New Entrepreneur? 5 Questions to Ask Yourself Before You Start A Business
- Getting Started
- Business Tips
Starting a new business is exhilarating. Congratulations.
But entrepreneurship is as challenging as it is exciting, and it’s important to do a reality check before you commit. So here are a few questions you should ask yourself before you launch your new business.
1. Am I really willing for this business to take time?
If this is your first business, it’s easy to shrug off the warnings about how long it will take for your business to catch on. But seasoned entrepreneurs warn newcomers about this for a reason. Most successful businesses have to survive a lengthy period of, well, not being successful.
Are you willing to spend as much time as it takes to get your business off the ground? Sure you are. But what if that meant working 16-hour days for two years while watching money slowly drain from your bank account? With no guarantee of success at the end?
If that thought gives you pause, it should.
The launch period is survivable, but only if you’re mentally strong enough to recognize it for what it is: normal. Tough, but normal.
2. What will I be giving up to make this business a reality? (And what will I absolutely NOT give up?)
Having it all is a myth. There are only 24 hours in a day, and you will (theoretically) spend some of them sleeping. You will give up parts of your life in order to run a business.
So, before you launch your business, take inventory of your current resources and how you spend your time. Then, make some thoughtful decisions about which parts of your life you’re willing to give up while you build your business.
Financially, this might mean that you decide to keep your kickboxing membership, but reign in weekend cocktail spending. You might put your annual February ski trip on hold, but keep your holiday road trip. And you may decide that, while a new computer is important to you, replacing your car will need to wait a little while.
The decisions can get trickier when you start looking at how you’ll spend your time. What’s more important to you: Saturday morning breakfast runs? Your weekly tennis match with buddies? Catching up on your favorite television series? Quiet evenings with your partner? Reading time?
Remember: some of these things will go. It’s inevitable. If you don’t decide your priorities now, the decision will eventually be made for you by circumstances (never the best option).
You should also decide what you will never give up for your business. A relationship? Health? Time with your kids? Write that list now and be prepared to take radical action if your business ever threatens any of the items on it.
3. How will I define success?
You’re about to take on quite a challenge. How will you know if you’ve pulled it off? If your definition of success is constantly shifting, or is something vague (“When I’m rich!”) you may end up frustrated and burnt out. No good.
Before things get too crazy, set some concrete metrics that you can use to gauge whether you’ve achieved what you set out to do. Think specific goals:
- I want my business to make enough money so that I can responsibly take home a salary of 100k.
- I want this business to become known for making the best tacos in town.
- I want to design a company that allows me to take six weeks off every year.
Of course, goals can and should change. But constantly chasing a moving target can drive you (and everyone around you) crazy. Figure out why you’re starting the business and then keep that vision firmly in view.
4. How will I define failure?
Failure is getting a bit of a rebrand these days. TEDTalks and self-help books abound on the benefits of screwing up and starting over. The thing is: you can only learn from failure if you know that you’ve failed. And admitting to yourself that your big dream isn’t working is one of the most difficult things a person can do.
So how far is too far? How will you know if your business isn’t cutting it and it’s time to move on?
Jot down some Do Not Ignore metrics right now, before you’ve started your venture and while your head is clear. Which circumstances will automatically trigger a “pull the plug” discussion with your business partner, significant other, or trusted friend?
Like your success list, the failure list should be as concrete as possible. Here are a few examples of “sudden death” circumstances:
- If I’ve been in business for three years and I am still not making enough to replace my old income.
- If I have spent all my inheritance money and the business is still not profitable.
- If running my business is causing significant, lasting damage to my most important relationships.
- If, after a year as an entrepreneur, I decide that I’m sincerely happier as an employee.
- If my personal savings account goes below $15,000.
This list is specific to each entrepreneur. Only you know your situation and what you can handle, and, ultimately, it’s up to you if you enforce this list if the time comes. But recording your failure circumstances can, at the very least, provide much-needed perspective (and permission to exit) if things don’t go as well as you planned.
5. Do I care about this enough?
Running a business is crazy and stressful and confusing and exhilarating, and often all of those things at the same time. You’ll do tasks you never thought you could do and find talents you didn’t know you had. For many, it’s the only way to live life. There’s nothing quite like being your own boss.
But to do it well, you’ve got to really, really care about your idea.
Do you care enough? Are you willing to give the huge amount of time, mental energy, and resources it will take to make your business fly?
Take a long, hard look at how badly you want this.
You want it? Fantastic. Welcome to the club. Go ahead and register your LLC, find a location, and get ready for a great ride.
Hey there! We hope you got something out of this article. A quick note: before you hire any employees for your new business, you’ll need workers’ comp coverage. You can go the traditional route (which can take a few weeks) or you can get a workers’ comp quote from us in about five minutes. We designed our process for small businesses, so everything is online and easy and, well, fantastic.