Starting a business might seem sexy and exciting, and at times it is quite a thrilling ride. But some people tend to over-focus on the glamorous part of starting and running a business, and they don’t pay close enough attention to the difficult parts of running a business like 80-plus-hour work weeks, no vacation, no stability, possible family life complications, constant high stress levels, and financial risk.
Here are some things to consider and answer about yourself and your business ideas before embarking on the long and arduous road to creating a business. These concerns will come up at one point or another, regardless of whether you want to think about them now or in due time. Of course, it is better to think through something as life-changing as starting a business rather than getting blind-sided months or years down the road when these issues do come up.
1) Your Personal Risk Tolerance
Risk is not just measured in dollars. To seriously think through how much you are willing to risk, try to answer to yourself whether you can spend a few years of your life working on a particular project that will most likely fail. Consider how long you can go without pay, how much stress you are willing to undertake and possibly how much damage to your health from the stress you are willing accept. Can you afford damaging your relationship with your family since quite often, you may need to devote more care to the business than to them?
Also, risking is not that scary if you approach it as something theoretical. Try to picture yourself truly having lost what you are actually risking, and realistically put yourself in your own shoes after having potentially lost the things you are willing to risk. Everyone can “just wing it” but it is important to really consider whether you want to risk essentially everything possible, and whether
the alternatives are truly not better for you.
2) Risk To People Close To You
Our actions affect everyone around us to various degrees. It is important to understand that being involved in business may take over our lives and we may not always be able to provide time, attention, care, or finances to our loved ones. To take this point further, while trying to grow their business inch by inch and step by step, amid all the stress, entrepreneurs can sometimes lose their good judgment and spend money that could have gone to their children’s college fund or help their parents retire.
You have to set clear limits on how much money you can afford to lose or not earn, so that your ventures do not damage the people around you who may be helped by that money.
3) Passion Level vs. Boredom Level
Despite the surreal risks outlined above, many people still go into business and entrepreneurship. Why is that? In many cases it is because the process of creating something out of nothing is incredibly rewarding. Plus, being able to pursue your own passions ads a great dimension to your quality of life if that is something that is important to you.
Starting your own company is more rewarding than just having the opportunity to succeed financially. Often, it is about passion and waking up a drive inside oneself.
While having a stable job may provide great benefits like steady paychecks, stability, reasonable working hours, and less stress, people tend to get lulled into the routine and slowly go through the same daily motions with some underlying dissatisfaction in spending most of their time making another person’s dreams come true.
There are pros and cons to each option. Generally, people first get a sense of the working life, and if they feel it is something that reasonably matches what they want, there isn’t too much that pushes them towards entrepreneurship. On the other hand, people who aren’t too satisfied sitting at a job, end up seeking other options, and starting their own company may be a better match for their personalities and ambitions.
4) Go With Your Strengths
Once you have thought through the risks of starting the business, you have to consider and embrace your strengths. Embracing both, your character strengths and your business strengths can help align your business on a path that is well-suited for you.
Character strengths can carry you a very far way on the path to success. If you are resourceful, it will help you get around dead ends and maneuver around changes within the overall business environment. If you are hard-working and determined, your effort will help you scale the insurmountable. If you are a quick learner, you can do the job of a few people at once, especially at a small business.
But character alone does not guarantee success. You must also have some strengths in the area within which you are embarking to do business. If you are a software engineer, it will greatly help you in web business because you will not have to rely on others to create or update your product. If you have experience or savvy in a particular niche, it will give you a sixth sense which will help you steer your business and avoid pitfalls.
5) How Long Can You Starve?
Once you decided to give entrepreneurship a shot, you have to realize that in most cases it is quite a tough road to travel. You have to be honest with yourself about how long you can go without making a decent (or in some cases any) salary. Sometimes it even takes a number of failed companies to fully comprehend the common business pitfalls and get a business heading in the right direction. These failures can take years and you have to fully realize what you are getting yourself into.
There are a few stories such as Facebook where one brilliant guy smoothly grows an incredible business without any large obstacles or difficulties. That is incredibly rare. In most cases, it is an epic struggle to create a great product and generate enough interest in it to make it grow and flourish.
All this takes perseverance and resolve. You have to make sure that you are up for the challenge when the going gets tough because it definitely will. You may notice a consistent point I am making throughout the article: that things may take much longer than you would hope or initially estimate. Make sure you are financially prepared and have ways to support yourself through the hard times.
6) Do You Have The Emotional Stamina?
Once you start a business, there will be times when it may seem like the weight of the world is on your shoulders and they are collapsing. There will be times when it will seem like no one cares about your business and it will fail. There will be days when nothing goes right, when the phone does not ring with calls from customers and your mail box will be stuffed with bills. Everything you will want to happen will take longer than you would prefer. Your close ones may lose faith in you as a business person. Your partners may decide to quit. Your spouse and other close ones will inevitably complain that you spend more time on your business than with them, and they will be correct. There will be money issues and hundreds of other little pressures will come from every direction. They will give you an uneasy feeling of constant pressure and urgency, which will make you take wrong and hurried business decisions.
I am not exaggerating. It is likely that at some point this will all happen. It isn’t a nightmare scenario. To some it is just Tuesday afternoon. It is all about how mentally tough you are, and how prepared you are to deal with these issues when they come up. We are all human and without being prepared for all of this to happen, it is likely that most of us will crumble under such pressure. Make sure you have enough mental fortitude to not be affected too much by these things and try to have ways to deal with each of the points mentioned above in constructive ways.
Get “buy-in” from your family and make sure they are supportive. Have plan-B for generating at least some cash and changes within the team. Make sure you can persevere.
7) Are You at Least a Little Insane?
The risks I had mentioned above are tremendous. To realize what is at stake and still move forward does take a little insanity and extreme risk pursuit. I am no psychologist, but time and time again, I see examples of successful entrepreneurs being people who are slightly off keel. Who else would risk money, health, potential family problems and more, all in pursuit of something that is not guaranteed? Reasonable and logical people simply realize the great risk, and pick something else. Being driven to the point of being slightly insane will really help you move forward.
8) How Driven Are You, Really?
Some people think it is fun to start companies, and that after a short time they might sell the company and get rich. As I mentioned before, that is not how things usually work out. It takes years of grueling work and tremendous emotional ups and downs. You have to fight for every small win, just to realize how insignificant it was in your overall success path, and that ultimately you will need hundreds or thousands of such small wins to grow your company.
There is also the finance question where quite often more money can be made working a traditional job. Many people simply quit or lose interest along the way. Only few very determined people carry on through all the tough times. Before starting a company, ask yourself whether you have enough drive for the particular project or entrepreneurship in general, to make it through the tough times and persevere.
9) Vetting Business Ideas
Once you get all the risk tolerance, determination, and perseverance questions out of the way, the question becomes: what business should I start? This obviously deserves an article (or an entire book) to itself, but here are just a few key points that should be considered:
- Does the business solve a pain point that someone else has, or does the business make their life somehow easier or better?
- Is the business in a space in which you have passion, experience, and savvy?
- Make sure you have the resources to compete in the market you choose. Big ideas and goals require lots of resources (time, people and money).
- Talk to as many people as possible to get second opinions on your ideas to see how these ideas resonate with others. It will help you get opinions from many different points of view, and help you in case you are missing some piece of logic, or realization.
10) Getting Started
This is such a simple and fundamentally crucial step. Thinking and talking about business ideas can be fun, but unless you start, the conversations about starting a company will get old and boring to the point of being irritating. At some point, one just has to start. None of the good ideas will come true if you don’t start to work on them. Regardless whether in theory your idea is plausible or implausible, you can make it work if you put in an unbelievable effort.
The secret of having a successful business is to at some point start working on it. The secret of getting started is breaking the huge challenge into small and manageable tasks. Then just start on the first one and off you go — good luck.