Starting your own business is one of the most exciting choices anyone can make. Millions have done so successfully and found it an exhilarating and rewarding challenge. However, starting a business also has its downsides and its risks.
You need to seriously consider whether starting your own business is right for you, honestly appraising your strengths and weaknesses. Do you have the skills and determination it will require? Do you have the full support of your family and friends? Can you afford the financial uncertainty and risk?
1. Understand the implications of running a business
Be ready to work long hours
- Many people start a business hoping to improve their work-life balance. But in the early stages, particularly, running a business can be all-consuming.
- It’s likely that you’ll have to sacrifice social activities, for a time at least.
You need to cope well with pressure
- The final call in most business decisions will rest with you. This can be one of the most rewarding aspects of being your own boss, but it’s a high-pressure position to be in.
- If you’re an employee, most of the decisions you’re faced with will be within your area of expertise. But as an owner-manager, you’ll have to be ready to deal with every area of your business, from sales and marketing to finance and HR.
The stakes can be high
- The potentially serious consequences of your decisions can be a source of pressure when you run your own business.
- The success of your business - and your livelihood and that of your employees - can depend on your actions.
There are many tedious tasks to be completed
- It’s easy to focus on the exciting aspects of starting a business. But the flip side of being your own boss is that in the early days you’ll probably also be your own receptionist, admin assistant and book-keeper.
- There are red-tape obligations - forms to be filed, records to be kept and rules to be learned and followed.
The personal rewards can be great
- Running your own business can be an immensely rewarding experience, giving you a real sense of control over your working life, as well as clear financial gains if you can turn your idea into a successful operation.
2. Your skills and attributes
Make sure you have the sector-specific skills your business will require
- You'll need a clear understanding of the requirements of the business sector you’ll be working in.
- If you have worked in the same sector previously, this shouldn’t be a problem. But if you’re moving into an area that’s new to you, do your research. You might want to look at training, or hiring experienced staff.
You need determination and confidence
- Being half-hearted isn’t an option. If you are going to start your business, you have to give it all you’ve got.
- Can you keep plugging away even when things aren’t going your way?
- It’s crucial that you believe in what you’re doing, because you’ll have to convince others - such as staff and investors - to support you.
It helps to have an independent streak
- Running a business can be lonely, particularly in the early stages.
- There’ll be no one looking over your shoulder to make sure you get things done. You’ll have to rely on your own motivation and self-discipline.
You also need to work well with others
- Being your own boss isn’t all about independence and autonomy. You might have more direct contact with suppliers and customers than ever before, so being able to form good business relationships is an important skill.
- As your business expands you will also need to be able to share responsibility and delegate tasks to others.
You must be flexible
- Successful entrepreneurs are generally comfortable taking expert advice, and are happy changing their approach if a better one is pointed out.
Patience and resilience are valuable attributes
- People who start their own businesses benefit from being resilient, patient and realistic. You are unlikely to become a millionaire overnight.
3. Your support network
Discuss your plans with your family
- Family can be a great source of moral support for someone starting out in business. Keep them up to date with how things are progressing.
- Make sure that everyone understands and accepts any significant changes setting up your own business might involve for them. Your schedule might be busier, for instance, or your income lower or less predictable in the early days.
Seek the advice of friends and colleagues
- Your friends will also be an important source of support.
- If you know people who have experience of running a business or know the sector you’ll be operating in, ask for their advice.
Talk to the experts
- There’s a wide range of business support available that can ease the process of starting out in business. These include professional advisers from business support organisations such as Enterprise Agencies.
- Business mentoring is another option - this involves experienced entrepreneurs providing ongoing help and advice to start-up businesses.
Join suitable support groups
- Local business networking groups provide a forum where you can share problems and ideas with other business owners.
- Check whether there are any online communities matching your background or type of business.
- Young entrepreneurs can get help and support through Shell LiveWIRE.
4. Your finances
Carefully assess the financial implications of starting a business
- Do you have the money you’ll need to get your business going until revenues start to grow? If not, where will you get it?
- If you’ll be giving up a regular wage to start your business, do you have the flexibility to cope with possible fluctuations in your income? Make sure you can cover living expenses while the business takes off.
Be clear about your financial priorities
- Which is more important to you - safeguarding your financial security or seeing your business grow?
- Make sure your strategy for your business reflects your financial priorities.
Consider the implications for others
- If your business plans place others at financial risk, make sure they understand the risks and accept them.
5. Weigh up any doubts
Don’t worry about fearing failure
- Worrying that your business won’t succeed is perfectly natural. It makes sense to think about how you would respond if your business were to fail.
- But if your fear undermines your work and confidence, then starting your own business may not be the right course to take.
Take steps to improve your chances
- Once you’ve assessed your skills and your situation, don’t be surprised or disappointed if there are areas of weakness.
- The important thing is to acknowledge these fully and to see how you can overcome them. There is a wide range of support available.
You can fill in gaps in your knowledge
- Few people know everything about running a business before they start.
- Most things you can pick up as you go along - though you should be ready for a steep learning curve.
- Remember - take advice and learn from others whenever you can.
- Find out about training courses for owner-managers from learndirect (0800 101 901).
- Find your local enterprise agency through the National Enterprise Network.
- Find your Local Enterprise Partnership through the LEP Network.
- Find a business mentor through mentorsme.co.uk.
- Find support and mentoring for young entrepreneurs from the Prince’s Trust.
- Find resources for young entrepreneurs on the Shell LiveWIRE website.