Take inventory before starting your own business

More than 1 million people will start their own businesses next year. In the 18 to 34 year old age group, surveys show that 80% are engaged in some form of entrepreneurial activity. The older generation is striking off on their own, too. Many who have lost their jobs in recent years, or who have had enough of corporate America, are starting their own businesses.

Some of those who are going to fail have a well-written business plan, while others with no track record to speak of will succeed. So, what is the secret to success?

A lot depends on the answers to 4 big questions.

1.      Can you start something on the side first? Although some people are successful by jumping in headfirst, quitting their job and risking their life savings, most do much better by moonlighting or a while.

Moonlighting enables you to find out if you're suited for entrepreneurial life. And it's much easier to make clear-headed business decisions when you still have a regular paycheck coming in.

It's also a good way to test your family's (and your own) willingness to live an entrepreneurial lifestyle. You really don't know how viable your business idea is unless you test it. And you don't know how your family will react to things such as a reduced income and long workdays focused on building your new business.

Starting something on the side is also a good way to build your skills and your customer base. You can cut your teeth on smaller projects and make some learning mistakes when it's not fatal to your financial future.

2.      How self-disciplined are you?

It's enticing to think of answering to no one and setting your own schedule, but be honest with yourself. How well do you do that? Some entrepreneurs I know can't work at home because they are too distracted by household chores that are an easy excuse to procrastinate. Others (like me) find that working at home is impossible because there are always projects calling your name from your office just a few feet down the hall.

Typical entrepreneurs have a short attention span in general but a laser beam focus on things that interest them. If you are too detailed in your approach to work, you may get bogged down in the minutia and be unable to move quickly and wear many hats. On the other hand, if you are a big thinker who never comes down to the ground long enough to implement any of your great ideas, you'll never get your business off the ground. In both cases, you'll starve.

3.      How much drive to succeed do you have?

If you are starting your own business to have more free time, you may be kidding yourself. Successful entrepreneurs usually want to achieve as much and earn as much as possible and they will do whatever it takes...which typically means long hours.

Even if you have a lot of things going for you, you'll discover that building a business isn't going to be a smooth ride. There will be times when everyone around you will want to give up. You will have dark thoughts about your own abilities. You will be told by loved ones to "Go get a real job."

It's well known that it takes between three and five years to get over the hump. Those years will test your business plan, your self-confidence, your abilities and your personal relationships.

4.      Do you have a good idea or a good business?

Too often a good idea can't be turned into a moneymaking operation that will generate enough cash flow. For instance, you may build a darn nice birdhouse but are there enough customers who will buy them? Don't confuse what people say they will buy with what they actually will do when you're asking for the sale.

Along similar lines, many people are good at what they do technically but lousy marketers and sales people. To succeed in business, entrepreneurs are either good at marketing and sales, or they work with people who are. No matter how great your product or service is, it won't sell itself.

Almost 37 % of all American homes are currently involved in some kind of entrepreneurial venture. If you're thinking about doing the same, make sure it's right for you and your family first.

Joan Lloyd is a Milwaukee based executive coach and organizational & leadership development strategist. She is known for her ability to help leaders and their teams achieve measurable, lasting improvements. Joan Lloyd & Associates, specializes in leadership development, organizational change and teambuilding, providing: executive coaching, CEO coaching & leader team coaching, 360-degree feedback processes, retreat facilitation and presentation skill coaching and small group labs. Contact Joan Lloyd & Associates at (414) 573-1616, mailto:info@joanlloyd.com, or www.JoanLloyd.com 
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