For many people, the thought of owning and running their own business sounds like bliss. No more boss, right?
Well, things aren’t quite that simple, and there’s an awful lot to consider. Actually, perhaps even a more to consider than if you continued in your career!
Now, the idea of choosing your own hours, being your own boss, working on the projects you want to work on sounds ideal. However, the reality rarely matches up to that. So here’s some things you must know before you dive into entrepreneurship:
1 – You’ll be Working Harder Than Ever
You’ve got to consider that you’re starting a business from zero. Literally nothing. And creating something from nothing is a huge amount of work.
You’re not stepping into a job at a company, where all the hard work of sales and marketing is being done for you. With an established business, it has a track record, and has systems in place that work. You’ll be creating all that from scratch.
Even if you choose not to build a fully fledged business and just become a freelancer, you’ll still need to spend time finding clients. Plus dealing with administration aspects of the work like tax and any potential legal issues.
So you’ll be doing more than just a job, since every position in the business is ultimately your responsibility! Sales, marketing, human resources, project management, and of course client work. Plus technical support too potentially, if you’re up to configuring and managing your own computers.
You could of course outsource some of this, but then that costs money, and every penny counts when you’re starting out. But some aspects of your business are too important to get wrong. Accounting is one of those. The legal aspects of recruiting is another. You could for example hire HR services from Peninsula Group or other provider, to help you get all your ducks in a row.
If you get particularly lucky you’ll step right into freelancing full time with multiple stable clients. But more often than not, things are going to be an uphill struggle for a while.
2 – Starting Part Time is the Safe Route
When you start working for yourself, one thing may become very apparent. That’s that you don’t yet have all the skills and knowledge to successfully work for yourself. So that can cause further delays during which you’re not really earning.
That’s why it can be very prudent to start your business in the evenings. Now, you may want to double check your terms of employment to make sure this doesn’t get you into any hot water. And if you’re particularly busy in your day job, and working 12 hours days, this just may not be an option at the moment.
But if possible doing plenty of research in the evenings is a great start. And even building a website, and starting the process of understanding how the market you’re looking to move into works.
Of course, it means you’re effectively working two jobs, but the rewards are there!
3 – Money Probably Won’t Roll In
First of all, business success is by no means guaranteed. Most businesses fail in fact.
And even if you’re just a freelancer, getting client work is not guaranteed. Or your best client may go out of business for example, leaving you scrabbling around for new work.
Or, even if you are successful, building up that success could take a very long time. At least months, or more likely years. And during that time you still need to cover your business, and living, expenses.
These are important realities to keep in mind. Accepting these forces you to really think about what could go wrong. And how you will work through, or around those issues. This is a healthier approach than hoping everything will just work out easily. Because then when reality comes calling, you could really be taken aback .
4 – Sales and Marketing Drives Business
Being amazing at what you do is perfect, but if clients aren’t working with you yet, they don’t know how good you are! But once they’re on board, you have to keep delighting them, otherwise they’ll find someone else to work with.
However sales and marketing is what brings in new business. And most new business owners don’t have experience with both, or even either of these. These are vital and acquired skills. And without them your business doesn’t have a chance of success.
Again, this is less of an issue if you plan to be a freelancer, but you still need to find clients, and some level of sales comes into that.
5 – You’ll Need a Website
It doesn’t matter what sort of business you’re in, you do need a website. Even if it’s just one page! However, a fleshed out site is far better and gives clients a great impression.
But if you don’t know how to create a site, there’s plenty of people in your local area who will help you, but that can get a bit pricey. Or you can also find people online to help.
That said, there’s services now like wordpress.com and wix.com. They take all the technical aspects out of the process, and make it easy for you to create your own site.
6 – You Don’t Need an Office
If the business area you’re moving into will require client meetings, you’ll need an area where you can do just that. That might be at your home, but it might look a little unprofessional. Or you can book local meeting rooms quite inexpensively.
But if you are happy to work from home, and then just visit your clients where they work, that could be perfect.
7 – Competition is a Good Thing
People are often afraid of competition. And competition can lower profits in a market. But at the same time, competition means there’s a thriving market and that there’s money to be made. You just need to figure out a way to compete!
8 – It’s all About Credibility
Credibility is what sells. People need to trust you before they give you money. So one way to increase credibility is to publish helpful content.
This could be self-published books, or reports. Or you could just blog a lot on your site. Or create and publish helpful videos. Presenting yourself as an expert and sharing that content, helps others to see you as an expert.
9 – Ideas are a Dime a Dozen
Many people guard ideas very close to their chests. But there’s very rarely a truly original idea. What’s far more important is the execution, how that idea is implemented.
Think for example that Facebook is really just a follow up to MySpace. Facebook just implemented the idea of social networking far better than any other website.
10 – Staff Can be Remote
With fast internet connections nowadays and in particular with Skype, you don’t need to be anywhere near your staff any more! Hiring contractors all over the world is easy through sites like UpWork and eLance. And even when it comes to recruiting staff full time, that can be done remotely too.
11 – Your Financial Buffer
You’ll need a financial buffer before you even consider going in business for yourself. Even a significant buffer.
If you’re planning to be a freelancer and have clients lined up already, three months of savings might be enough. But remember cash flow is an issue. Many clients pay at least 30 days after you send an invoice. This means you could be waiting around weeks or even longer for payment, while they still expect you to keep working for them. And sometimes non payment becomes an issue, so depending on one client can be very risky.
So six, twelve, or even more months of savings helps take the pressure off. And that’s just to cover your living expenses during that time so you don’t need to pay yourself a salary.
You still have to pay business expenses, and that’s another financial buffer you’ll need to consider. How much specifically will starting and running your business cost? Where is the money for that going to come from?
Don’t assume it will come out of cash flow, since that isn’t guaranteed.
12 – Plan to Succeed
Business and marketing plans seldom match reality, but that’s rarely their point. Their purpose is to force you to really think about every aspect of your business and the market. And start to come up with solutions to problems you’ll encounter.
It also helps you to be able to clearly explain to others your plan. This not only makes your thinking clearer, but can be helpful if you ever need to get a business loan, recruit investors, or even just take on staff.