Guide to starting a business

Entrepreneur's guide to getting started

The transition from typical employee to business owner / entrepreneur can have its challenges. The upside is outstanding but there are also risks that should be considered. The path to entrepreneurship will have you facing many challenges with one of the biggest being the financial strain when you first begin. No longer relying on a steady pay check or the benefits you’ve come to rely on as an employee can turn many potential new business owners off. Depending on your resources you will most likely be starting off with you being the only employee. This means you will be faced with tasks you may not enjoy or up to this point have no idea how to do. The basic nature of an entrepreneur however is to have the desire to overcome these challenges and stair adversity in the face with the confidence it takes to succeed.

I’ve written this not to scare or deter you from chasing your dreams but rather in an attempt to make this leap as successful as possible by sharing what I’ve learned over the years and having gone through it personally.

1. Begin by considering what it is in life that you’ve always wanted to do.
Now if your forty years old and always wanted to be an astronaut that’s not what I’m talking about. I’m asking you to consider what you truly enjoy doing such as helping people or providing a unique service, physically building something just what you believe would make you happy and that you are passionate about. Don’t think about the money yet brainstorming ideas about starting a business begins with passion first we will be determining the commerciality of your choice later.

Preliminary Checklist of Your Readiness to Start a Business:

  • I am willing to accept the risks and initial instability that comes with starting a business
  • I am able to rely on myself 100% I can make decisions that make or break my new business.
  • I work effectively on my own motivating myself without supervision. I do not rely on others.
  • I am goal oriented and will work at completing my goals everyday without exception.
  • I can visualise opportunities and have the confidence to go after them.
  • I can handle the stress and pressures that are inherently apart of starting a new business. Even when things do not go as planned I believe I can overcome any problem.
  • I posses the drive, determination and willingness to work long hours to make my business a success.

2. Determine The Business Ownership That’s Right For You
The Three Main Ways To Start a Business:

Buy a Business that already exists.
Traditionally buying a business will be more expensive but does have its advantages. Start up can be the most gruelling part and establishing a customer base is no easy task. This may interest those who want to hit the ground running and have the budget to do so. Do your due diligence with any business you consider buying. Why does the current owner want to sell? What is the market conditions like for the business? Will there be new competition just around the corner that the current owner failed to disclose. Make it you priority to research everything before jumping in.

Purchasing a franchise is a great way to lower the risk of business ownership but it has its pros & cons. A franchise is established providing a track record and the ability to review other stores profitability. You are buying a brand that already has customer awareness so there are fees for this. Start up fees and ongoing royalties are part of the deal when it comes to owning a franchise.

Start Your Own Business
This is for the true entrepreneur. Where you are the boss and your vision comes into reality. You will decide what’s right for the business how fast to grow it and what direction it will take. This is not always the cheapest option as is sometimes suggested. Sure there are thousands of cases where someone started with $500 and turned it into a thriving business but this is all dependent on the type business you decide to start what skills and resources you already have etc.

3) Zero in on the Business you want to start
Consider these three different options

  • Start a business in a high growth market or new up and coming trend. This business plan takes a bit more guts but in many cases that’s where you get the glory. If you consider yourself good at spotting new trends this can be your ace in business. Setting up shop in front of an up and coming trend will help to position you as a leader and an authority within the space. This allows you to grow at an explosive rate if things really catch on. Choose it wrong though and you go down with the ship so do your research there may be a reason why other businesses are not in the space. Some say to focus on where the completion is already the reasoning behind it being that if others are making money there chances are you can to. Just be cautious and as always do you research thoroughly.

  • Turn your current employment into your own business. The path of least resistance sometimes is sticking with what you already know. Especially true if you already have a passion for the business you’re currently involved in. You may see opportunities on how things could be done better and most likely already have industry contacts that will make your transition into entrepreneurship that much easier. I would suggest reviewing any employment contracts you signed before taking this approach. There can be no compete clauses or conflict of interest arguments if you plan on starting your business before actually resigning.

  • Start a business based on a hobby or interest. This can be one of the most exciting aspects of starting a business. The age old saying that really sums up this one is if you love what you do you’ll never work a day in your life. It’s not all roses here either though. A close friend of mine had a loved for the outdoors and decided to give up his sales job to pursue his passions as an eco adventure guide. He quickly found that as a complete start up the accounting and proper bookkeeping was something he absolutely hated. He was fortunate that he was able to pull from many of his corporate sales contacts to build his new business quickly positioned as a corporate team building activity. This quick growth allowed him to hire the accounting help he needed to stay clear of any tax troubles down the road and allowed him to stay focused on growing his business. Always be looking for synergies even if the business your started seems unrelated to what you old profession was there may be opportunities to be discovered.

Begin to research the Commerciality of your business idea
I would always recommend drafting a proper business plan, some may skip this step and if so it’s important to at least answer the following.

  • Determine what skills are needed to operate the business. Do you currently posses any of these skills or are you willing to learn them. Without the skills how will you learn them and what costs are involved.
  • Determine the actual business operation, how it works, who are the customers, what are the products or services being offered.
  • Does your business have commercial legs meaning what is the supply and demand within your market?
  • What equipment, supplies or facility is necessary to operate this type of business?
  • Forecast any possible overheads your business will be incurring when operating.
  • How much capital is needed to start the business? Would banks entertain the idea of financing or is venture capital required. Do you currently have personal funds set aside or are friends and family willing to help. (Essentially where will the start up money come from?)

When everything has lined up just right how will you proceed?

  • Resign or quit your job right way to begin working on the business?
  • Stay employed while you begin the leg work (evenings & weekends)
  • Reduce your current jobs weekly hours to dedicate more time to your new business
  • Recruit an employee to begin laying the foundation while you’re still employed with steady income.

Include your family in your decisions
Having the support of your family will be a huge consideration when you decide to start a business. When your single without commitments there is far less to consider outside your own mental an physical well being. Remember it’s your dream but they too will experience the hardships that starting a business can create. Make sure you already have or have planned for the needs of your household during this transition in to entrepreneurship. The recommended financial security is between 6 and 12 months living expenses ensuring you will have the ability to survive any bumps in the road during those first few months after starting your business.