Going from a regular civilian to being a business owner is a big step. It’s a dream for many, and there are plenty of success and failure stories out there to encourage and deter practically anybody. But if being a business owner is your goal and you have an idea that you think is amazing, you just might want to take the necessary steps. But before you do, there are some vital factors you need to consider:
Stress Test the Idea
There’s a process every single idea should go through before committing to it, and it’s called the stress test. This is an experiment where you get a group of competent people to actively try to tear down and find holes in your idea. If the idea can survive this, then it might just be the one you should move forward with. You want to find people who like to play devil’s advocate and let them tear up the idea.
It’s important to know that the goal of this isn’t to deter you from the idea, it’s to find the weak spots and see how they can be fixed and mended before you run headfirst into one of them with a lot of money already invested. We all think that an idea is good, but when it’s tested like this, we’ll see all the ways it can crack and become problematic. You might want to do several rounds of this test and tweak the idea in between until you get something nearly bullet-proof. Emphasis on the word nearly, because you will never actually get a perfect idea, and if you sit around waiting for one, you’ll just never get started.
So you have your best idea and now you want to run with it. But your idea is just one piece in the huge puzzle called the market. In the business landscape, you need to be acquainted with everything already out there and the trends that have passed. The best way to do this is to start networking. Reach out to relevant people in the industry in your area and talk to them about what is going on.
Don’t be scared that they will steal your idea or feed you false information. Healthy competition is good for the economy and most business owners know that. Get as much information about the market as you can and research any previous rises and falls to try and spot trends. If you see that it’s currently on a downward trend without any notion it will rise soon, perhaps it’s not yet time to start.
There is so much to be said in funding your first business. If you’re lucky enough to have inherited enough to start a business – you don’t have much to worry about. But more often than not, you’ll need some external funding, which means getting a loan. This is a strenuous process that will have you stressing for a long time, but it’s often necessary to have your idea take flight. If you’re not sure where to start, you can check out the article Small Business Loans 2021: Compare Financing Options to see what option will suit you best. Make sure you have a solid business plan before heading in and ask all the questions you might have. This is the riskiest part of starting a business so talking to an advisor beforehand might also be a good idea.
Starting a business is a lot of administration. Depending on what exact service or product you’re offering, who you’ll be hiring, and where you are, you might need more or less paperwork, but there will be more than you know how to handle either way. Your best bet is to hire an administrative assistant to guide you through this and help you make sure you don’t miss a vital paper. You might also want to take a quick course to learn the basics, as it will help you understand where you’re at and not leave you blind in the papers.
Every business is built around the people who work for you. You want to hire experts in the area, but make sure they are also people with whom you can easily work with. Some might say that you should work with people you know and those that are close to you, as you can trust the most, but others will say that working with relatives and friends is the worst idea ever. In the end, it’s up to you to decide what will work best for both your relationships and your business. No matter what, you want to make sure that everyone hired is competent at their job and equally as invested to see the company grow and succeed.
Sunk Cost Fallacy
The last thing we’ll cover is the one thing no business owner wants to think about, but it’s a vital step to ensure your future, and that is the sunk cost fallacy. When you start a business, you believe with all of your heart that the more you put into it, the more it will grow, and when things don’t go as planned, you want to put even more, because that will help fix the problem. The thing is, you have to have a hard line that you will not cross.
You need to have a number that you will not go over, in any circumstance, and if it comes to that – you’ll drop it and walk away to find a different route. Just because you’ve invested a lot, doesn’t mean you should invest more to try to save it. This is a hard thing to talk about, but it’s important, and you need to leave emotion at the door and approach this decision with a cool head.
After considering all of the above – are you ready to leap? Did considering these scare you off or are you even more ready to take that big first step into becoming a business owner? Nobody can promise it’s going to be easy and there will be so many hurdles on the way, but the ones that reach the top will be rewarded with the view that will all be worth it. So sit down, put your thinking hat on and start drafting a plan to make your dreams come true.
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