There is certainly something enticing about becoming a business owner. With your own business, you can run things how you want, and you can grow personally and financially. While the learning curve may be steep at first, it is common for small business owners to wear many hats — manager, accountant, and salesperson, to name a few.
It can also be risky to start a small business. There is a possibility that your sales will be lower than expected or you will have to deal with unexpected expenses.
If you are planning to start a new business, write a list of the possible risks you may face in the first year of operation. To gain some insights, talk to your potential business partners or other experienced business owners.
Decide whether the risks are low, medium or high. Medium or high risks could cause your business to fail. Are the risks of starting this business worth the rewards?
Here, we discuss the reasons why you may want to start your own business and when you should get started on your entrepreneurial journey. We also highlight the important steps needed to become a business owner officially.
Important things to consider before starting your own business
Think about the timing
Even if you have a creative idea and the ability to work hard, it does not mean that now is the right time to start a business. Prior to becoming an entrepreneur, consider other aspects of your life, such as family concerns, finances, and the availability of team members who will play an important role in your company’s growth. Do not let your dream business fail because of personal issues, such as caring for an ailing parent or a new baby. The same applies to business partners who do not follow through with their promises.
Depending on your circumstances, you may want to postpone your launch for a few months until you are able to devote your full attention to the business.
Look at your finances.
Starting your dream business requires a financial plan. Entrepreneurs who want to start online or brick-and-mortar businesses must assess their finances and determine how long they can work without earning a living. Saving several months’ worth of expenses before quitting your day job will protect you and your family. The safety net you have during the early, stressful days of owning a business will enable you to take risks.
Startup founders also need to save money to cover operating costs. This includes expenses like marketing, sales, and product creation.
Examine the market
It is important to understand the state of the market you intend to enter if you are going to be successful with your business. Research the market and determine if there is a niche for your goods and services before you launch your startup. Your invention should fit into the market that already exists by considering what items your audience is already using. To ensure the best results, it may be necessary to adjust your product, audience or timeline.
Determine if your personality is a good fit
Entrepreneurship is not for everyone. It is important for startup founders to possess a natural talent for leadership, as well as the ability to communicate effectively with others. It is difficult to get people excited about your ideas if you do not know how to share them clearly and articulately. To achieve their goals, the best entrepreneurs collaborate well and know how to work in a team environment.
It is unlikely that even the most skilled startup founder will excel in every area. You can boost your odds of succeeding if you choose a second in command who excels at listening. Partnering and teaming up with people who complement your skills and support your vision is the key to success.
Consider your support network.
There can be a lot of stress associated with owning a new business. Thus, it is crucial for aspiring entrepreneurs to establish strong support networks. Be sure to discuss your plans with family and friends before starting a business so they can support you. You also should ensure that your significant other is on the same page as you. You can rely on these individuals during the early days of owning a business to help you maintain a healthy balance between work and life and to support your mental health.
Startup failure rates are high. Combining forces can, however, increase the odds of success for founders. The growth of a company with two founders is three times faster than that with just one, according to a recent study. Having a partner could be just what your business needs to succeed.
Reasons to start your own business.
Be your own boss
Whether it is on the personal or professional front, some people dislike being controlled by higher authorities. A lot of people find it difficult to accept not being able to make the final decision regarding business operations. Further, when an individual is constantly hounded by an annoying manager, their creativity and professional space are compromised, and resentment grows towards someone having authority over them. Those struggling with this situation can only succeed by being their own boss. Entrepreneurship is the perfect career choice for those who dislike being governed or managed.
Become the CEO of your company, and you will be responsible for all your company’s successes and achievements. There is no one to answer to, and nobody will claim your accomplishments. It is important to remember, however, that authority comes with responsibility. In your role as a business owner, you will have to train and teach people.
Turn your passion into profit.
Having a business is risky, so when times are tough, remember why you are doing it.
25% of businesses fail within the first two years. This shows that the first few years of a business are difficult, which is why passion is key. During times of doubt, keep these benefits of starting your own business in mind:
- There is something personal about it — you get to devote your time and energy to something you enjoy.
- Self-actualization — you are able to build your own vision instead of relying on someone else’s.
- Watch it grow — seeing your creation grow from an idea into an empire is an incredible feeling.
Try new ideas
Innovation is always a priority for small businesses and startups. There is an openness to taking risks and testing new ideas, but this is not necessarily the case in big companies. In large organizations, a successful formula means they are generating good profits, so they tend to stick with it. Because of this, they rarely experiment or try new things.
You can become an entrepreneur if you have new ideas and are eager to try them. Why is that? The benefits of entrepreneurship include being innovative and following your passion, even if that means taking risks.
Being your own boss and being able to run a business the way you want is something only entrepreneurs have the privilege of experiencing.
Initially, there may be frustration, disappointment, and failure, but if you keep trying and stick to your plan, success will most likely follow.
Bring about change
Not only do entrepreneurs strive to change their lives, but they also strive to make a difference in the world. With their innovative business models and discoveries, many startups in recent years have contributed to social causes.
The small gestures and efforts entrepreneurs make can have a significant impact, whether they are developing useful products or donating a portion of their profits to charity.
Related: 9 Steps to Start a Charity
There are many benefits small businesses provide to the community, from creating jobs to contributing to GDP. Start a business and prove your entrepreneurial skills if you would like to participate in such great initiatives. As a business owner, you will make a difference in the lives of many and bring about global change.
What is the right time to start a business?
There is no perfect time to start a business. The “right time” has to be created — for only you will be able to make it happen — and if you wait for the perfect moment, you may be waiting a long time.
So, how do you go about turning your dream into reality? Start by embracing the possibility of failure. Entrepreneurs often think the biggest barrier to starting a business is time or money, but the real reason is fear of failure.
A person’s attitude and response to failure is a big indicator of their success throughout their life. Initially, fear of failure can be debilitating, but it does not indicate weakness, incapacity or worthlessness. You can use failure as a tool for growth if you can change your mindset.
Almost every successful entrepreneur has experienced failure on their path to success. The mistakes you make can teach you a lot, so learn from them.
How to start a business in 13 steps:
- Come up with a business idea. Expertise, commitment, and capital are all factors to consider. Most small businesses can be started at home and have low startup costs.
- Prepare a business plan. Preparing a strong business plan is essential for success.
- Decide on a business structure. Taxes, liabilities, and other legal issues can all influence the structure of your business.
- Obtain a federal tax identification number. For filing taxes, opening bank accounts, and performing other essential tasks, you need a federal tax identification number — also known as an employer identification number (EIN).
- Set up a business bank account. Setting up a separate bank account for your business is an easy way to stay on top of your books.
- Obtain funding for your business. Grants, loans, and other sources of financing may be available to you if you do not have the money to start a business. Check out your options and what you need to do to qualify.
- Obtain a business credit card. You can use a business credit card to keep your personal and business finances separate, as well as to purchase supplies for your business.
- Design and build a website. For many businesses, having a strong online presence is essential.
- Set up a payment system. You will need to have a merchant account and a payment processor if you accept credit and debit cards for your business.
- Invest in the right financial software. Keeping track of your profits, tracking your performance, and running your business efficiently will require some tools.
- Recruit and hire employees. As your business grows and expands, you may need to hire employees.
- Be sure to pay your taxes. As a business owner, you will face some new tax obligations, but you will also benefit from new tax breaks.
- Make sure you have business insurance. The purpose of business insurance is to protect your business and your personal assets.
Do you need certain skills to run a successful business?
A successful entrepreneur will be able to overcome the daily stresses of running a business by learning more, which will lead to a more successful organization. You will be more confident when you master several key skills.
Are there any skills you should learn? While you likely have an area of expertise already, you will need to learn a lot more. To run a successful business, all entrepreneurs need at least a basic understanding of several important capabilities.
If you are thinking about gaining new skills to make your business venture a success, consider these key areas:
Sales:
Sales is arguably the most important skill on the list and cannot be outsourced. You cannot be an entrepreneur if you cannot sell your product or service. There is more to it than just closing a deal. Early on, most businesses’ sales come from word-of-mouth, so relationships are even more important than closing.
Digital marketing:
Although we live in a modern world, digital marketing is not necessary when starting and growing a business. However, you will need a strong financial base to achieve the growth and stability you desire. But if you did want to give yourself an even better chance of exponential growth, you can invest in digital marketing. The first step in this process is to build a website that works. It will also require knowledge of basic SEO, social media, and how to run digital marketing campaigns like Facebook advertisements. As your business grows, you may be able to outsource this. However, to properly manage it, you will still need some knowledge of digital marketing. This work will likely be much of your responsibility at the beginning.
Accounting and budgeting:
Any organization, particularly a new organization, relies heavily on finance. Your business will not succeed if you do not know how to manage money effectively. Having a basic understanding of accounting and budgeting will help you avoid failure. Founders also need to know how to raise money, either from venture capitalists or banks. The process might be outsourced to some degree as your business grows, nevertheless, it is important to understand how your money is handled and how much leeway your business has.
Managing employees:
You will need to manage employees if you want your business to grow beyond yourself. The importance of this skill is arguably even greater for a small business leader since there is no room for error. You can sink a startup business if you do not have good management skills. One thing that can help with learning this skill is getting some type of degree in business administration. For example, the bachelor’s in healthcare administration from Central Christian College of Kansas Online can help you develop effective communication and problem-solving skills in a healthcare setting.
Time management:
Do not dismiss this as a soft skill. There is a temptation to work all the time when starting a new business. However, that is not a sustainable solution. Most entrepreneurs manage their time effectively by focusing on high-priority tasks and unplugging them every so often. Your time is the most valuable resource in your small business. Using that time effectively will determine how successful your business will be.
Resilience:
You cannot run a successful business long-term if you do not have the skills to endure and learn from failures. Having a growth mindset is key to dealing with failure. Instead of viewing failures as such, it is crucial to see them as opportunities for learning that lead to future success. You have essentially set a limit on how big your business can grow if you consider failures the limits of your capabilities.
Is entrepreneurship in your future?
Whether you want to pursue starting your own business will depend on your risk tolerance and resilience. But it can be done if you have the patience, time, and energy to put into it. Running a business involves a lot of learning. Everyone learns the key skills of entrepreneurship over time — nobody knows them all right away. Successful long-term entrepreneurs recognize their weak areas and spend time improving them.
