6 Signs You’re Ready to Take the Leap and Start a Business
By Meredith Wood, Fundera – October 22, 2018
You have a concept you’re excited about and have put in a lot of thought to starting up. That doesn’t mean it’s the right time in your life or the right idea. Here are some signs you may or may not be ready.
In some respects, it’s easier than ever to start a business. There’s a wealth of information available for aspiring entrepreneurs and lots of emerging industries that need people to open great companies within them. Plus, as online small business lending continues to grow, and early-stage venture funding flowing from VCs, there are funding options available, too.
Before you hand in your resignation—politely, of course—make sure you’re ready to start your business. Just because you have a concept you’re excited about, or simply want to, doesn’t mean it’s the right time in your life or the right idea to pursue at all. These four signs are tell-tale.
1. You’re all in. No hesitations.
Starting a business is an all-or-nothing decision. If you don’t go all in, your business isn’t going to succeed, and you won’t have any rewards to reap. At the same time, you’ll have to fully understand that with all of the great stuff about being a business owner (and there’s lots!) also come the unavoidable bad things, too. There’ll be months that are unstable, and periods where you’re bringing in lower-than-comfortable revenue. There’s even the chance of failure.
But, if you’ve turned over the upsides and the downsides in your head lots of times, and you’re not hedging or hesitating about their possibilities, then that’s a great sign that you’re ready. You need that true buy-in from yourself before you can go any further.
2. You’re not acting on impulse.
Many of the best business ideas come from a genuine need: an entrepreneur sees something they wish existed, so they build it. That could be something as simple as a dog grooming operation in a neighborhood that doesn’t have one, or as sophisticated as a new kind of software built on the back of emerging technology. Whatever the idea is, it’s usually not born and built overnight.
You’re ready to start your business if you’ve sat on your idea for a while, and still decided it’s a worthwhile venture that you’d be excited by for a long time. You’ve thought, Hey! This is something I could want to do with my life, and realized it’s not a fleeting interest. You’ve run your concept by other people, and let them play devil’s advocate.
Perhaps most importantly, you’ve also given your idea some time to future-proof. Lots of businesses that monetize against short-term trends don’t have any staying power once the wave passes. If you’re going to quit your day job and invest savings into a new company, make sure you can see long-term viability.
3. You’ve laid your practical foundations.
In all of the great stories about companies that started in dorm rooms or kitchens, the part that founders often gloss over are the unsexy details about getting things off the ground. And there’s a lot of it: looking into business entities and corporate structures, applying for business credit cards and making sure your personal credit is in good standing, determining product-market fit, doing competitive research… you get the idea.
All of the groundwork can feel like glorified homework. But it’s so, so important.
You’re not ready to start a business until you’ve really done a lot of legwork on your potential business and your personal financials. The last thing you want to do as a business owner is start from a disadvantaged position, because you’ll be playing catch up forever. Take the time now to lay your business’s foundations.
4. You have a plan.
Now that you have the basics down, it’s important to make sure your business plan is solid. After all, if you’re giving up a steady career for a future of hustling, you want to be sure you’ve laid out your overall vision and plan for growth. A business plan is not only useful to help align your long term thinking, but it is also key if you ever plan to apply for business financing or seek out investors.
A business plan doesn’t have to be extensive—in fact, it should be concise and to the point. No one wants to read an endless business plan full of technical jargon. Instead, stick with universal terms and language to make it as accessible as possible. Expect your business plan to be always changing as you grow your business, but you should have the basics down before you set out.
5. You have developed a network.
Sure, you may be able to make it without anyone’s help—but having the right people in your court will make it endlessly easier. If you already have experience in your business’s industry, you likely have a network of former colleagues, business partners and clients that you can reach out to. If you haven’t spent time in the industry, consider getting a side gig or moonlighting in the field before you set sail.
If you don’t have one, finding the right business mentor can be make the difference between making it big and striking out. Studies show that business owners who have a mentor (especially the right mentor) often see higher revenue growth and stay in business longer than those who don’t. If you’ve found someone you trust to offer advice and guide you when it comes to big decisions, you’re one step closer to success.
6. You trust yourself.
This one’s easier said than done. But, if you think about it, small business owners generally have incredible discipline and presence of mind. That’s because running a business isn’t for everyone and only those who are in it for the long run can succeed.
To make it as an entrepreneur, you have to be able to depend on yourself. You’ll be structuring your own time, making sure you balance work and play (and stopping yourself from overworking). You have to keep yourself motivated on the days when the last thing you want to do is work. You have to push yourself to keep learning things that you never thought you wanted or could, and that you didn’t even know you didn’t know. And you have to trust that you’ll find solutions—or seek the people who will.
But knowing yourself on that level is a privilege. That’s why many small business owners never want to go back. It’s not just having your own schedule and not working for anyone else—which is great, too.
Owning a company changes your life, and yourself, in amazing ways. But it’s important to be sure you’re ready for everything that comes along with entrepreneurship before you take the leap.