Unfortunately, starting a business can be seen as a leap of faith. It isn’t a given that you’ll be successful. It isn’t always a given that you will be producing a product or service that people are willing to purchase. However, it can be much less of an unknown if you conduct your research and prepare ahead of time. A well-researched business idea has much more positive potential than a rash one.
So, what if you’re considering quitting a full-time, permanent position with a guaranteed income to become an entrepreneur? What are some things you should consider? What type of research should you do? Is it wise to take that entrepreneurial leap of faith?
Here are some things to consider before you make the entrepreneurial leap:
1. Quit Your Day Job?
First, do you really want to quit your job? That may seem like a silly question, but you may miss your colleagues and the friends that you’ve made in the workplace. You may miss the routine and the consistent schedule that a 9-5 job affords you. Or, you may miss your accomplished title that you trade in for the new label of, business owner. Do a little soul searching and make sure business ownership is a road you want to go down, personally.
Examine whether or not you have time to do both, at least for a little while. You will need to make sure that you can give both your existing position and your new venture the time they need and deserve. It’s common to see burnout in the entrepreneurial world, and you don’t want to spread yourself too thin. So, while you may not want to quit your day job right away, will you have the time to dedicate to a time consuming new business?
2. Business Idea.
Then, take a look at your business concept. Is it good enough? Asking your friends and family what they think of your new business idea simply isn’t enough. Their opinions will be biased and skewed. You definitely want to be able to sell your product to more people than just your brother and Aunt Norma. I strongly encourage you to invest in market research. It is worth the money upfront to find out if people in the general public will be interested in your concept. If not, it can save you thousands that you might have spent getting a business up and running that won’t prosper.
Everyone believes in their own business idea, otherwise, you wouldn’t be reading this article or considering changing your entire life for it. Ask yourself these questions:
- What need does your idea meet?
- What problem does it solve?
- Who is your target market?
- Who are your competitors?
- Is someone else already doing this?
- What makes you different?
- Can you reasonably justify your investment?
Talk to professionals. Establish relationships with legal, accounting, and other business contacts; this will give you a leg up as you progress.
3. The Money Factor.
Now, for the conversation everyone hates to have, can you afford it? Launching a business can get expensive. Do you have a savings set aside that you can use to fund your start-up? Or, can you realistically expect to be able to survive financially without your regular income? New businesses rarely turn a profit immediately. Can you go without a paycheck for weeks or months? Are you confident enough in your business to take out a loan?
Layout a detailed financial plan. Research exactly what your expenses will be. How much will your website cost? What about packaging? Do you need to hire help? Don’t underestimate what you will need to pay out of pocket to get started. And, don’t be overly optimistic about what your income will be. A strong financial plan for the coming years will do you a lot of favors and could be the wakeup call you need when deciding whether or not to take the entrepreneurial plunge.
If you think you’re ready, it usually is a good idea to start part-time. You can keep some regular employment, a paycheck and even benefits while you launch your business and start to grow it. This is a common strategy. It can mean working many, many hours a week, but hopefully, in the end, it is worth the sacrifice.
Don’t make a rash decision. Think things through and write a detailed business plan. By researching your concept and potential competitors, you’ll be able to make more educated decisions about launching your own business. Business ownership isn’t for the faint of heart. It takes commitment, hard work, and long-term persistence. If you’re ready for the challenge, it can be a very rewarding leap of faith!
Originally published October 4, 2011. Content updated July 16, 2018.