“To handle yourself, use your head; to handle others, use your heart” ~ Eleanor Roosevelt
The dream as you're planning to start a small business is that all paths lead to success.
Freedom to choose when and where to work! If and when to commute? More time with the family and indulging in your favourite past times?
Enticed by the overnight success adverts on Facebook! Pictures of Ferrari’s, 5-star hotels and tropical holidays enticing you to buy their “get rich quick”, "stay at home", "passive income" programs.
You’ll have arrived in a place where real life meets your utopian dream! A sort of heaven on earth!
But wake up!
The dream is over!
These visions and dreams drive the romantic notion that many people have of owning their own small business. Enticed by the thoughts of freedom, no boss, working on the beach or some exotic co-working space and a 20-hour flexible work week.
A few years of struggle and then selling the business for millions.
While that’s a great vision, the realistic fact is that most small business owners are not capable of making these dreams a reality.
And this horrible reality is supported by cold hard statistics.
The First Hurdle is YOU
From the start many businesses are doomed to failure as the potential small business owner sets off on the wrong path.
With the wrong mindset. Consumed by passion and a dream.
But with either no business skills or an incomplete skillset or no experience of how to start or grow a business or any of these.
Many people decide to start a business after losing their jobs. Not having much clue what to do.
Thinking that once they get it going, they should be able to "figure it out", knowing that there are some gears that should work but failing to see all those warning lights on the business dashboard.
From day one the business is destined to struggle as it is not built on a solid foundation, or with the right steps in the right order.
The Rewards of Starting a Small Business
But getting it right and having a successful small business is rewarding and financially satisfying. Enjoying the many advantages of business owner freedom. And while most SMB’s fail there are many that meet or surpass any dreams.
But this success is far easier said than done and there are many potential pitfalls between the start and final success.
The biggest pitfall is that many small business owners are unprepared for the journey.
They set out without a clear destination, no maps or food for the road ... driven by a hope that they will get to where they want to, but not knowing precisely where that is.
“Would you tell me, please, which way I ought to go from here?"
"That depends a good deal on where you want to get to."
"I don't much care where –"
"Then it doesn't matter which way you go.”
― Lewis Carroll, Alice in Wonderland
Driven by blind passion and an undefined “mission” heading towards the cliffs of doom like a lemming. Ignoring any advice that doesn’t fit with this “mission”.
While I agree that there will be many groundless naysayers and critics, this is the time to ask questions and listen. To reflect on all the information you collect and comments and suggestions you hear from anyone.
If you’re seriously thinking about starting a small business destined for success... take it slow... work step by step.
Through this process you’ll be pressured (often by the monkey on your own shoulder!) to make quick decisions driven by FOMO (fear of missing out).
To improve your chances of success you need a proven process, to do the right things at the right time. To be able to sift the real priorities from the endless list of "to-dos".
Takeaway:
Use advisors with experience. Ones that have been there before and have a proven record of success, and for you ... use your head but trust your gut!
Starting Your Small Business with Self Evaluation
It’s hard to accept but, there is a good chance that the small business owner themself will be the biggest barrier to success. Business success is not all about passion and purpose but vision, focus and relentless action.
Making many small gains and shrugging off the failures or “experiments” of all the things that go wrong.
Knowing that the only element that you have full control over is yourself and the choices you make.
Getting this first step ... the YOU ... right will improve your chance of creating a successful business and avoid being one of the many financially disastrous and emotionally painful failures.
During this time, you will be the victim of many conflicting cognitive biases. The idea of a small business is very alluring, and it's easy to be trapped by the Dunning-Kruger effect, which when added to a dash of confirmation bias and loads of optimism leads to a toxic cocktail.
Remember that “You don’t know what you don’t know”.
That said, this is the time for honest self-analysis and to understand that not everyone is suited to small business ownership, and everyone needs help at some time.
Throughout the evaluation process ask lots of questions and carefully assess the answers.
For the business to have any chance of success your vision must be clear. As it is a well-known fact that all great businesses have a sharp vision.
They also understand their “why”.
So, this is a good place to start. Asking, “What is my why?” Why am I doing this? What do I want? What is my vision?
Will the potential payback be worth the pain and suffering of the relentless day-to-day business battles? The battles where the probability of success is less than 20%!
If you don’t know your why or if you are not clear about the concept, then watch this inspiring Simon Sinek video.
Are you committed enough?
Running a small business will be endless – late nights, weekends, missed family occasions, “unreasonable” customers, difficult staff, and trudging through bureaucratic authorities.
- Are you prepared to make all the required sacrifices?
- Are you tough enough?
- Will you keep going when it looks like everything is against you?
So before even thinking about what kind of business to start, think about yourself.
- Do you have the skills to be a business owner? Are you willing to ask for help? Are you willing to learn new skills? Living in a world of change and challenges?
- Are you prepared and committed to take on the responsibilities and challenges of being a business owner?
Many small business owners start out not realising that a small business is a work trap. Where without any support systems or the resources of a big business everything depends on you.
So, while it is easy to see all the benefits it is easy to overlook the challenges.
The emotional and physical costs of business failure are high. You must be resilient, accept that there will be failures on the path to success. But knowing that the rewards of success make it all worthwhile.
Takeaway:
Take the time to honestly evaluate whether you are cut out to be a small business owner. Whether you have the skills, expertise and more importantly the determination and grit to stay the journey.
Do this important first phase well and you are then building the business on a solid foundation.
Questions to ask Yourself before Making the Final decision
- What industry knowledge do I have?
- Am I a self-starter or do need to have other people tell me what to do?
- Am I good at planning, making decisions and carrying them out?
- Am I open to suggestions, criticism, and change?
- Am I able to set goals and deadlines and meet the deadlines?
- Will I be able to stay focused even when things are difficult?
- Am I both optimistic and realistic?
- Am I honest in all my dealings with other people?
- Do I learn from my mistakes and make changes based on what I’ve learned?
- Am I self-confident?
- How much time will I be able to devote to starting and running the business?
- How much money can I afford to put into starting a business?
- Am I willing and able to take on debt to start a business?
- How soon do I need it to make money from the business?
- How supportive will my family members be?
- How much money will I need to get out of the business to keep a roof over my head and food on the table?
- What kind of business would best match my interests and skills?
By now your YOU reality check will be complete.
If you've decided you are prepared to take on the challenge, then it’s on to the next step - how to start a small business.
Takeaway:
Not everyone is cut out to be a successful small business owner.