Entrepreneurs come from all types of people, but there are a few attributes that all entrepreneurs share. If you are thinking of going into business for yourself, here are 10 questions you should ask yourself first.
1. Are you both willing and able to bear great financial risk?
Starting a business is a bit like having a bet with yourself. You bet tens of thousands of dollars that you can start a business and make it a success. If you win, you have your very own business and you get to work for yourself for the rest of your life.
If you lose, however, you could be losing tens of thousands of dollars and you may have to file for bankruptcy.
And the cards are stacked against you: roughly half of all startups close within five years.
You’ll need to consider just how much money you’re going to have to put up and how negatively losing that money will affect you. If you will be completely ruined by the loss of the startup capital and you aren’t willing to go into bankruptcy.
(And it’s going to be monumentally difficult to find financial backing from investors or banks for your first go ’round at starting your own company.)
2. Are you willing to sacrifice your lifestyle for potentially many years?
If you are used to having regular working hours, steady paychecks, employer benefits and consistent paid vacation, then starting your own business could come as a rude awakening. New business owners typically work 60+ hours in a week and they often forego paying themselves a steady income until the business is financially stable, which can take several years.
Could you live like that for years?
It’s also difficult for new business owners to truly take a vacation from their venture. They often have to stay connected to the business until they can establish a trusted team to run things while they’re gone.
3. Does your significant other support you?
Whether your venture is successful or not, it will take a huge toll on your home life. Your family should understand the changes that will be happening in your life and theirs if you start a business. You will need to make a massive time commitment to the new business, plus your financial risk will also be your family’s risk.
4. Do you enjoy all the aspects of running a business?
An entrepreneur needs to handle every aspect of the business for the first little while. All the decisions and the management falls on their shoulders. That means all those menial administrative tasks have to be done by you now, until the business gets big enough to hire some employees.
Beware, though, that your employees may also not share your passion for the business. Choose them wisely, train them properly and try to infuse them with your enthusiasm.
5. Are you comfortable with making major decisions without guidance?
You call all the shots in your own business and you won’t have anyone to guide you. That may be difficult for some people who have spent most of their time in corporate structures where they always had someone to at least chime in on decisions. When you’re the top dog, every decision comes down to you, like it or not.
6. Do you have a track record of executing your own ideas?
Just because you have a great idea doesn’t mean that you’ll be good at implementing it. An idea alone doesn’t make a business. That idea takes drive, persuasiveness, leadership and intuition behind it to turn it into a reality. Take a look at your past and try to decide if you have that mix. Turning an idea into reality takes a lot of commitment.
7. How persuasive and articulate are you?
Entrepreneurship is about, above all, selling. You have to sell you idea to investors and potential backers, you have to sell your vision to your employees and you’ll have to sell your product or service to your customers. Strong communication and interpersonal skills are a must and you better not be afraid of cold-calling.
8. Do you have a concept you are passionate about?
If you want to start your business merely because you don’t want to be working for other people anymore or you simply want to make a lot of money, perhaps you are getting into entrepreneurship for the wrong reasons. People who are passionate about something and want to see it succeed at all costs are generally in a better position to make a company succeed.
Not working for others and making a lot of money are just bonuses.
9. Are you a self-starter?
Entrepreneurs face an uphill battle with many obstacles and doubters. Rejection and discouragement are just part of the game when trying to get a business going. It’s in the face of all this that you have to persevere to get a business up and running and make it successful.
Frankly, you almost have to be blind to risks so you can have that single-mindedness that you need to turn your business from great idea to realistic success.
10. Do you have a business partner?
It’s true that people who start a business with a partner have more chance at success, but it’s also true that partnerships can end badly if the partners step on each others’ toes. For a partnership to be successful, the people working together should complement each other.
For example, if one of them loves being the center of attention and is a real go-getter, that person should look for a partner who is more laid back and likes to be behind the scenes.
Becoming an entrepreneur will give you a sense of accomplishment like nothing else can. However, it comes with an immense amount of risk and requires an equally immense amount of commitment and dedication to your goal.
[Main photo courtesy of Mark on Flickr]