Are You Cut out to Run Your Own Business?
The prospect of owning a business appeals to most Americans, but not everyone is cut out for it. Given a choice between running their own business or working for somebody else, 57 percent of Americans say they would rather be their own boss, according to a Gallup poll.
But despite this widespread desire to own a business, just 10 percent of Americans are self-employed and only 4 percent have employees working for them. Among those who do start up a business, 20 percent fail within a year and almost half fail within five years, Bureau of Labor Statistics data shows. As these numbers indicate, it takes more than just desire to be a successful entrepreneur. If you’re trying to decide whether you’re cut out to be your own boss, ask yourself these four questions:
Do I Have a Realistic Business Plan?
Failing to plan is planning to fail. One of the most fundamental prerequisites for entrepreneurial success is a solid, realistic business plan. A good business plan should cover essential financial, operational and marketing planning issues, including market research, a sales plan, financial projections and a financing plan. The Small Business Administration offers a step-by-step online guide to creating a business plan.
Can I Finance My Business?
One of the most important parts of writing a business plan is creating a feasible financing strategy. According to Dun & Bradstreet, 90 percent of business failures are caused by poor cash flow. Your business plan should include cash flow projections for your first three to five years of operation, with the first year broken down by month so you can see exactly how much cash you’ll need to stay in business.
Having this information will help you see whether or not you need to seek additional capital resources to finance your business. Score provides an online guide to possible financing resources. These include personal savings, family and friends, bank loans, government loans, offices of economic development, grants, angel investors, venture capital and crowdfunding.
Do I Have the Right Personal Qualities?
Successfully running a business requires a certain set of personal aptitudes, attributes and skills. One of the most important is determination to enable you to persevere through setbacks. You also need a willingness to take risks, including the risk of failure. These qualities demand confidence, which is another important attribute. Other important qualities for entrepreneurial success include being passionate enough about your business to stay motivated, knowing how to manage your finances, willingness to be your own sales representative and being willing to adapt and learn to adjust to new circumstances.
In addition, you need whatever technical skills are necessary to operate your business. If you are lacking in one or more of the skills needed for your business, hire someone to take over the task. For instance, many business owners outsource tasks such as bookkeeping and IT.
Am I Willing to Put in the Time?
Being successful as a business owner also requires a willingness to sacrifice time. If you plan on owning a business, you should expect to put in more hours than a regular employee. A survey from The Alternative Board shows that a third of entrepreneurs work 40 to 49 hours a week, while another 30 percent work 50 to 59 hours, and 19 percent work 60 hours or more.
If you’re not sure whether you’re up to the task of committing to this much extra work, give the entrepreneurial lifestyle a test by spending some of your spare time running a part-time business. For instance, try representing a company such as Amway to give you an opportunity to gain some sales experience and get used to putting in extra hours and being your own boss.
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For more immediate help you are welcome to send an email to Andrew Rogerson or give me a call on 916 570-2674.
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