The landscape of the American economy has changed dramatically over the last several years, resulting in near record-high unemployment and a shrinking job market. While companies are opening their doors to new employees once again, millions of workers are choosing the path of the entrepreneur, taking their careers into their own hands. According to the Kauffman Foundation, there were 476,000 new business owners each month throughout 2013.
If you’ve got the entrepreneurial itch, you’ll need more than just a great idea if you want to succeed. Building a business requires hard work, patience and know-how and you need to be sure you’re up to the effort. Before you quit your day job, ask yourself these questions to help figure out if you’ve got what it takes to be your own boss.
Why do I want to own a business?
One of the most important things you need to consider when starting a business is why you want to work for yourself in the first place. If you think being an entrepreneur means sitting around in your pajamas all day and raking in the big bucks while only working ten hours a week, you’re going to be in for a rude awakening.
Examining your motives can tell you a lot about whether you’re really cut out for entrepreneurship. For some, owning a business is about providing a quality product or service that’s not currently available anywhere else. For others, it may mean creating a company culture for their employees that was lacking in their previous job. Making money is obviously a goal of any business but if that’s your sole focal point, you may find that your vision is a little short-sighted.
What are my strongest and weakest points?
Knowing what you’re good at and what you need to work on is a vital part of taking the leap into business ownership. At a minimum, running a business requires a solid work ethic, strong organizational skills and the ability to manage your time effectively. If you’re the type of person who can’t remember where they put their car keys you may find things like keeping up with paperwork or sticking to a schedule challenging.
Part of being in business also means being able to sell not only your product or service but yourself as well. The approach you take to marketing your business can either make or break your success. If you’re not comfortable promoting yourself and what you do, it may be a sign that you’re not ready to put your business idea in the spotlight.
How much time am I willing to invest as an entrepreneur?
When it comes to launching a business, overnight success is far from the norm. It can take months or even years before you start to see a profit and that requires a willingness to stick with it in the long haul. When you’re contemplating becoming an entrepreneur, you have to be realistic about how much time you’re able and willing to invest into it.
Unless you have a large cushion of cash set aside, chances are you’ll need to work on developing your business idea while continuing to work at your current job. While it may take you a little longer to reach your goal if you’re only able to work on your business part-time, that’s not necessarily a drawback. Working at a slower pace gives you time to figure out if entrepreneurship is a good fit and whether your idea is actually viable.
Do I have a plan?
Getting a small business off the ground starts with having a well-thought out plan for how you’re going to do it. A good business plan identifies what your objectives are and spells out how you’ll execute your goals. If you haven’t taken the time to write out a business plan, you could be sabotaging yourself before you even get started.
There are plenty of free resources you can use to draft your business plan. The Small Business Administration is a good place to start. Getting all your ideas down on paper makes it easier to map out where you want your entrepreneurial path to take you.
It’s estimated that for every ten businesses started, only five will last beyond the three-year mark. Just a third go on to stay in business for ten years or more. While these figures may seem discouraging, they don’t seem to have affected the recent upward trend in entrepreneurship.
If you think you’re ready to join the millions of Americans who work for themselves, taking a personal inventory beforehand can give you an idea of whether or not you’re truly prepared.
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