A lot of people for lots of reasons think about starting their own business at some point in their lives.
For some, it’s for the freedom to control their destiny. For others it might be because they believe that they can do something better than anyone else. And some think it beats trading their time for dollars for an ungrateful boss. Besides, how hard can it be anyway?
I recently counseled a family member who was thinking about going out on his own. So, we sat down and talked about a few things. We discussed what the initial capital investment would be and where that money would come from. We used our imaginations to suppose what the monthly bills would be. Rent, utilities, accountant or bookkeeper, legal matters, consumables, tools, etc.
Then the fun part was predicting how much money can be made.
His outlook was very rose colored. I proposed that we need to do a simple SWOT analysis — Strengths, Weaknesses, Opportunities and Threats. His strengths were the easy one. He is very good at what he does so that was no problem. Identifying his weakness like record keeping, planning, lack of overall business experience was a little more sobering.
Opportunities mostly amounted to anecdotal examples akin to “well so and so says if I had my own company, he would hire me all the time.” I explained how we needed a little more than that. How many projects are happening in the county that would use your business? Is the trend going up or down, and things like that.
Finally, we discussed the threats. That translates to competitors. Who is already doing what you want to do? How long have they been doing it? How much market share do they have?
Afterward we had a pretty clear picture of the pros and cons of what it might take to start a business. It was apparent to him that it takes a lot more just to get started than he had considered. We talked a little about how most companies fail in the first two years. That they remain unprofitable for three to five years. That your free time would no longer be your free time. Forty hours a week was going to change to 70 hours a week. And we hadn’t even discussed the stress of growth and employees.
I looked him in the eye and told him that owning your business would be one of the most satisfying and fulfilling things he would do in life. Not unlike having a child, starting a business, nurturing it and growing it into a success is a proud and amazing thing. And if he did it right, he would no longer be putting his potential and his financial security in someone else’s hands. He would be in direct control of his future.
He is now mulling his options, which include starting slowly and not quitting his day job to just the opposite, plunging in with both feet. Either way, I explained that doing a thorough business plan should be one of the first steps. You would not build a house without blueprints. Never start a business without business plan.
If you are dreaming about starting and owning your own business, take advantage of the free help you can get at SCORE. Our local volunteers would love to give you all the help we can and mentor you, so that you have the best chance of claiming a successful future.
David Titchenal is a member of SCORE, a national organization and resource partner of the U.S. Small Business Administration. Contact Titchenal at email@example.com.