At the end of each year, many people take time to reflect on the year that has passed. During this time, they analyze their lives to see if they achieved their financial, health, spiritual, etc. goals.
For many aspiring entrepreneurs, while enjoying the holidays with their families, the decision whether they should leap into entrepreneurship in the new year weighs heavily on their minds.
The thing is many of these would-be entrepreneurs spend time thinking about starting their first company but never muster the courage to do so. They postpone the decision year after year, saying they’re not ready for entrepreneurship, or it is not the right time to do so.
You being ready or the right time may never come. So, the best way to start your entrepreneurship journey is to plan for it.
This article will give you some tips that will make it easier for you to leap into entrepreneurship so that you can finally move from employee to business owner.
Let’s get into it!
1. Come up with a business plan
Most aspiring entrepreneurs have an idea of the kind of business they would like to start. However, having an idea is not enough. You need to come up with a business plan for the company you hope to run.
If you don’t have one yet, that is the first thing you should do as you consider your decision to become an entrepreneur. There are free templates online that you can use to come up with your business plan quickly.
From a business plan, you can tell if your idea is sellable or if you need to put more time to improve it. Share your business plan with family and friends to get feedback, if the response is not favorable, staying at your 9-5 job may be the best decision in the short term as you work on your idea.
On the other hand, if your business plan is solid and people want the product you’ll be selling, it could be time to jump ship and start your business.
2. Know your start-up costs
Many entrepreneurs have failed because they underestimated or didn’t take time to find out how much it would cost to get their business started. Don’t make this mistake!
Different businesses have varying start-up costs, and depending on the field you’re going into, this could be high or low. Everyday expenses you should look out for when preparing to start your company include:
- Business incorporation fees
- Cost of setting up a website
- Rent for office space
- Cost of equipment
- Office furniture and supplies cost
- Product marketing costs
- Expected payroll
- Professional consultant fees
As an entrepreneur, if you’re clear about how much it will cost to get your business off the ground, you’re unlikely to run into a situation where you run out of money or stall operations.
3. Have an emergency fund
Planning to leap into entrepreneurship should not be the reason why you save money for a rainy day. Having an emergency fund is an excellent financial habit, whether you’re an entrepreneur or an employee.
Financial experts advise that you should save at least six months of living expenses. When you start your entrepreneurship journey, your emergency fund will come in handy.
The first few months of your business may not make you enough money to cater for rent, food, utility bills, and so on.
The money you saved will, therefore, ensure you can live as you currently do until your business generates income to pay you. If you can, have an emergency fund that lasts you more than a year before becoming an entrepreneur.
4. Pay off your debts
To be an entrepreneur, you don’t need to be debt-free. However, paying down or clearing your loans before starting your business has its advantages.
Without personal debt, you may be eligible for higher business loans than an entrepreneur with huge credit card loans. Also, if you’re looking for business partners, potential investors may be more open to investing in your business if you have no personal debt, or it is at a manageable level.
From a business perspective, when your business makes profits, you can reinvest the money to grow your business, and not spend the benefits to pay off debts.
As you consider entrepreneurship, know personal debt can interfere with your business finances. So, eliminate this type of debt as quickly as you can because the success of your business might depend on it.
5. Open a business bank account
As you prepare to start your company, open a business bank account. Many entrepreneurs use their personal bank account as their business account, something that is not recommended.
Here are the reasons to keep separate bank and personal accounts.
- Precise and accurate records. Having one account can become messy, mainly when you’re doing your income tax returns at the end of the year. You and your accountant may have a difficult time telling what expense was for business and what was personal. Dealing with this confusion can be time-consuming, so to avoid wasting time, separate your bank accounts.
- Let’s, for example, say you want to bring in investors two years after starting your business. If you give potential investors bank account records that are mixed together, they will likely not take you seriously. Having a business account only will show them you are well organized and give them a good idea of business revenues and expenses. This information will be valuable for them to decide to invest in your business.
- Create a business relationship with your bank. As your business grows, you may need financing to grow. Having a business account will make it easier for your bank to give you credit because your bank account clearly shows how your business is doing and for what loan amount you qualify.
6. Get a business mentor
Navigating entrepreneurship alone is hard, and that’s why you need a business mentor. This should be someone who has more entrepreneurship experience than you.
As an entrepreneur, you have no boss to turn to when things get tough, so a mentor can advise and guide you through the tough times in business.
A business mentor will not only be there to offer you advice. They can also connect you with the right people. As an experienced business person, your mentor is likely to have an excellent social network that they can give you access to for you to use to grow your business.
A lot of entrepreneurs don’t have mentors, but they should. Having a mentor can play a big part in the success of your business. Steve Jobs mentored Facebook’s founder Mark Zuckerberg, and he has often attributed his success to Jobs.
To find a business mentor come up with a list of people who you admire. These could be people you know or have never met. From your list, look at who can best help you in your entrepreneurship journey and reach out to them. You could send a friendly email or call them up to see if you can schedule a meeting with them.
Most successful entrepreneurs are always willing to share what they have learned in business, so don’t fear to reach out to someone you think will be an excellent mentor to you.
7. Think about your team
It may be early to think about hiring, but you should have an idea of which professionals you’ll need to start your business. For example, will you need a receptionist to answer your calls, or will you do that yourself?
Once you know who you’ll need to hire, find out where you can get the best people to do the job, how much you will pay them, and how you’ll be able to pay them.
When thinking about your team, don’t only focus on the professional support needed to grow your business. Having a personal support team is also something to consider. Your support can include family members, friends, or colleagues.
These people will be the ones you go to for encouragement when your business seems to be failing, or when you doubt a decision you have made. They will also be the people you call to celebrate a business win.
Having a reliable professional and personal support system will play a big part in making it easier for you to leap into entrepreneurship.
8. Research about your competition
Don’t wait to get into business to find out about your competition. You may leap into entrepreneurship only to find out that you have entered a field where you cannot compete with the market leader.
So before you make any significant moves study your business rivals. Doing your research will let you know if you’ll have to offer cheaper or better quality products to get an edge on the competition.
9. Know how you will get clients
The success of any business depends on its sales. If you have no deals, you have no business. So, before you get started on your entrepreneurship journey, figure out how you will get your product to market and be able to sell it.
Two ways you can get clients when you start is by:
- Offering your product for free in return for honest feedback. If your product is high quality and there is a need for it, the customers you give free products will likely become paying customers.
- Creating a list of potential clients and reaching out to them. Coming up with a list of clients to target is easy, but you must be able to show them why they should buy your products and not your competitors.
If you did your research on your competitors, convincing them to buy your product should be easy because, from your research, your product should be better than your competitors.
10. Be bold, passionate and clear about your business goals
If for the last several years, you have been saying you’ll start your business in the new year but didn’t go-ahead to do it, you need to put an end to this. In 2020 stop procrastinating and finally go for it.
Decide on a date to quit your job, and be bold enough to follow through when the time comes. If you have been putting off moving from employee to entrepreneur because you think it is not the right time, know there will never be a right time. So, the sooner you start your business, the better.
And when you decide to become an entrepreneur, make sure you choose something you’ll enjoy doing. Starting a business simply because you hate your 9-5 job can be a recipe for disaster. You have to be passionate about your new venture because building it will not be easy. Lack of passion for a business venture has seen many entrepreneurs waste a lot of time trying to create a business, only for it to fail.
Finally, have a clear goal of where you want to take your business. Ask yourself if you want a thriving local enterprise or a multinational corporation. Having an answer to this question will prepare you for the work you’ll need to put in to get to the heights you hope for.
Many people fail to start their own business because they fear they will not succeed. Stop letting fear stop you from leaping into entrepreneurship in 2020. If you follow the steps, you just read, you’ll have an excellent start to owning a business.