Going Into Business – Is it Right For You?
Many of the queries my small business advisory practice fields every day relate to people, who for one reason or another, are considering going into business for themselves. Their first concern is usually about what business should they start, but really their first concern should be about whether they should go into business at all.
At first glance, this may seem a little harsh. In some respects, it is meant to be. Many of the people who ask me this question, are often in dead-end or personally meaningless jobs, or they are under financial pressure, and are looking for an escape hatch. As a result, their view of of what it means to go into business is tainted by the rose-coloured glasses they are wearing and their romantic notions about what working for themselves will be like.
This is typified by statements such as ‘I can get out of bed and work whenever I like’, ‘no-one can boss me around’, ‘I can have a day off whenever I choose’. It is not that these things are not noble pursuits, it is just that the harsh reality is before all that can happen, you usually have to have put in the hard yards. Many small business owners work extreme hours, under intense pressure, often juggling more than one role and usually for many years before they can indulge in such pleasures.
The last thing budding entrepreneurs need is to be discouraged, as there will be plenty of motivation killers amongst their families and friends. What they do need is some assistance with the removal of their rose-coloured glasses and the attendant emotion. They need the ability to see the situation as it is and tools to help them make decisions based on hard facts and not on emotions. It is important to assess, up-front, whether going into business is right for them, and if it is, that they then go into business right.
Undertaking a thorough and honest self-assessment can assist with this process. This assessment is not a test with right or wrong answers, so you can’t possibly fail. The goal is to assess what is right for you. Done well, a self-assessment will provide you with sufficient insight to determine whether going into business is not right for you, or that going into business may be right for you but that you need to put various things in place before you do so, or that becoming a business owner is an option for you.
A good self-assessment tool will attempt to capture your personal goals and aspirations, determine your chosen lifestyle choices and identify your current situation. It will also identify your personal strengths, and your current weaknesses against the core skills required for the management of any business.
This is important. Going into business can be a risky proposition. You need to go into business clearly having identified the areas of risk and to develop a plan to effectively manage those risks in order to increase your chances of long-term success.
For first time entrepreneurs, more often than not, the areas of weakness identified by the self-assessment usually relate to either currently being in a bad financial situation, or not having any financial management experience. The assessment identifies this as, not necessarily a pre-cursor for small business failure, but an area that requires managing to improve your chances of small business success.
If the the self-assessment indicates that the entrepreneur is in a poor financial situation, depending on the severity of the situation, it could be an indicator that going into business is not right – for now. Implementing a management plan to improve their financial position before they go into business is a better option. It may be more feasible to plan to save the cash required to support your business, and yourself before you start-up.
Should the assessment indicate a particular weakness, such as limited financial experience, it would be wise to put in place a management plan to shore up identified weaknesses. In this particular example, it may be that improving your skills and expertise by attending bookkeeping courses at your local community college or by having your accountant at your side to teach you how to keep your books. The end result is that you may not know how to keep everyone else’s financial records but you will be able to adequately manage and understand your own, thus reducing the ongoing risk to your business.
While it is important to encourage people to discover their ‘inner entrepreneur’, it is vital entrepreneurs do so while making every effort to minimise their personal risk as well as the ongoing business risk. Undertaking a thorough and honest self-assessment and using the insight it produces as the basis for the assessment, planning and management of all potential business opportunities is essential to the long-term success and viability of the business.
