A checklist to when you should or shouldn't start a business
Regardless of whether you want to run a small business on the side or quit your full-time job to build a self-employed career for yourself, starting your own business can be a life-changing decision.
There are many reasons that motivate new entrepreneurs to pursue their dreams of launching a profitable company. Some reasons are better than others and, truthfully, some reasons are downright bad.
Before making a decision that is difficult to undo, it’s important to ask yourself the difficult questions and go through your underlying motivations for starting a business before making the leap.
In doing so, you can protect yourself from unnecessary risk and you may just confirm to yourself why you should definitely become an entrepreneur.
Make your way through this list of right and wrong reasons to start your own business. And by the end, you’ll know if the entrepreneurial lifestyle is for you.
The Best Reasons to Start Your Own Business
Experienced entrepreneurs know not to force a new business idea, simply because they need something to do. The best business ideas arise out of a genuine need for something meaningful in the marketplace, and entrepreneurs that acknowledge this truth will train themselves to become hyper-aware of potentially profitable business ideas within their areas of interest.
1. You’re Moving to a New Opportunity, Not Running From an Old One.
A new business opportunity, perhaps in the form of an unserved need in the marketplace or a new technical innovation, can be a good reason to start your own business, as long as the opportunity is real and you are not exaggerating its value as an excuse to escape your current employment situation.
2. You Have an Idea That’ll Actually Deliver Value for Your Customers.
At the heart of every strong business opportunity is an idea that will deliver value to your customers. In other words, if you have an idea that a sizable number of customers are willing to pay for, you have a good reason to start your own business.
3. You Have a Business Idea You’ve Already Validated.
Perhaps you’re sitting on a tested prototype, the results of a consumer survey, or the anecdotal evidence from years working in a corporation, suggesting that there is a true need for the product or service you have in mind. These types of validations are great reasons for moving forward with your business plans, while failing to listen to feedback from your prospects can be disastrous.
4. You Believe Your Solution Can Achieve Something Unique.
If you see an unmet need or an unsolved problem in the market that you’re excited to take on, this is could be your calling. Perhaps no existing competitors address the problem as well as you can, or they only do so partially, leaving room for your superior service or product.
5. You Enjoy Learning by Doing and Taking on New Responsibilities.
As you start your own business, you will have to perform all the activities that in larger corporations would be divided between different people and departments. You will be the marketing, financial, sales, operations, HR manager and CEO. If you’re anything like me, you’ve never held most of these positions, so you will have to try new things, dive right in, think on your feet and learn as you go.
6. You Have Strong Optimism Toward Your Business Idea.
There will be times when others doubt you and the viability of your idea. That will continue on until the signs of your success are visibly apparent. Near the beginning, your own steadfast optimism is essential to keep you working toward your goal. Of course, your belief in the idea should not be unfounded, but powerful optimism in the face of challenges sets successful entrepreneurs apart from the rest.
7. You Won’t Accept Failure as an Option.
Your progress will initially be slow and uneven. New milestones will be followed by setbacks and your attitude towards handling these momentary road blocks will determine your long-term success.
If you refuse to accept failure and instead get back up on the saddle every time you fall down, you are well-suited to be an entrepreneur.
8. You’re Excited About Working Hard on Your Passion.
When you bring hard work and passion together, amazing things happen. Looking at successful entrepreneurs, you rarely find a case where the two don’t come hand in hand. History is full of people who tirelessly pursued their passion and created successful ventures.
9. You Have Experience From the Industry Your Business Will Be in.
Successful first-time entrepreneurs often start a business in a field they have experience in. For example, an industry in which they have worked in the past. If this is your case, you will benefit from having an above average understanding of the industry, markets, customers and competitive dynamics. These are all things that are difficult to match by industry outsiders, as you’ll be able to leverage existing relationships to speed up your progress.
10. You Have Resources Necessary to Turn a Business Opportunity into Reality.
Having an idea is great, but to start your own business, you need the relevant resources to turn that idea into reality. These resources can come in the form of financial capital, information, technical know-how or valuable networks that’ll help you accelerate your success.
The Worst Reasons to Start Your Own Business
While there are certainly more reasons and use cases where launching a business wouldn’t be a good fit for your current state, here are some of the most common bad reasons I see new entrepreneurs starting businesses that are destined for failure from day one.
1. You Hate Your job.
You can hate your current job all you want, but it will neither add to nor take away from the value of the business you want to start. Actually, I recommend not hating your job and instead focusing your energy around, creating a positive solution to your problem of employment. When it comes down to it, your customers don’t care that you hated your old job—if they find little or no value in the products or services you are selling, they will not buy them. Leaving a job you dislike can be exhilarating, but make sure that you are replacing your job with a viable alternative that allows you to support yourself financially.
2. You Hate Your Boss.
Again, the decision to start your own business should be based on factors related to the business itself, the opportunity to create and deliver value and the possibility of you making it happen. Also, even if you decide to start your own business, thereby escaping an intolerable boss, you will still have to deal with other people, like customers and suppliers, who can be just as demanding.
3. You’re in it for the Money.
You’ve read about the entrepreneurs who sold their businesses and made a fortune. Of course, there is no reason why you can’t make that happen too, but you need to be realistic. There is a lot of hard work leading up to that money and the odds are that you won’t be making a billion dollar deal anytime soon. When you start your own business, you will face challenges that require you to have resilience, passion and stubbornness, not just the hope of making easy money.
4. You Want to Work Less.
Running your own business is time-consuming, especially in the beginning. You are always on call and can’t clock out from work at the end of the day like you can when you are employed by someone else. There is always work to do and you are the only one to make sure it gets done.
5. You Want More Flexibility.
Depending on the business you are starting, you can have zero flexibility or all the flexibility in the world. You might be able to compensate a lazy morning with an all-nighter, but if you are expecting to only work when you want, you will be disappointed. You may now be your own boss, but your customers don’t care about your wishes to sleep in or go on a two-week cruise in the Caribbean. Your customers will want what they want, when they want it and you need to put in place a system that meets their demands and set realistic expectations.
6. You Think Being an Entrepreneur Would Be Easier Than a Corporate Job.
The hardships you experience at work are a result of your job being just that: work. Sure, there are certain difficulties that are associated specifically with corporate jobs, but all jobs have their pros and cons – including the job of running your own business. Entrepreneurship may entail a different set of challenges, but it is in no way easier than having a corporate job.
7. You Only Want to Answer to Yourself.
As an entrepreneur, you answer to no one and everyone. You answer to your customers, your suppliers and employees. You also have yourself to answer to. This adds a whole new dimension of responsibility. Since you are your own boss, you can cut yourself as much slack as you want, but the effects of this will show in the success of your business, or lack thereof.
8. You Want to Have Fun.
Although starting and running your own business can be a lot of fun, you are bound to come across tasks that are tedious and times when the workload is overwhelming. To be a successful entrepreneur you will have to face both the good and bad with a relentless fervor.
9. You Want to Be Famous.
Building awareness about your company within your target audience is necessary, but if you are looking at publicity or marketing as your end goal and not a means to an end, you are making a serious mistake. Unless your fame is at the core of your business model, which it would be if you’re a rock star, any prestige and status you achieve is just a bonus. Being an entrepreneur is about building a successful business through creating and delivering value, not becoming a celebrity.
10. A Friend or Family Member Wants to Start a Business With You.
Just because someone you know or admire wants to work with you, doesn’t make a business opportunity instantly attractive. If the business idea is particularly ill-conceived the execution plan and resources to turn it into a reality are missing, there is no real business opportunity there. Furthermore, working with friends or family can be problematic, to say the least, although there are ways to make it work.