We all know that statistics aren’t on our side when toying with the idea of starting our own venture. It takes unwavering belief in your product in order to plough ahead regardless. But do you have belief in yourself, too? Irrespective of where you are in the planning process, there are important factors to consider regarding your strengths and weaknesses that could make or break your venture before you’ve even begun. In order to give your start-up a fighting chance to succeed in a world where nine out of ten of them don’t, ask yourself these five questions to distinguish if you have what it takes.
1. Why am I doing this?
Be it passion for a product or just the lure of being your own boss, understanding and keeping in the forefront of your mind what motivates you will be an integral part of starting your own business, particularly when the pressure starts to mount. If you’re not even sure why you’ve started your own cafe, how will that see you through seemingly endless weekend working hours or drowning in a paper trail of produce orders that stretches to the edge of the galaxy? Try listening to the late Scott Dinsmore’s thoughts on the subject or journaling a few pages to try and figure out the deep-seeded purpose for your venture. This doesn’t have to be an exhaustive process: you might find this useful throughout the business to reaffirm your reason when times get tough.
2. Am I resilient enough?
25% of businesses fail within the first year, which says much about the resilience of the 75% of those that survive the precarious first 12 months. How will you cope when, say, the bank refuses your loan or your sales pitch gets criticised? In order to predict how you will fare in such a challenging environment, ask yourself this; how have you previously reacted to setbacks within your life? If you are someone who is easily discouraged when faced with disappointment, you need to seriously consider the likelihood of you throwing in the towel at the first hurdle. Try testing your resilience with this Harvard Business Review quiz and if you come up short, try building it.
3. Can I afford it?
The start up cost of a business is defined as the amount you spend before you begin turning a profit, so putting a blanket figure on how much a starting a business will set you back is an almost impossible task as each venture (and success rate) is so varied. While some research suggests it costs an average of USD$30,000, it is of course possible to start a business on much less, especially if your business will be home-based and requires minimum upfront investment. Try to calculate how much money is required to get your venture off the ground (this checklist of simple costs is a good place to start), taking into consideration expenses such as domain names, website design, market research and materials, etc. If once you have your estimate you realise you don’t have the funds, explore the idea of bringing an investor on board. (Don’t forget you’ve got to pay yourself too, if you’re jumping ship into your business full-time).
4. Am I willing to make sacrifices?
Cash isn’t the only thing you’ll have to sacrifice in the name of your start-up; you’ll be waving goodbye to your time, too. For a small home business with no employees, it could take approximately two months of working around the clock to get your venture up and running, after which you can look forward to working 60 hours per week; the average for entrepreneurs. As well as a healthy work-life balance, you’ll also be bidding adieu to stability; no more regular paychecks (or any paycheck at all, if you’re yet to make a profit), annual leave allowances or sick pay. Are these all sacrifices you’re willing to make? If you’re not quite sure, consider starting your gig as a side venture to determine just how much time and money will be realistically pooled into your new business.
5. Is now the right time?
While there will never be a perfect time to throw yourself into a start-up, proceed with caution if there are any factors in your personal or professional life that have the potential to affect the survival of your venture. Perhaps you’re in the process of starting a family, buying a house or have other pressing commitments that can’t be sacrificed at present. Will things be different in, say, six months time? If the answer is yes, put the project on hold in order to give your business the best chance it can of success.