Two reasons I hear from people wanting to start a business is to make money and to have more freedom. However, the reality is you won’t get either of those from owning your own business, especially in the start-up phase. In fact, you won’t get those things in the long term without a solid business strategy.
So today, I wanted to offer 5 Action Items to help delve into your motivations, follow your curiosity and determine if having a business is really the path for you.
#1 Update your resume.
Your resume is your brochure until you figure out what your business is going to be. Your resume tells potential customers, vendors, bankers, partners, who you are and what skills and expertise you have.
- Spin you current and past jobs to highlight those skills that align with your future business. I’m not asking you to lie, just think in terms of how all those jobs and experience prepared you for what you are thinking about doing now.
- Update or create your LinkedIn profile. This is your virtual resume. Make them mesh. Don’t say one thing on the paper resume and a different thing on your LinkedIn profile. Be authentic. Put this link in your email signature. This is a great substitute for a website that you don’t need right now anyway.
SIDE NOTE: Now is the time to get rid of those yahoo and hotmail email addresses — create a clean gmail one, like email@example.com. Gmail is free and you get 15 Gig of storage and the Google suite of office products, Docs, Sheets and Slides.
- Connect with recruiters and get their advice on how to improve your resume and Linkedin profile
- Go for job interviews. This is an amazingly cheap way to practice selling yourself and your abilities. This doesn’t mean you will accept a new position, but you never know.
REALITY CHECK — your desire to be your own boss might actually be coming from the fact that you are simply unhappy in your current job. This act of updating your resume and talking to recruiters and going on interviews could very well lead you to an amazing new job where you can have more freedoms and flexibility that you are craving
#2 Work for a small business.
Small as in a company with less than 10 employees. This could be a part time 2nd job.
- Small business owners wear lots of hats. If you’ve been working in big business then you’ve probably had a fairly well defined job role and it would be good to experience first hand what running a business really looks like.
- Small businesses can’t pay as much and might not have the great benefit package, but it’s a step in the right direction of getting use to living on less (see action item 5) and making needed adjustments to start your own business.
- In a small business, if you have business chops, you can advance quickly. You can position yourself to become a Key employee, maybe even negotiate some equity after you’ve proven your worth. Perhaps this is the balanced approach because you can compliment the talents of the owner that way. Finding this ideal match is going to take some effort though.
REALITY CHECK — Owning your own business isn’t easy and it is no get rich quick strategy. It’s not for the faint of heart of thin skinned. Get a front row seat to the real ups and downs of cash flow and supply and customer issues. Working in a small business also might give you the freedom of being your own BOSS because the environment is much less structured when the business is small.
#3 Take personality tests
Follow your curiosities (suggested ones are at the end of this article)
- These are fun tools and are actually kinda interesting to help you figure out areas of interest, strengths and weakness, risk tolerance, communication styles.
- There isn’t one specific personality type that makes a successful entrepreneur. However, the most successful do share certain traits, like high tolerance for risk (living without health insurance or taking a pay cut, for example), visionary, perseverance, able to fail and /or be rejected and still keep on trucking.
REALITY CHECK — If you are thinking about being a business owner or your own boss, it’s really important to create clarity around those musings. You might be thinking of these things for not so obvious reasons. Try to honestly evaluate your goals. In 10 years, if you achieved what you are currently thinking about, what would that look like? Would you be sailing around the world on a yacht? If so, then you might research cost of yachts and go to a boat show so you have something tangible to aim at. Also, you might explore job opportunities that exist in the charter yacht business. See where I’m going with honest evaluations? Dreams are good but if you really want to achieve them it’s important to create actionable steps to make them reality. Owning a business to make tons of money to allow you to sail around the world on a yacht, does not a business plan make.
#4 Ask for the sale
This is a confidence building exercise and will take practice.
- Don’t give away all your products and services for free. Even if you only charge $20 for your service to start, you are getting in the practice of valuing yourself. These prices are NOT set in stone – You can and will and should change them as you figure out your business revenue models.
- Don’t worry about pricing yourself too low. These first sales are going to help you develop your products/service and give you feedback to what works. Then when things start getting serious you have some experience to base your strategy and pricing models on.
- Don’t give away 100% of your products. Set a limit on the quantity for promotional use. Limiting the number you give away means you have to sell the rest. Learning how to ask for the sell is crucial. And to get good and find your style, you must practice. Use % off coupons instead of give-a-ways.
- Ask for referrals
REALITY CHECK — If you struggle with this then you might not be cut out for being a business owner or you might need a partner that can handle sales.
#5 Learn about money, cash flow and budgeting
YES YOU MUST DO THIS
- Start at home. Look at revenue ( that’s your income. Aka your paycheck.) Now compare that to your expenses. (That’s your bills and where you spend your money). The difference is your profit. Ask the tough questions. To make more profit you either have to bring in more revenue (increase sales) or cut expenses (reduce spending)
- Businesses that have awesome sales can fail because they don’t know how to budget and control costs and spending. You must know your numbers. If your significant other does the bills at home, then get involved and learn your profit margin.
- As you look at your home P&L (that stands for profit and loss) statement, your first money goal is to create a start up fund by reallocating where you currently spend money and shift some into your startup fund.
- If you are in debt, then before you do your startup fund, pay off your debt. (this doesn’t mean your mortgage, but it could)
- Learn the difference between fixed costs and variable, between overhead and cost of sales expenses.
REALITY CHECK — This doesn’t mean you have to be the bookkeeper forever, but you must understand the numbers and the ratios and how the economics of business work. You need to be able to read your financials and determine your pricing markups and make decisions about expenses. Start today with your personal P&L.
I’ve covered a ton of info here. I’m happy to help you navigate any of these Action Items as you figure out if starting a business is right for you. Being a BOSS Member is a great place to start and get access to coaching and mentoring.
Personality tests: Use these as self-assessment tools and as a way to learn your likes and dislikes, your strength and weaknesses, and creative process to determine your interests. Don’t take them too serious. Again, follow your curiosity and explore who you are.