6 personal factors that play a big role in starting your own business
Are entrepreneurs born or made? Some people are seemingly born with a knack for running their own show, while others struggle. Other people are content working in a well-defined role for a boss. Still others, such as outside sales people, enjoy a combination of both. Are your ready to take the plunge and become an entrepreneur?
Having started several businesses in the past, I know that the personal aspect is as important as the financial aspect. Having the right personal factors in place is an asset that’s difficult to quantify, but a person with all the money in the world and a bad attitude will fail in his or her business while an entrepreneur with a great mindset will find a way to overcome even the largest obstacles.
Starting your own business involves a higher degree and a greater quantity of risks than keeping a regular job. These risks may include financial burdens, the possibility of going out of business or even going bankrupt if the business fails. How do you currently react when things don’t go your way? If you’re starting a new business, get ready. Rarely do things ever go your way!
Then there’s the personal risks, such as not having enough time to spend with family or having to scale back on everything from vacations to private schools. Starting a business can be a money and time consuming project so, before starting any business, be sure you’re prepared to accept these risks.
How much time does your family need? How much time will you have to give them if your business is highly successful or if it struggles? How much time will they need in the next few years as you work to get things off the ground? I can tell you there were many nights my supper was waiting in the microwave and there were many missed soccer games and school functions.
Many entrepreneurs, myself included, can attest to the value of a supportive family. When I started the lumberyard, my wife was a rock of support. Knowing that your family and friends approve of your plans to start a business can improve your odds of success significantly. Having to justify your decision to an unsupportive spouse can be demoralizing, drain your confidence, and crumble your commitment.
When I started the lumberyard with my partners, we all had at least a decade of experience in the field. That experience helped us avoid pitfalls in areas such as granting credit to customers, handling vendors, and knowing what products to stock. The more firsthand experience and training you’ve had in your business field, the better your chances for success. You might consider going to work for a company in your field for a while or hiring employees who do have experience in that field.
If you’re a sales superstar, chances are pretty good that paperwork isn’t one of your strong points, so hire a strong bookkeeper. Yes, you’ll probably drive each other crazy, but you’ll also be able to get more done! You can’t be thin-skinned! Admit that everyone, including YOU, has weaknesses. How do you overcome them? Hire employees who complement your skills or gather advisors to balance out your skill set. Just make sure you have enough basic business skills on which to base your company.
If you can manage your own time and motivation, you’re in great shape. If you need someone to manage your time for you and get your motivated, entrepreneurship may not be in your best interests. Without a boss to direct efforts and monitor progress, it can be tough some days to accomplish anything. On top of that, having no other employees or colleagues around can make for a lonely work environment.
However, the lack of distractions may help you accomplish more in a shorter amount of time, allowing you to spend time with family and friends.
If you’ve been reading this blog for more than a few days, you know about my health insurance nightmare. Losing access to affordable health insurance is one downside of leaving a corporate employer and COBRA protection is extremely expensive. If your spouse’s employer offers coverage, you may be able to piggy-back on that policy or you may have to buy a new or add-on health insurance policy yourself. Take some time and investigate various payroll companies that for a small fee, will lump you and your employees into their group. We used a program like this at the lumberyard and it was very reassuring to know that all our payroll taxes were properly handled and we were able to get great rates on our insurance. Having insurance is crucial for your physical and financial well-being; an accident or illness can sideline you (and by default your business) unless you have insurance to absorb the bulk of the treatment expense.
Should you start your own business?
That’s a question only you can answer, but by evaluating the personal factors for entrepreneurial success as well as the financial factors, you’ll be going into this new chapter of your life with your eyes wide open.
What other personal factors should someone consider when starting a business?