Have you been considering quitting your day job in favor of starting a business? Have you just lost your job and are currently exploring alternative ways to earn a living? Have you always dreamed of having your own business one day?

Before taking the leap of faith to self-employment, consider these 5 steps:

  1. Clarify your goals / passions – It is not enough to decide to become a business owner. There are several questions and things to consider before moving forward to become a business owner. You will need to think about what type of business you want to run. You will need to determine whether you want to grow from scratch, buy an existing business, or buy an available franchise. But even before deciding that, you should think about how the business will fit in with the rest of your life. Running a business can be a huge commitment of time and money. So ask yourself what do you like to do or what will bring you joy. You will spend much of your day in your business, so it is a good idea for the business to provide you with the work that you really like to do. Ask yourself what you are most passionate about. What would you like to do? What is your dream job / business?
  2. Do your research / homework – Don’t make hasty or impulsive decisions and don’t quit your day job until you are absolutely sure of what you want to do and have a plan to do it. Take the time to do good research by researching the industry, the market, your potential target customers, your competitors. Conduct proper business research, including a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. Get a good handle on projected revenue and realistic operating costs, as well as understand how long it will take to break even and generate more revenue than expenses. Identify your personal strengths and abilities and determine if there are any skill gaps. Determine how you will close skills gaps or lack of experience. What gaps can be closed through vocational training? What gaps can be closed by hiring the right people? What gaps can be closed through coaching or mentoring? Determine what options and opportunities are available to you at this time.
  3. Learn from the mistakes of others – There is no shortage of people who have started or run a business. Talk to as many people as you can who have gone before you. Learn what you can about what works, what doesn’t, and the mistakes others have made. Don’t waste valuable time and money. Be open to hearing the perspectives of others on what they would have done differently. Hindsight is always 20/20.
  4. Business plan ahead – Do the work and develop a business plan. While it may be a lot of work, it will be time well spent and most financial institutions will require one if you are looking for financing. The business planning process is not just to show the bank that your business will be a success, it is also a roadmap that you must follow to ensure success. Managing your business finances can be like managing your personal weekly, monthly, or yearly budget, so if you haven’t developed good budgeting and financial management skills, it can be particularly challenging and doubly important to have a solid business plan.
  5. Hire a mentor – Starting and running a business can be challenging or even lonely at times. In addition to day-to-day business operations, you may feel mentally or emotionally overwhelmed by owning a business. Having a safe place to turn for advice, guidance and accountability or simply as a sounding board may be just what you need to help make the transition to entrepreneurship easier and smoother. Good coaching and mentoring can really help speed up your transition.

While being an entrepreneur has many advantages, it is important that you also consider the disadvantages of being self-employed. Become a business owner armed with as much information, skills, and tools as you can to ensure a successful transition from employee to entrepreneur.

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