Planning on Starting a Business? First You Need to Answer These 5 Vital Questions.

Every year hundreds of thousands of people start their own businesses. That’s a good thing and excellent for the economy but, frankly, within five years the majority of those businesses have already closed. The reason; improper planning. While we agree that it is nearly impossible to plan for every challenge or every possibility that may occur, there are five questions that really need to be answered before you move ahead with your new business plans. With that in mind we put together a blog with those exact five questions and a little bit of information and advice about each one. Enjoy.

1. Setting goals. When it comes to making plans one of the very first things that needs to be accomplished is goal setting. Your goals, whether they are for the next week, the next year or the next five years, will be your guide map to where you want to be at any specific time as far as your business is concerned. If you haven’t started setting goals yet you will definitely want to do that before you actually start moving ahead with any business plans that you have. The fact is, if you can’t set realistic goals, for whatever reason, you probably aren’t ready to go into business for yourself just yet.
2. Legal paperwork and documentation. When starting any business there are many legal hoops that you need to jump through before you can open your doors. One of the first and probably the most vital is to decide on what structure your business will have. It can be a sole proprietorship, a partnership, a corporation or a limited liability company (LLC), all of which have their positive and negative traits. You’ll also need to register your business name and the municipality where it will be located and get any licenses and permits necessary for your area of the country. Talking to your accountant about business taxes and planning for said taxes is also a vital task that needs to be accomplished.
3.  Are you financially strong enough to open your own business? This is a major concern that needs to be addressed well before any plans are started. For example, if you’re leaving behind a steady paycheck will your new business be able to support you at the level that you are accustomed to or will you need to cut back on things while your business is growing? It’s an important question and one that needs to be answered before you burn any bridges or cut any ties with your current job.
4. Do you have a support network? While the new business may be a sole proprietorship or partnership, it is vital that you also have an external support system that will help you should any setbacks occur. This can include family members, friends, colleagues from your industry, a business mentor or coach and anyone else who can give you unbiased, frank and intelligent advice. The best thing about having a support system in place is that you will not feel like you’re completely alone if things are tough and you will also have a great group to celebrate with when things finally start going full speed ahead.
5. Are you prepared to be a business owner? Frankly, there are two types of people in this world; those who lead and those who follow. While we are not saying that followers are lesser people, we also believe that a business owner who is a follower is destined to fail. There are many small business character traits that you will need when you open your own business in order to be successful including a sincere and strong desire to actually be a successful business owner. Being an excellent communicator and extremely extroverted is also a plus. If you lack in one area you can sometimes make up for it with the others but if you’re lacking in several areas you may well wish to reconsider leaving your steady job behind, at least for now.

If you can answer these 5 questions honestly and frankly and, when you’re done answering them, still feel the same sense of urgency to become a small business owner then you are most likely ready to move forward. If you can’t do that then you may not be ready at this point. We suggest that you work on answering all 5 of them first and once you do, moving forward from there.  Small business ownership isn’t something you should simply dive into, for myself it took a quite a few years of working the daily grind.  It wasn’t until I was traveling to one of the many conference venues in Hong Kong for my day job that I realized I wanted more out of life, so I went out and accomplished it.  No matter what you do, we wish you the best of luck and we urge you to come back and visit us often as we will be presenting more information on  owning and running your own business in the near future. See you then!