The following is a guest post by Tiffany Rowe. Tiffany is a Marketing Administrator at Seek Visibility, where she assists clients in contributing resourceful content throughout the web.
Business is risky. In the blink of an eye, a promising startup can crash and burn – taking a sizeable chunk of its owner’s personal assets with it. Even if a startup doesn’t fail outright, it offers dozens of causes for concern from its founders, from financial instability to improper management of resources. Usually, a small business requires not only an entrepreneur’s full investment – of time, energy, and money – and failure can lead to personal and career ruin unbelievably quickly.
Thus, it makes sense that fear often dissuades would-be entrepreneurs from launching their ventures. However, just as with fears of heights or darkness, fears regarding business can be overcome. The following five questions address common worries associated with starting a startup; if you can ensure your business answers correctly, you should have nothing to fear.
1. Will You Generate Consistent Income?
Most entrepreneurs leave respectable, well-paying positions to strike out on their own. Of course, most expect to earn much more – in fulfillment as well as salary – by running their own businesses, but exceptionally high income is never guaranteed in entrepreneurship. In fact, even successful ventures typically don’t become profitable right away.
The truth is: You will likely endure a period of financial insecurity while your startup builds momentum, but as long as you properly prepare, you and your business will survive. Before you dive into entrepreneurship, you should pay off your personal debts – including student loans – and build a healthy savings fund to use while your business grows. Then, once your startup is properly funded, you can avoid this common business-related stress.
2. Is Your Market Appropriately Niche?
Any business idea that lacks an audience is a bad idea. To achieve success, startups must begin by targeting a relatively small portion of the market, ideally one that remains as yet untapped. Later, businesses can leverage their existing audiences to attract greater attention and market share, but initially, cornering a niche is the goal.
Unfortunately, it is possible to imagine a niche so small that your business lacks the consumer power to grow. To avoid this, you should perform ample market research before investing more time and effort into your idea. By looking into your perfect consumer – understanding age, income, education, and interests – you should be able to determine whether or not your niche is large enough to sustain a startup.
3. Does Your Team Have What It Takes?
Many startups begin with a lonely entrepreneur in a home office, but with success, they soon have staffs of a dozen or more. A thriving small business could even boast more than a hundred employees, who must all work together to accomplish business goals. If any one worker fails to cooperate – if any one team is underperforming – the entire organization could collapse.
From your very first hire, you must be aware of the dangers of hiring someone who is less-than-qualified for the work. However, it is just as important that you find people who fit your startup’s brand and workplace culture. By being cautious and deliberate with your staffing choices, you should build a strong team destined for success.
4. Is Your Timeline Realistic?
Once entrepreneurs gain confidence in their ideas, they often feel compelled to move quickly. After all, time is money, and the longer it takes to form a startup, the more opportunity someone else has to steal the market. Most entrepreneurs must fight this instinct to be more methodical in their business-building. However, acting too slowly can be a cause of downfall, as well.
While you are writing your business plan, you must pay special attention to your business timeline. You should allow your business enough time to develop its products and services – finding possible issues and improving design and functionality sufficiently – before going live. You should also make flexible plans for expanding your startup, though when exactly this happens will depend on your early performance.
5. Are You a Great Manager?
Plenty of people have the spark of imagination or the excellent organization to build a business. Likewise, plenty of people have amazing leadership qualities, like communication, determination, compassion, and commitment. It isn’t common that an entrepreneur has both of these skill sets naturally, and typically, successful entrepreneurs aren’t the best at leading teams.
If you aren’t sure whether you can be an excellent manager, you should consider preparing for this role by taking a few management courses at a local or online business school. You don’t necessarily need to earn an MBA – though MBA programs offer skills and knowledge ideal for entrepreneurship – but you should find a safe space to practice leadership before your career depends on it.