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When to start your own business?
Q: After working at one company for 10 years, I would like to begin my own business. What issues do I need to consider, and how do I know when it is the right time to take the big step?
1.) Do I have a business plan?
A clear business plan is essential, and the lack of a plan is a frequent cause of business failure. A business plan helps you assess, in advance, how you are going to address key issues. I have found planning software, to be very helpful. It may take weeks or even months to develop a quality plan, because your ideas may need a gestation period before fully coming together. Throughout planning, it is important to find a source of objective feedback — ideally, someone who clearly understands the process.
2.) Do I have the energy and physical stamina for the venture?
Owning your own business typically requires long hours, and stamina is essential. It is common to work 12 to 16 hours a day, particularly during the first several years. Be prepared, and be honest with yourself. If you do not already have an exercise regimen, begin one now.
3.) Can I get the money I need to support the business and myself?
If your business plan is interesting and enticing, money will be available. Although most banks have little interest in financing a start-up these days, they can help you secure an SBA (Small Business Association) loan. An SBA loan can be valuable, even though it may require repayment before you can raise money elsewhere.
Another approach for financing your business is the family and friends model. If you go this route, do not overlook the strings attached. Your family dinners and get-togethers can quickly turn into shareholder meetings, particularly when your business is struggling!
There are numerous other options. Couples with two incomes may be able to independently afford the transition of one spouse into business ownership. You may be able to fund the business yourself, especially at the outset. Several years ago, I left my call center business, because it no longer filled my passion. I began my new business, executive coaching for entrepreneurs, by using money earned from my first venture.
4.) Does my family support this?
It is important that your family truly understand the demands of business ownership. There are subtle differences, for example, between working long hours for someone else and working long hours for yourself. “My boss needs this done by tomorrow; I have to miss Johnnys game” becomes “I need to get this done by tomorrow; I have to miss Johnnyís game.” Before writing your plan, make sure all your stakeholders are aware of the details.
5.) How do I feel about making critical decisions and being responsible for others?
Owning a business requires constant decision making, often with no time for self-reflection or opinion gathering. Depending on the business, you may become responsible for other peopleís livelihoods. Their families will count on their incomes, and your decisions and behaviors will significantly influence their lives. You will no longer be responsible for your family alone, but for all families supported by your business. From experience, I can tell you that this is more stressful than you might imagine!
6.) Am I willing to do things I have no business doing?
Owning a business may force you to learn subjects and perform tasks that have never been your forte. Aside from French, accounting was my worst subject in school. Today, I am quite good at understanding numbers, purely because accounting skills are critical to successful business ownership. Similarly, I quickly learned to repair computers when we could initially not afford a service contract. If you resist doing things that you do not know how to do, reflect hard on your decision to start a business.
7.) Is your soul calling you?
I have always admired those who just ìknewî it was their time, almost as though their souls were calling them. They reached a point when they could no longer work for someone else. Your soul may be calling you. Have you begun arriving to work with your body, but not with your mind? Are you working to earn money, but dreading every moment of it? These are potential signals that it is your time. Just remember, however, your soul does not give a ìGet out of writing a business planî pass. Remember, your business plan is essential.
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Making any decision without having all of the information and facts beforehand can be very tough. I spoke with a young man recently and he told me that some of his professors had changed the rules on him in the administration of his classes. The syllabuses of a couple of his classes had been altered, which switched exam dates. He was also notified of these changes after the semesterís grace period. The grace period in which he could get his tuition money back after dropping a course had passed. Because of the changes, he would have two to three exams on one day.
I agreed to him that it was not a fair thing for them to do and that he wasnít given all of the facts in order to make an adequate decision. This young man had to make a decision to take the courses the way they had been altered or to drop the courses, forfeit his tuition money and delay another semester until graduation. It was interesting because I was about the same age as this young man when one of my undergraduate professors told me that you are not going to have 100% of the facts needed to make a decision in the real world. He told the class that if weíre lucky, we might have 50% of the facts in order to make a decision. I had told this young man about what my marketing professor had said and he thanked me for this piece of advice.
Months later, I had thought about one of the most drastic decisions anyone has had to make in the 20th Century without having all of the facts before him. Harry Truman became president of the United States in April, 1945 after Franklin Roosevelt died. Roosevelt never informed Truman about the Manhattan Project. Suddenly, Truman had access to three atomic bombs and the authority to use them in World War II against the Japanese. And you think that making some decisions can be tough? Truman had the fate of history in his hands while pondering what to do.
The point is that Truman, like many other decision-makers, was faced with very limited information and had to make a decision and follow-through quickly. At some points in our lives, this happens to us all. But even if you do not decide to do something, your indecision is your decision. Not to decide is to decide.
So, how do you make a decision when you do not have all the facts? Follow this process:
1. Review the facts that you do have. Truman had access to three atomic bombs. Each bomb had enough power to destroy an entire city.
2. Analyze your facts. Truman witnessed the testing of one of the atomic bombs in the desert and was made more aware of the actual intensity of the bomb.
3. Analyze how your facts will affect your future decisions. Truman was given an estimate about the number of American soldiers that might perish in another major battle with Japan. Trumanís option was that the atomic bomb could be used in lieu of attacking a Japanese city and would avoid excessive American casualties.
4. Take action. Truman ordered that the remaining two atomic bombs be used against the Japanese on Hiroshima and Nagasaki. Using both bombs in battle ultimately ended World War II quicker and avoided additional American casualties.
Great decision-makers, like Truman, act when necessary and take full responsibility for their actions. Although the outcome may or may not have been what Truman had planned, a decision was carried out. If Truman did not make a decision, the war would have lingered and more American lives would have been lost. Although the decision may not have been a popular decision at the time, Truman knew it had to be made.
None of us have crystal balls and have access to future information and events. Truman was no different. Although we donít know the exact outcome of a decision, we can take conscious action and make a decision. If we donít decide, someone or something will decide for us. We decide by decision or indecision. Which one will you choose?