You May Be Ready to Start a Business
What indicates your readiness to launch a business and possibly improve your chances of success?
By David Cox | January 22, 2019
Do you ever think about starting your own business? The thought of taking your idea, developing an initial concept, and launching a startup that becomes a profitable operation sounds exciting! It’s possible to succeed and eventually build a business that could be even more secure than working for someone else. However, in the field of business, realities are inescapable.
According to the Startup Genome Project, the percentage of startups that scale up too early could be as high as 70%. They also indicate this may explain the 90% failure rate among business startups.
If you scale up too quickly, it means you’re expecting too much progress, too soon. You may make a little money doing something you’ve enjoyed as a hobby, but that doesn’t mean you’re ready to start a business. Even if you’re doing something that’s starting to generate a “part-time” income, that doesn’t mean it’s time to quit your job.
You may be ready to start a business, if…
How do you know whether you’re ready to start a business? A couple of years ago, Sujan Patel, a co-founder of Web Profits and MailShake, contributed an article to Entrepreneur.com, in which he suggested the following nine indicators of readiness that could improve your chances of success:
You’re passionate about your prospective new venture
Passion is often overrated. It’s not enough to make your new business successful, but it’s essential to your enthusiasm and commitment.
You have a product or service with good market potential
A great business opportunity exists when what you offer meets a sufficient market of paying customers. Before you quit your job and start a new business, be sure that your product or service has adequate market potential. If a sufficient market doesn’t exist, starting a new business won’t change this reality.
I strongly recommend your startup plan include a professionally designed website. If you provide visitors with up-to-date, valuable information on how what you offer benefits them, it could help expand your market possibilities.
You’re ready and willing to learn
Some of the most transformational business lessons you’ll ever learn will come from your mistakes, but you’ll receive other lessons in the form of criticism. If you are resistant to these interactions, a successful outcome may be a long-shot.
You can face the fear of failure
The fear of failure can paralyze you in business. We all feel this fear to some extent, but if you can’t face it, you’re not ready to start a new business.
You have some financial savings
You can start some businesses with very little expense. However, it does take time for a new company to grow and become successful. If you have some money saved or have another way to access funds during your startup phase, you’re more ready than someone who’s drowning in debt, or whose back-up plan is purchasing lottery tickets.
You have experience within the industry of your startup
The more experience you have in the industry you’re going into, the more ready you are to begin an entrepreneurial venture. If not, consider taking a side job in this field to gain experience before you quit your current employment.
You have a lot of business experience
A great mechanic shouldn’t necessarily open a garage. There are many additional demands on business owners beyond simply doing essential, job-related tasks. If you already have a substantial background in business, you’re in a much stronger position to start your venture.
You’re good at managing your time, tasks, and schedule
People often want to start a business out of frustration (I don’t like my boss, I dread my daily commute, etc.). However, do you have the skills, capabilities, and self-discipline required to manage yourself? Starting a business demands self-discipline. If you know how to effectively manage your time, tasks, and schedule on your own, you’re much closer to being ready than if you need to rely on others for help with discipline and motivation.
You understand the risks of starting a new business
It’s possible that you’ll fail. It’s possible that you’ve vastly overestimated the potential of your idea. It’s possible that you’ll never be very profitable. It’s also possible (though unlikely) that you’ll grow so substantially, you’ll be overwhelmed. If you already understand those risks and know how to manage them, you’ve significantly reduced your learning curve for starting your new business.
If these indicators are positive, you may be ready to plan your venture and move forward. If not, consider them as prerequisites before you invest in launching your startup. These indicators are worth your consideration if you want to be among the 10% whose startups become successful and eventually provide a secure financial future.