When potential business owners think about starting a small business they are often excited to get started, to jump right in. This can include leaving a “day job” and rushing into what seems to be the perfect life. There are at least three broad areas that deserve thought by any potential small business owner, before leaving the benefits and stability of a day job.
- Am I meant to be an entrepreneur?
This means asking yourself honest questions. You need to decide if you will be willing to sell? Almost every small business requires the owners to also be top salespeople and spend a lot of their time doing this. Do an evaluation of your business management skills (marketing, accounting, budgeting, personnel, sales, strategy, recruiting, etc.). Decide if you need to strengthen these or find help from employees or advisors to help cover them. Think also about your general personality traits. Do words like creative, innovative, persistent, self-confident, flexible, and resilient come to mind? Finally, are you really passionate about this or are you perhaps running away from a day job you don’t like?
- Am I financially ready?
You will need a solid credit score as a business owner. Have you checked it and done what you can to improve it prior to any business start? Evaluate your safety net of liquid assets for you and your family. Start-up businesses are notorious for unexpected financial needs that may require cash from the owner or mean a salary cannot be taken out. Finally, be honest about you and your family’s income and fringe benefit needs, as well as any future upcoming larger expenses. Consider whether your business will support this salary, health insurance and other needs right away and if not if you can manage in the gap period?
- Is there a market for my idea?
Most excited future business owners start with this question and ignore the earlier ones. This area is still a critical one to explore. Deciding if there is a niche for your business idea, evaluating your competition and market size cannot be skipped. Even test marketing your idea part-time or as a hobby can be a worthwhile test prior to leaving a full-time job. Thinking what this idea might look like in five years is important too as you will want some long-term staying power.
All of these areas are critical to dig into.
The great news is that a well-run business plan course, like those provided by Small Business Development Centers (SBDCs) will give you a great framework to evaluate all these questions and more in depth. They will also help you with a written document to explain your idea to others. Lastly, you will have an early blueprint to work from when you do “quit the day job”.