Have you ever thought about being your own boss?
Many people have, there is a certain attraction to freeing yourself from the hierarchical and political pressures of an organisation and testing yourself and challenging your abilities in the commercial world. But have you honestly thought about what it takes, really?
A staggering number of businesses fail in the first 2 years, approximately 80%. There are so many factors involved in ‘getting it right’, including timing and good luck, few people get the balance right to build their dream business. Even the largest corporations rarely survive more than a normal life span.
Leaving the doom and gloom to one side, running and operating your own business has so many benefits, not least of all that you’re the master of your own ship, you reap the rewards from good decisions, you control your direction and you’re doing what you love. Its easy to see why the prospect is so attractive. It is also very attractive in an economic downturn when jobs are scarce and with fewer options, people turn to make a go of it themselves.
So why is running your own business so challenging? Well it takes a lot more than being smart or having a great product or service to sell. To successfully run your own business you must be across every aspect of the business from sales, production, research and development, administration, finance, human resources etc. Most people start a business highly skilled in one or two of these areas and are unfamiliar of or ignore the others. In your own business, this is not possible. You need to be across everything, and it is hard work!
One of the first basic errors people make is that they think if they’re busy, they’re making money. At the moment there is a spate of businesses running at a loss because they fell for that assumption. Being busy doesn’t mean you’re making money, the breath and air of the business is money, even with everything else running smoothly, failure to focus on this is a death sentence.
People also think that having a great product or service will ‘sell itself’, this is also a dangerous assumption. Commercial history is full of examples of the best product falling by the wayside to a poorer inferior product due to inadequate sales and marketing. It’s almost a case of not mattering where you or the service can or can’t deliver, it becomes a matter of if you can sell it. If finance is the breath, sales in the blood of the organisation, without it flowing the company will wither and die.
So what are the things you might consider before embarking on the road to entrepreneurialism?
This is our list of things you might want to think about.
1. You have to really, really want to, not a fleeting thought, an idea hatched with mates or a last option, you really have to want to run your own business. If you’re not 100% committed, don’t go there.
2. Do a finance course, learn about business finance and make sure you are fully apprised on all the intricacies; poor financial management is the cause of most business failures.
3. Businesses always have a ramp up period, you must start with a level of financial security that gets you through the first 6 to 12 months, if you’re starting with nothing, you’ll end up with less than nothing.
4. Have a basic understanding of business law, especially contract law.
5. Be very clear about your product or service, if you can’t define it clearly, your customers never will. What are you selling, what are the benefits, what does it involve, get it all sorted out early.
6. Have a marketing plan, you must fully understand who would by your product, how many people that involves, where they reside and what they want to spend. Understanding your target market is very important, otherwise you are flying blind. These days digital marketing is king, are you across that?
7. Build a great sales process, this is the life blood so it needs to be efficient, effective and easy.
8. Familiarise yourself with all the regulatory requirements of running a business, especially the ATO, ignorance is no excuse. There are many rules and regulations guiding small business in Australia, take time to familiarise yourself with them, you don’t need to be an expert, but you do need to be aware.
9. Be prepared to work REALLY hard, running your own business means you are doing everything and even when you start to employ people, you still need to be across everything. You can’t leave critical parts of your business in the hands of other people, its your business, the risk is solely your responsibility.
10. You must be prepared to be adaptable, things change quickly in small business, from customers, to competition, to employee, contracts etc. Accepting this is the case and building contingencies and addressing risk mitigation is important.
11. In small business you live and die on your last job, being prepared to do the best you can and, if you have employees, that they are motivated to doing the best they can everyday will help your business grow.
Good luck, it’s not easy running your own business, the rewards are definitely there for the brave, but it doesn’t come without risk, hard work and a very very steep learning curve.
We can help you manage your transition successfully. For a confidential conversation with a coach, please contact us .
About the Author
Peter James is a professional career coach, with expertise in the areas of strategic and ‘hands-on’ change management, coaching, group facilitation, leadership development and organisational design and change. Peter James is director at Career Life Transitions.
Dr Susan Roberts says: