I`m thinking of starting my own business, what do I need to consider?

I will assume that you have an idea about a product or service, as this is always the real starting point that fuels the desire to work for yourself. From that point, it is often around research to give you confidence that the idea can work as a business for you.

Starting a new business is both exciting and rewarding, but it is also full of challenges. The level of commitment that you will need should not be underestimated.

The success of your business will partly depend on your attitude and skills. This means being honest about a range of issues – your knowledge, your financial status and the personal qualities that you can bring to your new business.

Dedication, drive, perseverance and support from family and friends will go a long way towards transforming your business idea into reality and will be especially important during the early days.

I hope my free resources will help you decide whether you have what it takes to set up a new business. My free resources in this knowledge base, videos and podcast, look at some of the day-to-day realities of starting a business and outlines the skills and qualities that you will need.

Setting up your own business requires your full commitment. The physical and emotional demands of starting up in business should not be underestimated. Starting a business is a life-changing event and will require hard work and long hours, especially in the early stages. There can be times of financial uncertainty and this may have a knock-on effect for both you and your family.

Setting up your own business means that you will no longer be able to take advantage of the usual benefits associated with a permanent job. Your family and friends should be aware from the outset of the effect starting up a business will have on your life and it is crucial that they are right behind you.

Research has shown that there are certain qualities commonly found amongst successful business people. A typical entrepreneur will have many of the qualities mentioned in my ‘Are you ready’ check list.

You will need to assess your skills. As a business owner you need core skills to execute your ideas to ensure that your new business survives in the long term. You should start by assessing your own skills and knowledge. This will help you decide whether you need to learn new skills or draw on outside help by delegating, recruiting or outsourcing. As a business owner you do not need all the skills if you can build a good team around you. You should draw up a training plan for yourself and any employees indicating the training and skills gap.

If you are going to start your own business, then time the change effectively. If you are employed, can you carry on in your job whilst you complete your research, undertake any training and finalise the plan to start your business from a running start.

Starting a business is a risky thing to do, so you need to understand the various risks at any early stage to help you decide if you are willing and able to take those risks

What is your Motivation ? What is the real reason you want to start your own business and what motivates you? Knowing, with clarity, your real reason why and your purpose will help during the entrepreneurial journey, especially in the more difficult times.

There are a number of personal reasons why people start their own business. Some see an opportunity, some suffer a personal situation such as redundancy or unemployment, whilst others have a family history of self employment or consider it as a way of earning their living.

What has made you decide to work for yourself?
What are your motives?

Thinking about your motivations can help you think about the goals you may set yourself and provides a measurement for success as defined by you and not as defined by others looking at your business externally.

Success means different things to different people.
You need to define what success means for you and this will certainly help you to find the ways to achieve it. If you do not know what you are aiming for it is unlikely you will ever achieve it.

Understanding your motivations will help you identify the real purpose of your business and its aims and objectives. So for example, if it is a bigger house for your growing family, then how will the business generate the cash for this?

Motivations such as “I simply do not want to work for someone else anymore” is not strong enough on its own.

Download my PDF with a few thoughts around potential motivations by clicking here.

You should also consider planning your exit from day one. You need to have a vision of your exit from the business, so that you get the timing right for you. Too often business owners say my business is my retirement nest egg, but in reality when they come to retire it may not be the right time to sell or the value may not be as expected.
So consider the need to groom successors and how to exit at your chosen time, not when other pressures may dictate. Then plan your business to build towards that exit plan. So if you want to sell for a £250,000 in 25 years time, what do you have to achieve in the meantime to get there?

Possible exit options include: your family succession, selling the business, flotation of the business, a merger or simply closing down the business.

Can you afford to start your own business ?

Are you a risk taker? They say all top entrepreneurs are willing to take risks. However these are usually calculated risks unless the business owner can afford the possible loss.

Starting your own business will always be a risk, as there are not such guarantees in life. So I recommend you review your personal financial position to ensure that you can afford to start your business.

Firstly I would recommend a review of your personal assets, especially your liquid assets such as bank or savings accounts, shares etc, so you know you have back up resources if it takes longer than planned to get the business off the ground.

Click here and check out this template to help this consideration.

I also offer a template for considering your personal survival budget. This is the minimum figure that you need the business to earn for you each month to ensure that your personally survive. It is no good running a business that breaks even without providing you with cash or a return to achieve the motivation and reasons you started in business. 

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