As a small business consultant, former SCORE senior advisor, and serial entrepreneur, I’m often asked, “Should I become an entrepreneur and start my own business or not? I want to get out of the rat race, but I positively am not sure I want to take the risk. I’m not sure if my idea is good enough or not. How do I find answers to these things?”
My response is always, “Let me give you my set of personal and professional questions you need to ask yourself before you jump off on the deep end.” Being an entrepreneur is not as easy as it might sound or you might expect. It’s tough work, both personally and professionally, often by yourself. It’s even harder to be recognized as the “jack of all trades.”
The 7-Basic Entrepreneurial Questions
I’ve developed a set of questions that will help bring the decision of choosing to be a full-time entrepreneur, part-time entrepreneur, or not choosing to follow an entrepreneur path at all. Because becoming an entrepreneur, whether full or part-time, is a significant leap for the individual, and potentially impacts your friends and family, it is important to be mentally, financially, and physically prepared for the change that will be in your life.
So here is where you get a pencil/pen and paper, a refreshing beverage of choice, a cup of tea or coffee, and a private, quiet place to think and write. Give these answers your undivided attention, thinking through with openness and honesty. These questions aren’t for the faint of heart. This is where you gain clarity for what is yet to come.
1. Are you truly prepared to be an entrepreneur?
This question gets to the heart of the “dream” versus “reality.” It feels good to be your own boss, set your own schedule, and keep all the money you make. It feels good to be off when you want, come and go as you please, and live the life knowing you’ve built something from the ground up. However, most small businesses fail in the first year, causing the owner to have to go back to a job. Being an entrepreneur, whether solo-, micro, or small business, is incredibly hard work. A fantastic way to get a first-time feel is to take an Entrepreneurial Quiz. There are many out there that are free, but I particularly like this one.
2. Are you Blessed with the Entrepreneurial Spirit?
What I would ask you is, “Do you have a sense, passion, and desire for adventure? Are you ready to dive into the risks and sacrifices, such as time away from friends and family; sixty-to-eighty-hour work weeks; sleepless nights, disappointment, rejection, risk, financial upset, and yes, even failure? These can come with the territory. Being an entrepreneur is a 24/7, full-time job. If the answer is yes, you want to embrace that spirit, then you just might be in a better position for long-term success. Most importantly, are you physically and mentally ready to take on the highs as well as lows of entrepreneurship? It is exhilarating and taxing at the same time. But it takes a generally healthy mind and body to achieve success. The only way to meet this is to prepare, prepare, prepare, and then prepare some more!!
3. Do You Have an Awesome and Viable Idea?
Standing in the shower, driving in traffic, walking the dog, and so many more places, people think of zillions of ideas every day. And, although they may be some serious out-of-the-box thinking, not every idea can be transformed into a small business. The only way to be sure this idea will pan out is research, research, and more research. Check out 5-Steps to Take Before Starting Your Small Business. Steps 3 and 4 are necessary. Some questions to research and answer are: Am I selling a product, service, or both? If a product can be produced efficiently and effectively? Who is my potential customer? What is the competition in this market? Is there a market for this product or service?
The main question to ask is, “What are you passionate about?” What floats your boat, turns your crank, and keeps your attention day and night? Ask yourself why you are so passionate about this idea, and is it at the top of your list of interests? Does it bring you joy, align with your passions and interests, and offer bliss?
Three ideas to help you answer these questions and more are:
Create some thought experiments of hypothetical situations where your idea is tested. Here are some examples.
Ask the friends and family you trust or others who have started a small business. Get honest feedback, and be open to listening.
Hook up with SCORE which is a fountain of resources, honest information, and feedback. Get a free SCORE counselor in your identified industry, and see what they have to say.
“Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful.”
Albert Schweitzer
4. How Good Are You at Leveraging Technology?
In today’s market, technology is everything. Even if you are a handmade crafter, blogger, freelancer, machinist, or any other profession, technology is what gets it done. You need to understand not only the industry you are in, but also know how to use the technical and digital tools that are available to you. It’s imperative to educate yourself before you even start, on how to use technology to make your business successful. And, be sure to budget the costs for that technology while scouting out what’s out there that is free for you to use. At a minimum, it is crucial to know the basics of social media technology. Otherwise, your competition might swallow you like Moby Dick.
5. Do You Understand the Requirements for Hiring Employees?
Your biggest asset and biggest liability are always the same – employees. Before you start hiring, understand your obligations as an employer, especially what you can and cannot do. Employees are like the weather, ever-changing, and not always stable even in the best of times. No one works for someone else with pure altruism, and no one stays without some reason to do so.
Finding and attracting skilled workers is difficult, to say the least. Although many people want to work, since COVID, they want to work on their terms. Remote, freelance, part-time, and lack of interest in dealing with the process, and other reasons have caused workers to scrutinize who they work for and what they offer. It seems an employer is looking for that needle in the haystack.
What are the positive and negative aspects of hiring a family member?
Are you hiring for full-time or part-time positions?
What do you need to know about hiring contractors? Do contractors do the same as employees and, if not, what’s the difference?
Do your employees work remotely. and if not, do you have the required space for them to work?
What laws apply not only to the recruitment process such as discriminatory interview questions, but also the mandatory requirements such as unemployment insurance, and are they in place?
Do you have your policies, procedures, employee handbook, safety handbook, and job description in place? The list goes on and on.
Hiring employees is another stickler. It’s not only a costly proposition but can be time-consuming. Not counting the time it takes to source, interview, and make an offer, it takes time to do background checks, onboard, and get that new employee to a place of productivity. That’s all done while you are still doing your day job of keeping your small business running. Sometimes the challenge is the pay. As a new entrepreneurial business, it’s hard to compete with the same size or bigger than yours. Budgets are generally pretty tight and rarely are they stable.
Solution: Look at what unique perks competitors offer. Consider offering things like:
Flexible work schedules
Remote working
Job sharing
A four-day workweek
Bringing a pet to work day
One-on-one lunch with the boss
Friday food vouchers
Being creative with your unique perks will assist with attracting those that want to work and want to stay.
Retaining is a significant hurdle to overcome. You would think that employees would want to stay where there is good leadership and care about the individual. That only happens where both of those behaviors are there. Each step in the entrepreneurial process is one of personal reflection and learning.
Solution: If budgets allow, offer training and/or paid certifications. If budgets are tight, augment with collaborative weekly meetings to provide insight and information on current or new processes and new processes. If budgets allow, send a rising star to training with the understanding that they train the rest of the workforce on what they learned. This allows the rising star to demonstrate what they know while offering a platform for new hires to learn.
Tip: Some final tips for adding employees to your business. Hire a human resources consultant to help you for as long as it takes. A really good one can save you more time and money than you can imagine. It’s an added expense but look at it as insurance against the worst-case scenario. What you don’t know can put you back by thousands of dollars or even close your business. Be wise and take the time to find out what you need to do and how to do it. Take a course on basic human resources. Do your homework before posting an open position. Know who and what you are looking for and where those people might be. Have policies, procedures, the employee handbook, safety manuals, job descriptions, and all other processes in place before you begin. Why? Because as I said before, employees are your biggest asset and biggest liability.
6. How’s the Bank Account Looking?
Ask yourself:
Are you skilled at managing finances, not just budgeting but knowing about payables, receivables, insurance, etc?
With inconsistent income during the startup, and potentially for the next year or more, are you prepared for that?
Do you know how much money you need to sustain your current lifestyle?
Do you know where to cut back and adjust for that?
What do you do if you run out of money?
Creating a total costs budget is critical. There is an enormous list of costs associated with startup. Mapping out the total investment including your working capital needed to break even is imperative. Are you skilled with products like Quicken or QuickBooks? If not, think about moving in that direction. Being realistic and planning for the success you envision are the elements to get you there.
This is another area where you need to do your homework before you begin. What you don’t know can hurt you, so take a course in money management, and put a realistic plan in place.
7. Have You Discussed the Pros and Cons with Family, Friends & Others?
Having “the conversation” with your family and friends can be difficult. The best way to do this is when you have done your homework, have a plan, and are able to calmly discuss, from a realistic perspective, the pros and cons of your plan. Be in a position to offer an alternative, counter-proposal, and finally negotiate to reach a win/win. If all of the facts are revealed. This is a hard place for a family to be unless money and time are no object. Being an entrepreneur is not a one-person show. It takes a village whether family, friends, partners, business partners, a franchisor, or investors. Everyone needs to be onboard with the expectations, and know the good, the potential bad, and maybe the ugly.
Reaching out to professional networks, personal connections, and other supporters can assist you in framing your plans, aligning expectations, and asking the hard question may be the difference between a successful business or having to close shop.
Having these discussions will help you know who you can count on during the tough times, and will provide you with a clear sense of who can help and how going forward.
Once you’ve had an opportunity to digest this information, sail over to kaleidoscopecompass.com for additional articles and advice to better help you plot your path to entrepreneurial success.
Marcy Fletchall is the former CEO/Senior Consultant for HRchitects, Ltd., and a former SCORE colleague. She currently operates Kaleidoscope Compass a site that helps users navigate business opportunities. This post originally appeared on Marcy’s blog on December 20th, 2021, and is reproduced with the author’s permission.
