You have a dream.
Or maybe you’ve always had an entrepreneurial spirit. Or perhaps you are just sick of the rat race.
Whatever the reason, many of us have contemplated (or are contemplating) going out on our own to launch a business.
If that sounds familiar, you are not alone. There are more than 30 million small businesses in the United States employing more than 58 million people, which represents 47.5% of the private workforce. Source: U.S. Small Business Administration Office of Advocacy, 2015
Even with all of the people who have taken the plunge, there are still few decisions in life as nerve-racking as starting your own business. Understandably, most would-be entrepreneurs can become paralyzed by questions such as, “Am I ready to do this? Can I afford to do this? Will I be successful?” Too often, this is where people become stuck.
To help get unstuck, the following is a checklist to help determine if you are ready to launch your own business.
1. Do I know what I’m doing?
This is among the most fundamental questions that must be answered. Essentially, do you have the expertise and knowledge to successfully launch your business idea? Whatever the service or product you plan to sell, are you an expert in it? Do you know it like the back of your hand? Are you good at it? Are you known for being good at it?
If you simply have an interesting idea for a startup but don’t actually know much about it, you might want to take a pause. For example, just because you like to eat sushi doesn’t mean you should open a sushi restaurant. It can take years to become an expert sushi chef, let alone a successful restauranteur. Ask yourself, “Would I buy the product or service I want to sell?” Be honest with yourself. Make sure you have the depth of knowledge to successfully launch a business before you start investing time and resources in it.
2. Is now the right time?
Beyond having the appropriate experience and expertise, aspiring business owners should ask themselves about timing. Perhaps you’ve only been in your chosen profession for a few years. Do you know enough about your field? Do you have the credibility and enough professional contacts to launch a business now?
Consider your family situation, too. Do you have young kids at home? Are you expecting to start a family soon? Are you caring for aging parents? Needless to say, all of that can put demands on your time that can make launching a business difficult if not impossible.
Also, consider the broader economy and business climate. Is the industry you want to enter experiencing growth? Does the competitive landscape in your market support another entrant? Do you have the funds to invest in the business? Prepare to be patient if now is not the right time.
3. Do I have the right credentials?
In many professions, having the right credentials are table stakes for getting into the game. Do you need specific licensure or certifications in order to open your business? Explore what is required in your industry. Also, determine whether you have the right level of education to be considered a serious player in your field. Perhaps you would benefit from an MBA or PhD. Give yourself the best possible chance of success by earning those degrees prior to launching your business.
4. Have I built my network?
You may be going out on your own in starting a business, but you should be far from alone. When launching a business, you will need a network of professionals to guide you along the way, potentially including lawyers, bankers, small business consultants, commercial real estate brokers, PR consultants, web designers, social media experts, and more. They can help you determine what is feasible and the progression of necessary steps in order to launch your business.
You will also need the support of family, friends, and co-workers (past and present). Connect with those people early on to let them know what you are planning. Ask for their help. Referrals and new business often come from those closest to you. More often than not, they want to help and can be your strongest ambassadors to spread the word about your new business. Activate them to generate buzz for what’s to come.
5. Have I perfected my elevator pitch?
Throughout the lifecycle of your business, you will hear this question a million times, “What business are you in?” Every time that question is asked, it is an opportunity to sell. Don’t waste that opportunity. Perfect your elevator pitch to describe what you do as succinctly and persuasively as possible. Avoid jargon and corporate speak. Practice on your family and friends to ensure your pitch is as clear and compelling as possible. Hone your pitch until you can repeat it in your sleep.
6. What does success look like?
Every business plan should have goals and objectives. In other words, what does success look like? Clearly define that early on. Success can be monetary, such as specific revenue targets. But it can also be defined by impact and people reached, such as with a nonprofit or advocacy endeavor. Be disciplined in keeping yourself on track to meeting those goals. Be prepared to pivot along the way if you are not. Have the courage and wisdom to pull the plug if your business is not meeting its goals. Failure is part of business. If it happens, treat it as a learning experience for launching your next endeavor.
7. What’s the long-term vision?
As all-consuming the launch of a business can seem, don’t take your eyes off your long-term vision, including the inevitable exit plan. Where do you want your business to be in 5, or 10, or 20 years? Do you have aspirational goals to eventually grow the list of products and services offered, or maybe expand into new markets? Include those goals in your planning and continually revisit them to ensure you are on track.
Do you want to sell your business one day? To whom? Do you want to pass it down to your kids? Do they know that? Do they want it? What is the legacy you want to leave behind? Those are all questions business owners should ask themselves right from the start. Think about your new business holistically—its entire lifecycle from beginning to end—and give yourself a roadmap to lasting success.
Prepare yourself to successfully launch your own business with a Self-Designed MBA from Capella University.