Many people try to figure out the right time to start a business. But, is there ever a right time to take the plunge? The answer is yes. There is a right and wrong time to start a business. You have a dream of one day being your own boss, creating your own destiny, and eliminating […]
Many people try to figure out the right time to start a business. But, is there ever a right time to take the plunge? The answer is yes. There is a right and wrong time to start a business.
You have a dream of one day being your own boss, creating your own destiny, and eliminating the middle man. A true entrepreneur knows when is the right time to take that leap and walk away from a steady regular income to begin your own journey and create your own income stream. It is a tough decision for some, but for those who are passionate about their dream of one day owning a company, it is the easiest decision. Those people have done the following: they have a clear defined business description, they have done their research, and they’ve taken the proper steps to financially prepare.
Defining your business
A true entrepreneur has a product or service that makes sense to someone when he or she explains what it is. To define your business, it must make sense to others looking in from the outside regarding what you are offering in either a product or service or both, how you will go about doing this service or providing this product, as well as how you will make money in the business. Sometimes people get so caught up with the big picture they forget about the essence of the business, its purpose. If you are explaining your business concept to someone and the person is not understanding what you are saying, that’s a problem. You must clearly be able to define what your business is and what it does. Every industry has a problem and every business has a solution. Does your solution make sense? What are your goals and objectives for your business? Your business description should tell a person what it is and what it stands for. If you have a hard time explaining the business concept in the beginning to people, you will always have a hard time explaining the business concept later as well. Take the time to properly define what it is you wish to do. Often, narrowing your concept down is vital to the success of the business in the future.
Doing your research
The second way you know you are ready to begin your business is if you have done your homework. Have you researched your industry? Have you clearly defined your target market? Your target market includes who you are going to sell to. Have you taken the time to research the key industry trends? These are just a few of the things a successful business owner has done. One must also take into consideration the competition. There are a couple different types of competition — indirect and direct. You must look at the current and potential competition as well. A successful business owner has researched the sales strategies such as the four Ps — pricing, promotion, products, and place. A successful business owner has researched the licensing and permit requirements, if any. This is the portion of the startup phase that should take you the longest in preparing. What type of entity will you be and how will this affect your personal finances? This is ultimately your business plan. Without solid research, a business will always be playing catch up. A big reason a business fails is the lack of research on the part of the owner/manager. You must know your industry inside and out.
Business capital
The part that people get a little confused about is dealing with capital. Do you have capital? Have you taken the research you have done to find out how much money you will need to get started? Have you assessed your own finances to see what you need to live off as well? One must not only account for the business finances, but also his or her personal finances. The business might get up and running, but you might not have any extra money to pay your own personal bills for quite some time. Make sure you have a partner that can pay your household expenses, a large savings, or you can keep your day job while you get the business off the ground.
When it comes to starting a business, you must be ready and willing to do whatever it takes to succeed. You have to research what your type of business will cost to get those doors open. Some people starting a business think they will just borrow the full amount from the bank. In most cases, this is not possible. A lender will not put up all the funding. They will require you as the business owner to have some skin in the game, meaning your own funding as a down payment. Why should they invest 100 percent into your company if you won’t invest into it yourself?
Take a look at what you have and don’t have. If that means you have to take on that second job to save that down payment for a loan to start your business, then do it. Life isn’t easy and there are sacrifices that need to be made. What are you willing to sacrifice? Maybe it is that fancy car, the big house, or the trips you like to take. Something might have to give in order to get this business launched.
When is the right time to start your business? Well, the answer is simple. Do you have a clearly defined business? Do you have your research done inside and out? Do you have enough money to cover your personal expenses for a while and have a down payment for a loan? If you have all the answers to these questions as yes, then you are ready to begin your business. As always, meeting with economic resource partners is a great step in the right direction when starting a business. They can be a sounding board, a check in place, and an unbiased opinion on whether or not you are ready to take that leap of faith and strike out on your own.
Melissa Zomro Davis, a former small-business owner in the equine industry, is a New York State-certified business advisor at the Small Business Development Center at Onondaga Community College. Contact her at m.l.zomro@sunyocc.edu or call (315) 498-6066.