Becoming a business owner and an entrepreneur is an adventure into new, exciting territory. It takes a special blend of dreams, business sense and looking within for what matters most to you.
If you watch Shark Tank, you know that entrepreneurs go in front of the expert panel looking for funding. It’s great entertainment, but a learning opportunity to see if these entrepreneurs have matched up their dreams with a plan so that others want to invest in their new business too.
Now that I’ve been an entrepreneur for nine years, I get lots of calls for advice and tips on how to start a new business successfully. There is no one easy answer. But if you can answer these questions, it can help you make sure it’s not only the right decision, but the right time.
1. Why do you want to start a business?
Know the deep down, real reason you want create this new business. It must be more than a career or job you want to leave behind. Motivation comes from what you want, not just what you want to avoid.
Also, if you are looking for a completely flexible schedule because you’re in charge, or a quick financial payoff, talk with other business owners and get a realistic picture. Be honest with yourself and make sure your reasons will carry you through the twists and turns you’ll experience as an entrepreneur.
2. Why does the marketplace need your product or service?
Know why your new service or product will meet a need in the market. It doesn’t have to be a one-of-a-kind product, but know what will distinguish your business from the rest in very practical, real ways.
3. How will you get your clients or customers?
Determine where your customers will come from and how they will hear about your business. If you have a product or service that needs lots of customers to reach your financial goals, then you’ll need a high-volume marketing plan.
As an example, if you have a jewelry business or a retail store, you’ll need continued awareness by lots of people. In contrast, if you have a consulting or niche expert business, you may have a greater emphasis on growing key relationships with target clients and with those who you will recommend you.
How you get your customers and how many you’ll need drives the investment, how you spend your time and how long it will take to reach your income targets. This is fundamental to your plan and can help you confirm that your financial goals are realistic.
4. What will it be like when you have reached your desired state for the business? How long will it likely take to get there?
Dream. Know your north star. Your desired state must be unique to you, not just a revenue target. Write down what it will be like, what will be happening, and the evidence you’ll see. This vision will be updated over time, but think big and remember you will get there in steps. This clarity will help you make wise short-term decisions and stay motivated.
Also, consider transitioning into your new business by starting it while at your current job or before you finish school. If you know you’ll have a long ramp-up time, start as early as you can.
5. What financials are essential to make it work for you and your family?
If your best-case scenario in 2 or 3 years creates an income that won’t be enough, then you’ll have to adjust your plan. Also, what is the maximum you want to invest in the first 1 or 2 years? Can your business be successful with this investment? This seems obvious, but many new business owners haven’t really developed a realistic financial plan, which means you can end up someplace you never intended.
6. Who are your expert advisors to help you make it happen?
Last year I wrote about the need for a blend of advisors, or dream team, especially as a new business owner. Build relationships with multiple experts to advise you on marketing, the operational keys for running a business, the marketplace and include another entrepreneur who can be your wise counsel. Some may be paid advisors, but others can be mentors who offer you guidance.
This gap in knowledge was one of my biggest surprises because there was so much to know. At first, I didn’t even know what I didn’t know. Others were essential in educating me along the way.
7. If anything were to get in your way, what would it be?
Answer this honestly. It’s essential to know this answer so you can anticipate and plan accordingly.
I’ve heard answers like “my lack of knowledge about this market,” “my discomfort with selling,” “that I have no investment money,” and “second-guessing myself.” If you are about to start a business that will require selling your ideas or a product (and most do) and this makes you uncomfortable, you have some options: a) get help to dramatically improve your skills and your comfort level; b) partner with someone who does this well; or c) regroup on your plans. But don’t overlook this question because leaving this unaddressed will guarantee it will reappear again in the future.
This is not as tough as going on Shark Tank, but finding the answers will take some thought and some work.
Follow your dreams. Take risks. Be bold. But, also be smart, plan, and get the advice you need. It’s not one or the other. You can dream and plan! This balance of dreaming and planning is what successful business owners do.