By Noah Rue
Everyone’s road to entrepreneurship is a little different. For some people, they were born with the dream to someday own a business. For others, it might have happened by chance — their hobby simply became their career. Unfortunately, only about 18 percent of first-time business owners are successful, but that hasn’t stopped many people from trying their best. No matter what the story is, entrepreneurship is an exciting calling, and it’s something that spurs on the economy.
If you’ve been aching to start your journey into entrepreneurship, how can you be sure that you’re ready to start your own business? Even before you make your first sale or open your doors, what skills do you need to make your opening day as smooth as possible? Every business starts out in the red, but how can you make sure you don’t fall short and instead grow into a successful startup?
Let’s dive into what it takes to be a successful first-time business owner — from creating a new frame of mind to essential steps before opening day.
Switching From Employee to Entrepreneur
Jumping into entrepreneurship is no easy task. There are so many new things you have to consider: from a newfound freedom to choose your own hours to suddenly being the sole person crunching the numbers, signing the checks, and getting all the necessary tax documents. A degree in business administration can help you build up the leadership, accounting, and planning skills you need, but not everyone has the luxury to go back to school. It’s a move that should never be taken lightly, and it will require a serious change in mindset in order for you to succeed.
There are parts of being an entrepreneur that many people don’t want to talk about, but you will suddenly have to face. So how, and where, should you start?
Let’s start with your mindset: being an entrepreneur requires a whole new frame of mind. You will have to become a jack-of-all-trades as the sole responsibilities of the business will fall on your shoulders. Anything from paying the electrical and internet bill to solving security issues and stocking shelves will suddenly all be left up to you. You can no longer notice a problem and think “I’ll let someone else deal with this” — because if you don’t, there’s literally no one else who will.
You will also need to become extremely flexible while keeping a very positive attitude. You will be faced with many challenges on this road to building a successful business, and you have to let your passion for your work motivate you to continue through. If you let yourself get discouraged, you will fail. As an employee, having a bad day may still result in a paycheck, but as an entrepreneur, a bad day could mean no money for yourself and your employees. Be prepared for those challenges, and be sure to develop plans to help you prepare.
Health Concerns: Financial and Personal
It’s important that you weigh the pros and cons of becoming an entrepreneur and consider all the hidden costs that come with this new challenge: lack of sleep, rollercoaster of emotions, and making a lot of personal sacrifices (among other things). Unfortunately, to really get off the ground, you may have to make some difficult decisions that might later haunt you. Are you ready and mentally prepared to make those sacrifices?
It’s also important to keep in mind the risks that small businesses are exposed to in those earliest months — mainly severe burnout among staff and any potential financial risks. Your business is most at risk for failing in the first year, and it’s important that you keep the mental and physical health of your employees in mind, as well as the financial health of the overall business. Without your employees and without funding, your business could be lost.
Additionally, you may start feeling burnout within the first year due to chronic stress, and it’s important that you keep in mind ways to combat those feelings of anxiety, depression, fatigue, or frustration. Although you may have to make sacrifices as an entrepreneur, you can still ready yourself by regularly seeing a doctor or therapist — anyone that can help you navigate your stress and monitor your health. Without your body and mind being at 100 percent, you won’t be able to work at 100 percent. Stress may be inevitable, but that doesn’t mean you have to let your personal health suffer simply to be successful — although many people may tell you otherwise.
Building Your Plan
Once you’ve gotten your head in the game and you’re ready to push through, you’ll need to make a plan. The best thing you can do is start small: If you have to keep your day job to get you through the first few months of your business, then do it. As alluring as it may be to “take a leap” into entrepreneurship, that idea is no doubt why so many startups fail in the first year. You need to be strategic about your plan and your finances.
Create both a long-term and a short-term plan. That way, if things start going south within the first year, you’re prepared to do what you need to in order to salvage the business or your own money. Month over month, come back to your plans and make sure you’re still keeping your goals in mind and your finances in check. If needed, you can remain flexible and make adjustments.
Your business plan, whatever it may be, should have all your goals in mind as well as a clear vision on how you hope to achieve those goals. Unless you’re the only one working in your business, your goals should be easy for other employees to understand. You should also start thinking outside the box: You’re no longer a corporate employee, and you have the freedom to decide what is most important. Isn’t that exciting?!
Creating a business plan takes more than just writing down some ideas — you’ll also need to think of how you’re going to market your business, how you’re going to get financing, who you’re going to hire, and who you’re going to work with in order to complete projects. There are many different aspects that go into a successful business plan, so do your research.
If you really want your business to survive that difficult first year, then you’ll want to think sustainably about how to operate your business. Consider some shortcuts you can take that will help keep your budget down.
For example, your business might need a location, but how can you cut back on location costs? Perhaps you can find a coworking space that allows you to share the building with other businesses. Maybe you could move to a less expensive town and try there. Perhaps there’s a smaller venue you could start in, and then grow into a bigger space when you have the money. Or even better — don’t get a space at all and just work off the internet. E-commerce is always growing, and the internet can create some devoted followers.
There are plenty of other sustainable options for small businesses, like contracting with workers instead of hiring people outright, or utilizing third-party online services (Etsy, Ebay, etc.) to start building your brand. There’s no reason you should go all out in the first year unless you really have the money to spare. Thinking sustainably can really save you in the long run by conserving your energy, money, and time.
Finding Connections and Funding Through Networking
One of the biggest assets within your first year will be your network of connections. Your network can get you anything from employees to funding. If you haven’t already started networking within your niche, then there’s no time like the present.
Whether it’s going door to door and introducing yourself to the neighbors or going to big conventions with like-minded and eager entrepreneurs, there’s no shortage of networking opportunities out there in the world. Even participating in the annual “Small Business Saturday” that American Express throws every year can help you find connections and network with other businesses in the city.
However, where networking really comes in handy is when you can use it as a valuable asset for education and funding. It’s through networking with other professionals that you can learn about common mistakes and how to overcome them. You can learn from the failures or shortcoming of others without actually falling into the same trap yourself.
When it comes to funding, it’s always good to have backup funding options, and networking can provide just that. Even if your first year is rough, you can utilize a backup option to help you get through those initial rocky months. Keep in mind, some funding options may not be available to you, depending on your first year of sales: if you have a bad business (or personal) credit score, or you have asked for a tax extension for your business, then a loan from the bank might not be available. However, angel investors, loans from family or friends, or crowdfunding may be an option for you — all of which will only be possible with positive networking.
Before You Open Your Doors …
Starting your own business is an exciting time in your life, but there are many challenges ahead. Before you can start off on your entrepreneurial journey, you have to make sure you have the mental and financial fortitude to make it through your first year. Networking, thinking sustainably, and building a solid business plan are all essential steps to help you get on the right foot, but it’s also important to remember to take care of yourself. That first year is always the hardest for business owners, and if you want to survive it, you’ll need to make sure you’re prepared for the sacrifices ahead.
Becoming an entrepreneur is no easy feat, but the rewards down the road may far outweigh the challenges ahead. Prepare, research, and get excited to see your goals turn into a reality!
Noah Rue is a journalist and a digital nomad, fascinated with the intersection between global health, personal wellness, and modern technology. When he isn’t frantically updating his news feeds, Noah likes to shut off his devices, head to the beach and read detective novels from the 1930s.
The post New Year, New Venture: Are You Ready to Start Your Own Business? appeared first on SmBizDaily.