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If you’re unemployed, underemployed, or unhappy, the idea of taking control and becoming your own boss may seem pretty sexy right now. In addition, the past decade has shown us that jobs are not as reliable as we may have thought before.
However, the success rates of new businesses are also quite frightening, with the majority of all new businesses failing in just a few years. While there is never a “sure thing”, if you are thinking of quitting your job to hang your own shingle, preparation has important benefits. before you make the jump.
Here are nine ways to make sure you’re ready before you start your own business, to give yourself the best chance of success. These are adapted from my hit book, The equation of the entrepreneur.
1. Define and assess your goals.
You can’t find a way to get somewhere if you don’t know where you want to go. Additionally, once you have this goal, you need to know if your path is the most direct path to reach what you want.
Related: The Pros and Cons of Starting a Business While Working Full Time
Ask yourself tough questions about why you really want to start a business. Are you looking to get rich quick? Do you want to showcase your talent, your new product or service idea? Are you tired of your boss taking credit for what you do?
These types of goals can lead you down the wrong path. On the other hand, if you like the idea of managing an entity, if you like to create systems and procedures, love to serve customers and if you thrive in wearing many different hats and balancing responsibilities, entrepreneurship could be the perfect path for you.
2. Hide money.
The cost of starting a business in many industries has dropped significantly. However, this is only part of the story. Businesses often take a few years to build a solid foundation, so you need to have enough money to start the business, run it while it stabilizes, and be able to live.
If you don’t have the money yourself, determine if you have credible access to capital. The recession has made it more difficult to secure financing and you don’t want to be in a business for three months and have to decide to keep the business open or pay your rent or mortgage – it’s a losing proposition.
3. Get relevant experience.
Being able to manage employees and suppliers is the type of skills you will need to acquire before starting your own business. You will also need to know your industry inside and out, including things you may not know or don’t like, including marketing, accounting, etc.
You have no experience? Spend time working in a similar business, follow a business owner in your industry, or take a night and weekend job at a comparable business. Test the waters first with a test before setting up your own business.
4. Build your network.
Business sometimes comes down to what you don’t know, but who you know. If you don’t know many people or just haven’t warmed up your contacts for a while, it’s time to focus on building a solid network.
Strong relationships can provide valuable business advice and introductions to get you financing, pricing, more favorable terms and conditions from commercial suppliers and professional services. Connections are your best source of marketing and customer referrals, which is essential for a new business.
5. Know yourself.
Do you prefer the “status quo” and do you like to avoid the unexpected? Can you handle a life of ups and downs – including financial ups and downs? Could your savings and your bank account also manage financial lows?
Related: Why There Are No More LikendisLikes
If you are a person who likes stability and control, or if you prefer when things go as planned, a roller coaster ride for a new business may not be right for you. Be honest about your personality before you take the leap.
6. Visit your lawyer.
If you are going to start a business that is in competition (direct or even indirect) with your current employer or if you plan to call on previous customers or contacts, you may find yourself in a legal relationship, depending on the documents that you signed. with your current (or previous) employer.
Check with your lawyer to make sure you are clear or to find out what you need to do to avoid any awkward legal situation.
7. Follow the competition.
Before embarking on entrepreneurship, take a close look at the market and your competitors. Is your market saturated with successful companies? Is your industry strewn with so many bad companies that it has developed a bad reputation?
Good and bad competitors will affect the success of your business. You will need to market and market your business to shine above the good competitors and compensate for the bad.
8. Test the scalability of your idea.
The most successful companies rely on automation and delegation. Will other employees be able to do your job? If not, can you teach others what to do in an easy to follow format?
If your business depends on your skills and your skills alone, you could have a successful job, but this may not be the business opportunity you are looking for.
9. Sell first!
Too many entrepreneurs spend time and money building retail stores, making products or developing service offerings without really assessing the viability of the market. See if you can get interest (in the form of purchase orders, deposits, etc.) before investing too much capital.
If you have a lot of interest in your offer, there will be less risk in pursuing it full time. If you don’t get a shot, you may want to redefine your offering, price, or business model before investing your time and effort.
Putting time and effort in advance to stack the odds in your favor will help you avoid having one of these companies that ends up with this percentage of failures.
Related: 5 Ways To Move From A Full-Time Job To A Full-Time Startup