If you’re going to start your own business, then you owe it to yourself to go about it the right way.
Starting your own business is a major undertaking, and if you’re going to do it, then you owe it to yourself, your family, and your future customers and employees to go about it the right way. And selfishly, getting the foundations right will improve your chances of success, too! So if you’re thinking about leaving your job to start your own business, then here are seven things that you can do before you leave to get started on the right foot.
Yep, these are listed in order of importance. If you’re married, then the number one thing to do is the one you’ve probably already done, and that’s to discuss it with your spouse.
Starting a business will inevitably have an effect on your spouse and any children you may have, so plan for that ahead of time. You may have to put in long hours, and the single-minded attention that a business often requires can make your spouse feel like they have to compete for your attention. Acknowledge up front that those will be challenges that you’ll both have to work through as a team.
And if your spouse has too many concerns and can’t get on board? Then honestly, don’t do it. Your business should support your family, not undermine it. But if you and your spouse can agree to work together to meet the challenges as they come, then proceed cautiously to Step No. 2...
The harsh reality is that small businesses don’t always succeed, and even the ones that do don’t always succeed right away. So you’ll want to be prepared to weather the effects of a difficult period for your personal finances.
Take an honest look at your finances. Have you been diligent about living within your means and putting aside some savings? A good rule of thumb is that you’ll want to have at least six months’ worth of your personal expenses in cash on hand so that you can meet your expenses as they come due even if it takes that long for your business to start generating revenue. Having that money in the bank will give you the peace of mind to be able to focus on growing the business.
But don’t just stop with the six-month rule of thumb. Remember that someday, you’re going to want to retire, and dipping into savings to pay your expenses and to invest in the business is going to put you farther away from that goal.
This is also an area where age is, sadly, a factor. The older you are, the less time you have to recover from a financial mistake before you might want to retire.
Now that you’ve planned for the downside, it’s time to start optimizing for the upside. Talk to family and friends about your idea and see what they say. They may have some constructive feedback for you that you can build into your working hypotheses about how you’ll get your business off the ground. Even better, they may know someone you should talk to, either for advice or as a potential customer, and an introduction may go a very long way to getting you off and running.
Getting one extra customer when you already have a lot to begin with is easy, but getting that first customer when you don’t have any is H-A-R-D. Take some time to think about who is most likely to be willing to buy from you early on and make them your initial target market. Are they going to want a top-of-the-line product or service with all of the bells and whistles? Or are you going to want the budget version? Where are they located? How might they prefer to be marketed to? What type of advertising is most likely to reach them?
Your answers to these questions are just hypotheses for now, and they can change as you gain more real-world experience with your actual customers, and that’s completely okay. The point is to adopt some working assumptions so that you can align your spending and operational decisions with them and also so that you’ll know when to pivot if any of these assumptions turn out to be incorrect.
Ah, yes, the business plan. The homework assignment for those of us who thought we’d long since left homework behind. The business plan is a very important part of starting a business, but not necessarily in the way you might think.
Don’t try to write a novel here. If you do, then after a lot of slaving away over a computer screen, you’ll produce a 50-page, single-spaced masterpiece and still not have an actual business producing revenue to show for it. Used in this way, a business plan can become a gating item that actually delays you from getting your business off the ground.
A better approach to the business plan is to lay out section headings for all of the major topics that you know you’re going to have to think through and then write down, in as few words as possible, your current working theory for how your business will address each one.
Some of these initial answers will be wrong, and you can revise them as you go. You can also add more detail to these sections when you feel more confident that you’re truly on the right track.
It’s easy to spend a lot of time thinking about the big picture behind your new business because that’s usually the fun part! But come 8:00 Monday morning, it’s time to get down to brass tacks, and that means lots and lots of details. Spare yourself the frustration and feeling overwhelmed by the myriad of administrative tasks required to start a business by making an exhaustive checklist before you leave your current job.
This is the hardest part. Yes, it’s true that failing to plan is planning to fail, but too much planning leads to analysis paralysis. If you try to plan everything out in advance, then you’ll never actually take any action. So take care of the big-ticket items, acknowledge to yourself that you’ll never be able to plan perfectly for every possible contingency, accept the fact that what you’re doing carries with it some level of risk, and then take the plunge!
Easier said than done, right? Yep. Especially when we don’t have any better of an idea what rocks are waiting for you below the surface than you do. But here’s one more thing that may help: If you take the plunge, then you’ll immediately be able to say that you’ve done something that many people are too afraid to do. Lots of people will respect the fact that you had the guts to take a risk, and even if you fail, then you’ll have gained a wealth of experience that will lead you on to your next opportunity. So the question isn’t what you have to lose if you fail but what you have to lose if you don’t try.