Starting a business is not for the faint of heart. When the economy is soft, and jobs are limited, entrepreneurship is often the best way for a young adult to gain practical experience in their field of choice. To be sure, it can be scary, but so can sitting around waiting for a call for an interview for that perfect position.
With that in mind, here are five tips for planning your first entrepreneurial venture.
1. Find your obsession. “Find your obsession” is different from “follow your passion.” Your passion is something you love doing. Your obsession is something you cannot live without doing. And there’s a difference. A passion is sometimes borne from a hobby, for example, photography. You may be passionate about photography, but when the pressure is on to make money with photography that passion can wane in the drudgery of the daily work. Conversely, if you are obsessive about photography, rarely will any part of the work seem like drudgery. Passion will burn out; obsession rarely does. Obsession is what you need when starting a business.
2. Decide on your operational end-game. Once you find your obsession, ask yourself this: Do you want to have a “practice” or a “business?” A “practice” is a business that is dependent on your direct involvement, whereas a “business” can become independent of your involvement and still be successful.
A “business” in this context is one where you can rely on the collective work of others you employ to produce income, or survive as an ongoing concern if you were unable to work in the business on a daily basis. It can be bought or sold regardless of your involvement.
Having a practice means it is difficult, if not impossible, to separate the work output of the business from your personal output. For example, if you have a unique skill or ability on which the income of your business rests primarily on you to do the work (e.g., an accountant, yoga instructor, consultant, or tattoo artist) you are likely to have a practice. It is unlikely this type of business could not be bought or sold without your involvement.
There’s nothing wrong with either option, but it is important to understand what kind of business operation you want five years after you start because it will shape your decisions today. If you know you are going to be happy making a living as a tattoo artist chasing your obsession, then your business decisions will be made with this in mind. However, if your goal is to have a tattoo shop with ten employees in five years, your approach needs to be different. Keep in mind that most small businesses start as practices and evolve. Moreover, those who just wanted to “do their thing” end up trying to manage a business and are no longer working at their obsession.
3. Start your business “on the side.” Many say “jump” into entrepreneurship without a net. Having done it that way many times, I suggest you do not unless you have no other choice. The financial pressure is too high for most people. The pressure to make rent payments, buy food, and put gas in your car will have you chasing business that isn’t worth your time or in your area of focus so that you can survive. You will lose focus of what you are trying to accomplish, and few obsessions can withstand that pressure. My advice: Start your business on the side if you can. Get or maintain a job to have some income flowing. You will feel less pressure and be able to stay focused on our business goals. Then strive for your “choice number” with your business income.
4. Determine your “choice number.” Your choice number is that number which allows you the opportunity to choose between going full-time with your business or continuing to work for someone else. It is easy to calculate: Add up all of your current monthly expenses (all of them, Netflix, Hulu, gas, car payments, rent, food, beer, or concert tickets), then add 25% more to that number. So, let’s say your monthly expenses add up to $1,500. Add 25% more-$375.00-for emergencies, and you are up to $1,875.00. I would suggest rounding up for a little extra cushion to $2,000. So, $2,000 would be your “choice number.” Once your business is generating $2,000 per month, you have enough money coming in to cover your monthly costs and the choice as to whether to keep your day job or go full-time into your business with some financial security is now yours. Bear in mind the choice number can fluctuate some, so remember to revise accordingly.
5. Take advantage of reputable free resources. There are many, many free resources to help new entrepreneurs. My favorite starting point is SCORE ( http://www.score.org ). There you can find local resources, webinars, on-demand courses, as well as other resources to help you get started. The U.S. Small Business Administration ( https://www.sba.gov ) also offers many free resources and tips. Sometimes your local community college will offer free or low-cost courses for new entrepreneurs.
Although these tips do not cover everything a new entrepreneur might need to know, they are a good starting point for planning your first step into your own business.
Mindset of an Entrepreneur Is Important
Various emotions and thoughts cross your mind when engaging in the idea of owning your own business. Many entrepreneurs get a sense of excitement while also feeling overwhelmed. You then relish in the idea that you can be your own boss that writes and cashes your own checks. However, shortly after all the initial excitement has passed, you begin to wonder will my product or service work, will it sell, or will I be able to take care of myself? With so many questions that you establish a great response for, doubts and uncertainty often formulate an antithesis in the shadows of our mind. Preparing and reframing your mindset about yourself and your business will determine how you operate and make your business successful.
I once heard Bishop T. D. Jakes say in his sermon entitled “A Changed Mind,” you can never change your reality without first changing your mind. This statement has stuck with me ever since. It sounds so simple, but when you think about it, it is powerful. How often have you had preconceived notions about someone or something until you interacted with it or them and all a sudden, your perception is no longer the same from before your encounter? For instance, getting on a roller-coaster is frightening (especially the Fury 325 at Carowinds) but once you get on and scream to the top of your lungs when it stops most people want to ride it again. It wasn’t that the ride got less scary it’s just your mindset changed. What you believe will determine how you respond. If you’re constantly thinking, I cannot do this or I know “it” will fail, it is more likely that you will not be successful. It’s not because you did not have a good idea, or you weren’t capable, but you could not see past your doubt to see the success that could have been.
When starting a business, you must understand that there will be natural deterrents that may arise, whether it be capital, office or storage space, or even market potential if you are trying to create a demand. Nevertheless, how you view these obstacles makes all the difference. Having limited capital may require you to utilize every possible resource you may have. Do not be afraid or too prideful to ask for help. Not having enough office or storage space will make you strengthen your organization skills. Creating a demand for your product or service will cause you to be more creative than you ever been. It’s all how you perceive a challenge to be. Even with the unknowns do not allow fear to cripple you, instead let it be a motivator. We have an innate ability to fight or flight in any given situation. Choose to fight! Refuse to give up because of your past mistakes. In fact, reframe those mistakes as learning opportunities and never doubt your ability to break bad habits.
I would also like to stress the importance of having confidence in yourself. Think of it this way, if you had to buy a product or service from Eeyore or Tigger (characters from Christopher Robbin’s Winnie the Pooh) who would you patronize? Eeyore, the humdrum individual who was not sure of himself and found every opportunity to tell you how miserable his life was or Tigger the jovial, outgoing, charismatic who loved to laugh and have fun even when working? I would go for a Tigger every time. How you view yourself is how others will view you. Be your own motivator and surround yourself with cheerleaders. Having a good support system is very integral in the pursuit of turning your dream into a reality.
Finally, as the adage goes, birds of a feather flock together. Surround yourself with successful entrepreneurs. Glean from their past business mistakes and triumphs. Read entrepreneurial magazines and books, network by joining professional groups or clubs, and engage and talk with potential customers about the product or service you are trying to offer. Be unyielding in your pursuit of changing your mindset when it comes to yourself and your business. What you believe is how you will succeed. Believe the best, speak life into your business, and shut down the voice of your insecurities. After all of that take the leap of faith and fly.