To have your own business often seems to be the ultimate. The grass is, however, not always greener on the other side. It is important not to be blinded by the potential rewards. Do you have what it takes? You need the right skills, determination, financial backing, etc. There are also several serious and potential fatal risks. The following tips act as a guideline before you start your own business:
- Make sure that entrepreneurship is for you. Entrepreneurship is not for everyone. If you feel safer in your comfort-zone and are risk-averse the chances are that you are better off where you are – nothing wrong with that. Entrepreneurship needs passion, a certain amount of risk-taking and the motivation and dedication to succeed when everything seems to be against you.
- Understand the risks. Financial risk, including potential bankruptcy, is a real threat if things go wrong. Less obvious risks include social-, career- and psychological risks.
- Build a support structure. To have your own business can be quite tough at times. The more support you have the bigger the chances of surviving these times. It is worthwhile to make an effort to get your family and friends positive about the business.
- Get the right partners. It is often not advisable to embark on a business on your own (or even impossible). Good synergy between partners can drastically increase the potential of a business. Unfortunately many business partnerships don’t work and are often disastrous. Choose your partners very careful and ensure that legal contracts are in place for any potential “divorce” in the future.
- Prepare diligently. To have your own business generally means a lot of hard work. This should start with a proper feasibility study and business planning. Is there a big enough gap in the market that your business can fill? How will you do it? How will it be funded?
- Be realistic. A new business is never just moonshine and roses. It tends to take much longer than expected to breakeven and it needs much more resources (especially financially) than normally planned for. Reflect this in your cashflow planning.
- Get expert advice. When you lack specific skills it is much cheaper to pay for it in the beginning rather than later when the business does not work. The advice of auditors, attorneys, bankers, consultants and other experts should be sought where applicable.