Starting a business is an attractive alternative to a job you hate—or unemployment. When compared with working for someone else, self-employment presents a long list of opportunities and challenges, even for those professionals with deep, specific experience in their industry. Despite the finding that new business owners have an average of 11.5 years of experience within their field before starting a venture of their own, almost two-thirds of businesses with employees will only survive their first two years, and about half will fold within five years.
Before diving in, consider if you're truly ready to be your own boss and how your lifestyle will be affected by such an immersive personal and professional decision. Below are six traits that encapsulate a successful transition from being employed by someone else's business to starting one of your own.
If you start a business, you no longer have one job with clearly identified duties. By necessity, entrepreneurs have a multitude of responsibilities during their first years of operation, and these various work streams will often be interrupted by an unforeseen crisis (particularly while in the startup phase).
While employees are used to having days filled with relatively predictable tasks, self-employed people don't usually enjoy this kind of regularity. Once you start a business, there's nowhere to pass the blame in terms of why a certain process isn't working, or why a task hasn't been completed. As a business owner, you're the one who will have to deal with whatever arises during the workday, and people will look to you to solve problems.
When you're self-employed, you have sole responsibility for taking charge of what happens next. Creating a plan of action and setting goals are your responsibility.
No one's going to schedule appointments for you or point out what needs to be done in order to make a profit. For many people who try to become self-employed and start businesses after having a long-term full-time job, self-motivation is the hardest adjustment to make.
Self-discipline, motivation, and passion are all necessary qualities for growing a successful business of your own. The first question you should ask yourself is not how to start a business, but if you should start a business at all.
Apart from sales-driven positions, most employees are not specifically trained to look out for client opportunities. Many jobs focus on the creation of a product or providing a service while a sales department or a managerial team tackle the search for new customers and strategies to grow the business.
If you start a business, you will need to close sales on your own. This may be a small order with a new client, or a large opportunity to get your product on the shelves of a large retail chain. To land either opportunity, you'll need to keep scanning the horizon and positioning yourself to close deals that come your way.
One of your first tasks will be to develop a business plan, but as your business becomes operational, you'll likely find that this original strategy needs to be adjusted. Goal setting will make sure that despite iteration and improvisation, your business remains true to its original objectives.
The U.S. Small Business Administration offers free resources for entrepreneurs looking to craft a professional and forward-thinking business plan. These resources can help you clarify how to structure, run, and grow your new business.
Starting a business takes energy, and to keep the business afloat for longer than five years, you need to be fully focused on consistency. You can't afford to coast along or just go through the motions; your customers must be consistently reminded that you're devoting all the business' resources, talent, and attention to serving their needs.
Most small business owners feel only “somewhat prepared” for the challenges ahead. As a business owner, there's no guarantee that the products or services you offer will be in demand six months from now, or that your employees will show up for work, or that your customers will pay their bills on time. Even if you have a big client, who regularly patronizes your business and seems to be perfectly happy with your work, they could drop you with no notice.
Revenue and actual income can drastically fluctuate from month to month, and for someone who's used to having a paycheck arrive regularly every two weeks, the uncertainty of being self-employed can be too difficult to deal with.