6 Tough Questions to Ask Yourself Before Starting a Business
Note: This is a guest post by Catherine Rees, senior copywriter at Signs.com and the majority contributor to the Signs.com blog. Catherine has 6 years of experience as a copywriter and editor. Prior to joining the Signs.com team, she operated a successful freelance writing business. She also worked at the Salt Lake Community College Writing Center as a writing tutor and mentor and conducted writing workshops for several organizations including the Cancer Wellness House, the Road Home and Liberty Senior Center.
Some people who do it revel in their new surroundings, saying, “We can’t imagine being anywhere else. This home exactly fits our needs and enhances our lives in every possible way.” Others say, “That was the most stressful three years of our lives. It cost twice as much as we thought, took three times longer and was absolutely horrible. We would never, ever do that again.”
For some, being able to tailor a house specifically to their needs was wonderful … for others, it wasn’t worth it.
Starting a business might sound perfect: you’ll have the ability to tailor your career to exactly fit your ideal version of who you are and what you want your life to be. That might be the case, but odds are, things are not going to be all roses and rainbows. You need to make sure that you’re ready to take on the challenges of running your own business before you quit your job and invest time and money in your new endeavor.
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Related Audio: Interview with Jim beach, author of ‘School for Startups’
So, before you start, ask yourself these tough questions:
1. Am I fully invested in this idea?You’ve been to several baby showers lately, and people have commented on the fact that your town needs a little infant boutique. You like babies. You like baby clothes. You like expensive baby furniture, strollers, highchair and other accoutrements. Surely, you think, a baby boutique would be a great business!
Take some time to really think over what your life will be like on a long-term basis. Does the idea of spending all your days surrounded by adorable baby stuff and new moms make you feel all warm and fuzzy, or will you quickly tire of mobiles that play “Twinkle, Twinkle, Little Star” over and over and over?
You should be so passionate about your new business that you’re willing to stick it out during tough times. If you’re in it just to make money and it takes awhile for that to happen, you’ll quickly find yourself getting bored. If you’re telling yourself, “Well, I’ll start this little shop and if it doesn’t work I’ll just get another office job,” your business idea is probably destined to fail.
2. Is there a market for my stuff?
Just because 3 baby shower guests mentioned that it would be nice to have an upscale baby boutique in town doesn’t mean that your business will automatically be successful. What’s the average income in your area? Who will buy the expensive cribs and changing tables you stock? If you live in an area where the predominant demographic is young parents with lower than median incomes, you’re not going to sell many $1500 cribs. Make sure your business will be able to reach enough potential customers before you invest in the idea.
3. Do I have adequate resources?
How do you plan to support yourself while you establish your business? Ideally, have savings that will cover at least one year of personal expenses, so you won’t be worried about paying the mortgage. And you should have enough money to cover the initial start-up costs of the business, plus several months of operating expenses (You may be able to get some of this money from investors or a business loan).
I know a woman who started an antique shop several years ago. She had acquired lots of amazing antiques over the years, so she didn’t have any inventory costs in the beginning. But she did have overhead expenses such as rent, utilities and payroll. She opened her doors with just enough capital to cover 6 weeks of expenses. It wasn’t enough. When week 7 rolled around, she began using her personal credit card to pay for business items. Her credit card debt mounted. She couldn’t get a business loan, so she took out a second mortgage. After six months, she closed the antique shop, deep in debt.
4. Do I have the right personality?
Starting and running a successful business often requires a particular kind of personality. If you’re not particularly ambitious and you find it difficult to make yourself work without supervision, owning a business might not be for you. If you tend to shove important papers into a drawer or stack them around the house, running a business will be an organizational nightmare. If you are timid and shy and prefer to be alone, a business that requires working with customers or networking with other industry professionals will be stressful.
5. Am I willing to make financial and lifestyle changes?
Most businesses don’t earn a profit for months. For some, it takes a year. Other businesses fail completely and don’t ever make any money at all. Hopefully you have personal savings to pay living expenses while you wait for your business to be successful, but you’ll still want to be frugal and conservative with your dough until your business is established and profitable. If you’re accustomed to earning a six-figure income, taking clients to a five-star restaurant using your corporate American Express and golfing every Friday afternoon, you’d better be prepared to face a major lifestyle change when you open your business. Unless you have a trust fund to supplement the income from your new endeavor, money is going to be tight. And golf? You probably won’t have much time for a leisurely golf game in the beginning. And you may miss a few family outings.
6. Do I have support from my family and friends?
Starting a business is exhilarating, exciting, liberating and… hard. There will be many times when you feel overwhelmed and exhausted. You’ll question your decisions and wonder if it’s time to give up. These are the times when you really need support from family and friends. Make sure you have a least a few go-to people that you can call when you’re feeling down.
Your friends and family also need to realize you won’t have the same amount of time to spend with them once you start your business. Your first several months will probably require 50-60 hours of work every week. This means less time to spend with loved ones. If the people in your life are supportive, they’ll understand and do everything they can to help you instead of complaining. In return, you’ll want to try your best to balance your new business with your important relationships.
What other questions should people ask themselves before starting a business?