While most people like the idea of starting a business, many have no idea what's really involved, and relatively few will actually take the leap of faith or do what it takes to succeed. It's not easy to champion a business. It's challenging to plot your way through the maze, especially if you've not done it before. Here are a few questions that will help you navigate the hurdles to opening day.
Are you ready to run a business? For the most part, your business' success will depend on you. Do you have what it takes to succeed as a business owner? Will the business bring in enough money to support your personal financial needs? Is your family ready to support a crazy, fist-clenching entrepreneur? Are you ready to live with the risk a business will bring? A few moments of reflection will let you know whether you're on track and what you need to do to prepare to run a business.
Is your business idea feasible? Is your idea really a business or is it just a hobby? Do you see examples of similar businesses in the marketplace? The fact that a business exists or occupies an office doesn't necessarily mean it's successful. Business success takes many forms-paying the bills, fair treatment of employees, creating satisfied customers, providing a valuable service to the community, not mucking up the environment, and profitability. Will your business pay you enough to survive and earn a profit? If not, perhaps it's just a hobby.
Will your concept work in the marketplace? To figure this out you'll need to develop a business plan, a task best done by the one taking the risk--you. The business planning process will guide you to understand the industry you're getting into, to clarify which products and services you will offer, to be an authority on your customer's needs and wants, and to determine whether you've got the right attitude and experience to run the business. While it may seem like a lot of work, a business plan is a great way to prepare for the rigors of business and it will definitely save you from making a lot of costly mistakes.
Will your business make money? As you learn about your business, you'll gather the information needed to forecast your sales and expenses. A necessary part of proving your business case is determining whether or not the business will earn a profit. A sound financial plan should include a sales forecast, a cash flow forecast, and a pro forma (future) income statement. The sales projection tells you how much revenue you can expect. A cash flow forecast clarifies what your expenses will be and whether you need a loan, while the income statement tells if the business will be profitable.
While many people dream of owning a business, only a few are really prepared to jump in. One of the biggest benefits of owning a business is the joy of working at something you love to do. At the end of the day, when the dust settles and all the numbers are in, the most important business question we all need to answer is, "Do you enjoy what you're doing each day?" If you can answer yes to that question, you're well ahead of the game. It's necessary to pay the bills and it's grand to earn profits, but if you don't enjoy what you do each day, is it really worth it?
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