Entrepreneurship appeals to a lot of us in a daydream kind of way. The potential payoff - personal and financial freedom - is a very enticing reward. We like the idea of being our own boss. We adore the possibility of becoming the next industry leader...in whatever industry we target. Our days would be filled with rainbows and lollipops.
The reality, of course, is a lot different. Successful entrepreneurs work hard, very hard. Think you work long hours and are stressed in your current position? Think again. Entrepreneurs work harder. Evenings, Weekends and even Holidays.
It’s not right for everyone. Too many of us get blinded by the upside and spend little or no time considering the pitfalls. How to tell if entrepreneurship is right for you? Well, before you hand in your notice and strike out on your own, ask yourself a few questions. And most importantly, answer them with brutal honesty.
Why? What’s your motive?
Consider why you are thinking about becoming an entrepreneur. What’s your goal? Is it financial independence, greater freedom, vanity, making the world a better place, or something else? Answer honestly. Financial freedom, for example, is a great goal, but the likelihood of attaining it (at least initially) is small, and you might be better off staying in your current, stable position. Consider your motives very carefully.
Are you financially able to do this properly?
Ever hear the expression “You have to spend money to make money”? That pretty much sums up entrepreneurship. You’re going to need a boatload of cash, some of which you might be able to get from investors, but you need to cover your own personal expenses as well. When you jump right in, you’re saying goodbye to a steady paycheck. Do you have enough saved up to pay for rent, and food, and clothing, and a multitude of other expenses that will pop up while you get your idea/business off the ground? How long could you stay afloat with absolutely zero coming into your bank account? If it’s less than six months (at a minimum), you’re probably not ready.
Do you have the time and patience to do this right?
Again, we look to idioms and cliches. Rome wasn’t built in a day...and neither will your business. Do you have the patience it will take? Can you withstand the delays, obstacles, false-starts, and frustrations that will inevitably happen? Can you seriously work (40+ hours per week) towards this goal with little or no return in the beginning? Your belief in your idea must be rock solid. You’ll have to rely on delayed gratification to get this done, and many people aren’t very good at that. We live in a world that promotes and demands instant gratification. Building a business takes time. Can you see it through?
What support systems do you have in place?
In addition to financial (would you be against moving back in with your parents should finances require it? More importantly, would they let you?), you’re going to need a great deal of emotional and mental support. Do your friends and family believe in your endeavor? Or do they think you’re making a huge mistake? You’ll need their support. Do you have it?
Have you done your homework?
A good entrepreneur does a lot of homework. Target audience research (Does it exist? Is it large enough? Can it support your anticipated cost?). Competition research (How many businesses offer something comparable? Can you reasonably compete with them? Is your idea/product somehow better?). Business plan and forecast (Are you prepared to pitch to investors? Can you answer their questions?). Having a fantastic idea is only the first step of many. You need to know, for yourself as well as investors, exactly what you’re getting into. Entrepreneurship is not the time to “hope for the best”.
Are you a good boss?
We’d all like to think so. Truth is, though, that many people are not cut out to be in charge. It doesn’t make them bad people. As an entrepreneur, you’re responsible only to yourself (until such point you have investors or partners). Are you motivated enough to do what needs to be done, each and every day, without someone else breathing down your neck? Do you require external deadlines and due dates put in place by a manager in order to get stuff done? Can you reasonably do that for yourself?
Beyond that, can you make decisions? Easy ones and difficult ones. Or do you hum and haw, agonizing over every choice? An entrepreneur has to have a clear vision and a good idea how to get there. They need to be self-motivated and self-reliant. If you’re just not that type of person, you’re facing a serious uphill battle.
Do you have the necessary skills?
Depending on your idea or business, the specific skill set will obviously change. But, there are certain things any entrepreneur should be able to do. A good understanding of business is important. Can you draw up a five-year business plan? Ditto an understanding of (at least basic) marketing. Are you comfortable talking about your idea (to investors, loan officers, whomever)?
Consider the specific skills you’ll need. Do you have them? If not, can you get them? Do you need to outsource immediately, or do you need a partner? Make sure that you have the means to do what you need to do.
To help along the way (you take help wherever you can get it), Entrepreneur magazine has some great checklists that cover a wide variety of situations.
Entrepreneurship can be an amazing and life-altering experience. But it takes time, money, and a certain personality type to really succeed. Ask yourself some hard questions now to avoid disappointment later. Far from scaring you off, you should be amply prepared to face reality. Good luck.
Photo by Steven Depolo
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