Over the years, I’ve met very few people who don’t have the wish to start a business. It’s always interesting for me to listen to people’s comments when they get to know that a large part of my work involves helping professionals start businesses.
While this is the case, the reality is that not everyone is cut out for business. Being an entrepreneur requires a special set of mental, emotional and physical skills that one is either born with or is willing to acquire.
How do you know whether you should start a business or not?
Below are 5 reasons why you should not start a business…at least not now.
#1: You’re a really smart person and like doing things your way, all the time
Smart students are used to getting recognition for work well done. It’s no wonder then that they become solo-workers.
In their minds, no one can do things as perfectly as they can. When working on group assignments, they’ll typically take up the lion’s share of the work to avoid jeopardizing their grades.
This doesn’t work well in business because delegation, handling teams and motivating your staff are part and parcel of the deal.
Secondly, in business, the only recognition you get is when your business is profitable.
Finally, failure is a key aspect of business, and this is something non-smart students are used to handling.
If being smart and getting recognized is important for you, find a way to become a superstar in your profession and climb up the corporate ladder.
#2: You’re a perfectionist
If having things done perfectly is the thing for you then you may need to reconsider going into business.
Business works differently: when you have a brilliant idea, test it very fast and take it to the market.
The market will teach you the changes it needs you to make, even as you make money from the incomplete product or service.
Apple does this with iPhones, Microsoft has done this with Windows…
We buy the latest version of their products, and these new versions are simply an improvement on the earlier versions based on the complaints and recommendations of buyers of the earlier version(s).
In practical sense, if your product or services requires steps A to G for it to be complete, then:
- you need to start selling it at point C;
- gather feedback from buyers and prospects;
- improve it and come up with version 2 – which moves you to Point D in your development;
- sell this new version;
- gather more feedback and go back to the drawing board to create the next version;
- rinse and repeat this cycle.
In summary the cycle is: sell the version you have, gather feedback, create an edited version, take it to the market, sell and gather feedback, use the feedback to create an upgrade, take the upgrade to the market and start the process again.
The cycle continues until you have something the market is raving to buy.
This system is what makes people queue for blocks to wait for Apple stores to open on launch days. If Apple can do it, why can’t you?
#3: You’re risk averse
There are many times when getting into business opportunities is based on intuition.
You may not have all the information necessary to take action at that time, but there’s something that tells you to take advantage of this opportunity.
Will you make money in it?
Maybe, maybe not.
However, being too careful and not taking calculated risks on opportunities is going to leave your business lagging behind.
Some opportunities have a very short lag-time – the time within which the opportunity will make money for you.
If you wait too long, you may end up getting in when the lag time is up or almost up and thus make very little money or in some cases, huge losses.
Entrepreneurs are risk-takers in many ways. Sometimes they win, sometimes they lose. But they never stop taking risks.
If you’re risk-averse, find safer and more secure ways of growing your money; ways that don’t require as much time, work, financial, and emotional investment as a business does.
#4: You run through money like a race car
Business income is not your personal income. When you start a business, you will be just another employee in the business, with a certain level of remuneration each month, while working harder than your employees.
I’ve met many people with thriving businesses, but the businesses struggle from month to month because the owners use money unwisely.
How will you handle business income if you’re not able to handle your personal income wisely?
Your personal financial habits will spill over to your business – that’s a claim I make with 100% certainty.
If you have poor personal financial habits, first improve your money habits before getting into business:
- sign up for a financial management program like Centonomy;
- work with a financial coach;
- or get books like David Bach’s Smart Women Finish Rich, Richard Clanson’s The Richest Man in Babylon, and Fredric Lehrman’s Prosperity Consciousness audio program.
When you do get into business, tighten your money belt so that you don’t have easy access to business money.
Also hire an accountant as soon as you can so that you have someone else to be accountable to when it comes to business finances.
#5: You don’t have another source of financial support
It takes time for a business to get established and provide for itself and for you. It would be unwise to start a business and expect it to take care of your personal needs from the word go.
If money is really tight now, find a way to make ends meet before starting a business. You could get a job or become an online freelancer.
Online freelancing is one of the fastest growing sources of income today and there are people who make a full-time living working online.
The rule of thumb when working online is to always stick to the site’s framework and don’t start dealing with sellers directly – getting out of the framework is the easiest way to get conned into doing work for free.
Walter’s site is a great place to hang out with other freelancers and learn the do’s and don’ts of online freelancing. Both Walter and Sheeroh provide affordable training to get you started.
If you’d like more formal training, UDEMY has courses for as little as $15 per course.
Business is stressful enough even when you have adequate capital. Very few people are able to start and grow their businesses successfully when the business is their sole source of income.
What if you still want to start a business?
Maybe you’ve read these reasons why you should not start a business and still feel that you’re destined to be an entrepreneur. So what do you do?
My advice is to start small and grow with time:
- If you’re employed, start the business in your part-time and learn how to shift your mentality from an employee to an employer. Create a nest egg and save enough money for your ‘retirement’. Also start learning as much as you can about business management and implement what you’re learning in your business.
- If you’re not employed and have enough money to cover your personal expenses for the next 6-12 months, then go ahead and start a business.
- In both cases, start smart by getting a mentor (someone who has succeeded in a similar business or industry), join a mastermind, attend business networking events, or create a support group of other people who are starting or growing their businesses. You will need this support in the days to come.
- If you can afford to, hire a business coach or join a business startup coaching program so that you have professional support from the word go.
These are my 5 main reasons why you should not start a business now. I’d love to hear what you think so please share your ideas in the Comments.
(Image credit: Stuart Miles at Free Digital Photos)
Why are some people able to start businesses and succeed while others struggle and eventually fail? Join me for the free Teleseminar 3 Common Startup Mistakes That Kill Businesses Fast (and how you can avoid or recover from them) and find out some reasons why this happens. Click here to sign up for the next Teleseminar.