t be clear either. Start by nailing down what you want to do. If you’re not sure, then consider hiring a career coach to help you figure this out.

2. What are your financial needs? When you are self-employed or set up a small business, how you earn money is different from when you are an employee. What are your personal needs for income? Medical insurance? Taxes? Don’t forget expenses for family needs, such as college tuition or sports camps fees for your kids, or nursing home fees for your aging parents. How much money do you need to bring home? Then consider what are the basic set up costs for your business? What would it cost to run your business? Many people struggle when venturing out on their own because they don’t take the time to understand their financial realities up front. Seek the advice of a professional tax or financial advisor if you need it.

3. How much time do you have before your business needs to turn a profit? (Remember: even non-profits require a positive cash flow.) Are you willing to use your savings to support you? Or will you continue to work full time, while you get your own business going. Will you have investors or will you obtain a loan? People are often overly optimistic about when their business will be profitable. It is important that you have a plan, as well as a backup plan, in case things don’t work out as expected.

4. How much time do you have to invest? What hours will you be available to work to set up and run your business? I’ve seen many people burn out because they underestimated the work required to get a new business started or because they overestimated their own availability. You may want to hire some help early on to assist you in launching your business.

5. How are your sales and marketing skills? If you are the owner, even if you hire sales and marketing staff, you still need to do some selling and marketing of your business and your products and services to potential investors, partners, clients, and customers. If you don’t have the skills, you can learn them. There are many training programs available that teach sales and marketing to small business owners. Just look for one that understands your business model and fits your personality.

This is a short list of questions, based on the biggest mistakes I’ve observed people making when they choose to become an entrepreneur. If you are still interested in exploring the option of setting up your own business, here is one assessment I found that you can take online (for free).

Quiz: Do you think like an Entrepreneur?

What are some other questions you have about starting your own business?  I’d love for you to share them below.