Someone recently called it the economy of the entrepreneur. We all know it’s not because the economy is booming. For many of us, forces have converged to prompt us to take our livelihood into our own hands.
Nothing spurs you into starting your own business like job loss, a frustrating, futile job hunt, or a general feeling of dread every morning when you wake up and head off to work. Micromanaging bosses, toxic coworkers, office politics, diminishing wages and benefits, a long commute, a desire for better work-life balance all can be motivators to take the plunge into entrepreneurship.
Or maybe you long to feel passion, purpose, and like you are making a difference? Sometimes, discontent, or a deep stirring of the soul, leads you to follow your bliss and take charge of your own destiny.
Perhaps you are at the contemplation stage, deciding if business ownership is for you, and if so, what should you pursue? Sure, the goal is to make money. But it takes the average business owner two to three years to break even and start turning a profit.
Some soul searching may be in store first: Would you do it for free? Does it involve a skill that comes easy or makes you happy? Are you willing to put in long hours without seeing immediate rewards? Do you have capital or investors for product development, inventory and overhead costs? Can you handle failure? Can you handle success?
For your business to have a fighting chance, it needs a solid foundation – grounded in reality and rooted in who you are. Consider your values, skills, passions, and your available resources.
EXPERTISE: Is there something you have always been good at, such as building or fixing things? Maybe you have extensive work experience in a particular profession or academic credentials behind you. Many people found themselves downsized during the Great Recession. Do you have highly skilled or specialized operational, technical, ethical, and leadership competencies? Can you take those skills and apply them to a new industry or do it on a freelance, contract or consulting basis? Computer programming, web and graphic design, financial and insurance services, social media management, marketing, event planning, carpentry, and many artistic professions lend themselves to this crossover. It may be a better bet than spending the time or money retraining for a new career or earning another degree, then finding yourself overqualified due to your education or underqualified because you lack experience. Many former journalists have made their way as freelance writers due to the rise of internet writing and blogging. Fewer companies want to pay for a full-time staffer, but they still need professional writers. You can do it from anywhere, with a computer and Internet, and virtually no overhead costs. Many photojournalists are doing the same by applying their visual storytelling skills and candid shooting style to wedding photography.
EXPERIENCE: It matters. It will make your life easier when you get into the day-to-day operations of running the show or seek out new clients. People want to hire someone they trust and feel confident can do the job. For example, you might have a passion for cooking and think it would be fun to open a restaurant, but maybe your background is in factory work. There is so much more to running a restaurant than knowing how to cook – from ordering food to hiring and supervising employees to managing food costs and paying bills. It takes a lot of less-than-glamorous grunt work, like doing dishes, taking out the trash, and dealing with unhappy customers. A better bet would be to get a job as a cook and actually work in a commercial kitchen, or start small by selling your baked goods or sweet treats at farmers’ markets or through other established businesses before sinking yourself in debt and signing a lease. Talk to others who are doing what you want to do and not only surviving, but thriving.
PASSION: It may sound cliché, but think about the things you have always enjoyed doing. Self-motivation and self-discipline go without saying when you are self-employed. There is no boss counting on you or write-up system when you break the rules or fail to deliver. What comes easy? What did you want to be when you were young, like as a 10-year-old? What would be your “dream job” if you weren’t worried about cost, practicality, what others will say or think? Is there a way to turn a hobby into a profitable business? Do you like working on cars, tinkering with wood, being outdoors or around dogs? Can you play an instrument – or fix them – act, sing, dance or model? Do you enjoy sharing your expertise or motivating others? Teaching, tutoring or coaching might be options. Anything from dog walking to house cleaning to exercising can be turned into a way to make money. Consider getting certified to teach yoga or serve as a personal trainer, or liability insurance to protect against possible lawsuits. Next, ponder this: “What would you attempt to do if you knew you would not fail?” Ask friends what they think you are good at. Make a list of ideas. Journal. Meditate. Consult with your spouse or parents, financial and spiritual adviser, all the people who know you well. Find what you love – what doesn’t feel like work – and explore how to create a cost-effective company. Then go for it.
PERSONALITY: What makes you unique? Are you a people person or do you prefer to work behind the scenes? Creative or technical? Type A or go with the flow? Do you prefer variety and flexibility or routines and a strict schedule? Don’t underestimate your quirky personality traits and work habits. These are unlikely to change even when you work for yourself. If you enjoy autonomy and freedom, consider a business that allows your free-spirited nature to flourish. For example, some people think it would be fun to open a high-end clothing boutique, flower shop, art gallery or antique store without considering they have to rent space, constantly buy and move inventory, and work in the shop if they cannot afford to hire help. Would sitting there for hours without customers drive you crazy with boredom? If you like a fast-paced environment where you can be out and about, being tied to a shop during regular business hours will probably leave you less than fulfilled. Those with no clue as to their work preferences and personality type might be wise to spend the time and money on interest inventories and career assessments. Many universities offer these free to alumni. Some of the more reputable ones include Myers-Brigg Type Indicator, Strong Interest Inventory and Clifton StrengthsFinder Assessment.
FEASIBILITY: For any venture that requires a loan or lots of startup costs, conduct a thorough financial analysis and develop a realistic business plan. Do your due diligence with market research. If 20 restaurants have failed in your small town but you want to start one, or you want to build pools in a climate with cool, short summers, the viability of such an idea really needs to be well-researched and driven by data. Visit your local chamber of commerce, small business administration or other economic development organizations to see if it’s worth joining or how they might help you. Can you apply for a small business loan or startup grant? Will they work with you to develop a business plan or provide consulting and support services? A small business owner must have skills related to strategy and marketing, managing employees and building relationships with clients, record keeping including how to bid jobs, develop binding contracts, bill and collect, budgeting and financial planning, and time-management and perseverance, just for starters. Do you have a support network? Do you have cash flow? Can you get financing through a bank? Are you willing to risk your financial future – or file bankruptcy in the worst case scenario – if it fails? How much money will it take to get the business open? How long are you willing to wait for the business to generate a profit?
Viable business opportunities often come down to identifying problems many people share and finding a way to solve them – or turning your talent into a service you can sell. There is no harm in dreaming big or taking risks. The beauty of business ownership is the possibility. There is no magic formula for success. Be prepared to hustle. Be prepared to be flexible. Be prepared to put in long hours. Be prepared to fake it until you make it and believe in what you are doing even when no one else does.
