What to Consider Before You Become an Entrepreneur

There is no such thing as the perfect time to start a business. I know. Growing up in a family business, I always thought I would love to own my own business, but I was waiting for the perfect time. Then, I got fired from my job in broadcasting and had to decide what to do. Was I ready to take on being a business owner? Did I have enough experience? Where would the start-up funding come from? Did I want to own one, or was I just enamored with the American dream of being a business owner?

The hard truth is that most people have no business starting a business because they have unrealistic expectations and have not done the hard work to ensure its success. The statistics bear that out. According to the U.S. Bureau of Labor Statistics, “20% of new businesses fail during the first two years, 45% during the first five years, and 65% during the first ten years.”

I have been in business for more than 35 years, which puts me in the category of only 25% of the companies that make it 15 years or more. Am I clever or lucky? Or a little of both? I believe that small businesses could significantly improve their odds by starting the right business at the right time and taking the right steps.

The right business

Ideally, there are two things to consider. First, the type of business. The right business for one person is very different than the right business for another. In my case, broadcasting experience was a great foundation for starting a media production company. I had worked for several television stations in a variety of roles, so I understood both the production aspects, what might be compared to operations in other businesses, and the financial considerations.

When you start a business in an industry where you know you have an edge, you see the opportunities and the pitfalls. You can become a recognized leader faster than someone who is just getting started. You also may have recognition or awards that give you instant credibility. In my case, I have won over thirty broadcast awards, indicating that I was a seasoned professional.

One side note: I know people who have been very successful in starting businesses without a specific background in the product or service. These are, however, well-educated businesspeople who can successfully lead an operation and have found others with the skills and understanding of the industry. Being a franchisee is another way to get started because the franchise owner has put the products, systems and training in place to jumpstart ownership.

The second thing to consider is the business owner’s passion and commitment level. Even knowledgeable and prepared individuals must work hard during the first few years to set the foundation. Business owners know that means missing family events, long hours, and plowing money back into the operation instead of putting it in their pockets. If you have a passion for business, it is easy to stick it out. If you don’t, resentment builds, and the business suffers.

The right time

You might think that timing is about the age at which you start a business. It is not. Entrepreneurs start businesses at all ages. Over the years, we have seen many young people and their parents on Shark Tank trying to find an investor for their businesses. One might argue that the business is really the parent’s idea, but not always.

At the other end of the scale, there are encore entrepreneurs. These are successful business owners who sold their businesses and could not sit still or who left corporate America and struck out on their own late in life. Of course, many of those who are starting businesses are millennials and Gen Zers. The right time is at any age.

What’s more important is whether or not the product or service is ready for the market and in demand. Media production as an industry has been consistently in demand since I started but was even more popular during and after the pandemic as people needed to communicate but did not want to travel or meet in person. Many side hustles have soared in popularity, and there is still room for new entities. But others have crowded fields. It’s important to look at the competition and see how your offer measures up. Is it different, a better value, or more convenient?

One last thing to consider: Sometimes, you are so far ahead of the market that you need to do more than just sell; you need to educate and create demand. Think about it. Things like computers, meatless burgers and even kitty litter changed or created an entirely new industry. Timing here is tricky. Get in too early, and it takes huge resources to get noticed. Too late, and you can’t catch up.

The right steps

Benjamin Franklin said it best, “If you fail to plan, you plan to fail.” To be successful, you need to take the right planning steps. You need to do the tedious work of creating a business plan. This is the roadmap for how to start, operate and grow the business. There are lots of different templates and resources to create a plan, whether you are starting a traditional business or a lean start-up. Just pick one that meets your needs. You also must find and surround yourself with a great team of advisors, including a business attorney, financial professional, insurance and risk management team and more.

Don’t rush these steps. They set the foundation for beating the odds and growing a great business.

Source: entrepreneur.com