Should I Start a Business?
You may be asking yourself this very question. However, instead of trying to answer this broad question, I suggest instead you ask yourself the following list of 12 more specific questions.
By answering these questions you will more easily and decisively be able to answer the broader question of “Should I Start a Business.” Furthermore, if you do decide to start a business, answering these questions will give you more confidence and strength in your choice of moving ahead.
After you ask yourself these questions, I highly recommend you check out our guide presenting how to start your own business in 5 steps.
The human mind likes simple binary choices such as that, an evolution of the basic “fight or flight” syndrome man faced centuries ago. However, considering only one simple question like that in starting a business could lead you to a decision that you may regret.
It should also be noted that part of the answer to the question: “Should I start a business” depends on your business idea. Small business ideas are not created equal and some of them – Restaurants for example – have a higher likelihood to fail.
Ask Yourself These Questions Instead
Instead, I would suggest that you probe deeper by asking yourself additional questions relating to whether or not you should start a business.
Here is a 12-question list that I put together:
- How much cash will I have at risk?
- How much time will it consume?
- How much energy will it take?
- Do I currently have other obligations that will prevent me from giving the business 100 percent?
- Would there be a much better time for me to start a business other than now?
- What are my alternatives if I don’t start a business now?
- What are the chances of success?
- Am I looking at starting a business from a position of relative strength – feeling good about myself and feeling I am relatively well off – or am I looking at starting a business from a position of relative weakness – recently laid off from a job and being behind on my bills?
- Can I test-run the business part-time before quitting my job?
- Should I choose between a higher-risk or lower-risk businesses?
- Suppose my business provides less income than I expected. How long should I stick with it?
- If the business doesn’t work out, how easily will I be able to pick myself up and move along to the next endeavor?
You Have to Weigh the Risk vs. Reward
For example, maybe you are fortunate enough to currently have an excellent, highly paid corporate job with terrific fringe benefits and good advancement potential. The key question for you might not be, “Am I going to start a business?” Instead, it might be, “Am I going to start a full-time business that will require me to quit my primary job?”
Similarly, let’s say you’ve worked for many years and saved a lot of money and are close to retirement. Now you think you want to start a business. So the key question for you may not be, “Do I want to start a business?” Instead, it may be, “What is the maximum amount of money I am willing to risk on a new business, if any?”
Your initial investment will have an impact on which businesses you can start. But it doesn’t mean that you can’t start a business on a small budget. Check out these startup business ideas you can start with $2,000.
Starting any business involves risks. And for most businesses, significant risks, as the failure rate for new businesses, is high.
Hard Limits Can Reduce the Fear of Starting a Business
Facing risks makes people fearful. Often, you can reduce the fear and feel better about starting a business if you have limits – firm, hard limits; limits that you write down and put right in your business plan.
For example, you may decide your hard limit is that you will not start any business that interferes with your day job.
Or you may decide your limit is to not invest more than $100,000 in your start-up business.
Or you may decide that you will only try a new business for one year, and if you don’t have at least 50 customers and $50,000 in sales after that period, you will shut it down.
So as you can see, deciding whether you should start a business can be complex and require some exploration and thought.
While having limits is a good way to make your experience less stressful, you should also choose an easy business to start. Especially if it is your first time starting a business.
Not Having Specific Limits Can Get You Into Trouble
You might be thinking, “Why should I limit how much money or time I put into my business; I want to think big right off the bat and do everything right and as well as I can.”
Well, that’s the kind of thinking that can get you into trouble. If you are at all anxious about pouring all of your time and money into a business now, imagine how anxious you will be on the days when it looks like the whole show may go south (and almost every business has those days). That’s why, for many people, the best approach is to start small with specific limits. In fact, you might want to first start a business that you see as just a simple test business, to get your feet wet and build your experience. It will be time well spent, I assure you.
Before you start your business, it is absolutely crucial to have a plan.
So, when you start thinking about your business, even in the very early stages, I would encourage you to start creating your business plan. You don’t have to write the whole thing yet! Even just building your business plan outline will help you identify the potential strengths and weaknesses of your future business.