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Five Things To Check Before You Start Your Own Business

This article is more than 9 years old.

For so many of us, being our own boss is a dream—perhaps the dream. Today, it’s easier than ever to put up a shingle.

I’ve been an entrepreneur for 15 years and have started three businesses. I’m in continual amazement at how cheaply and efficiently you can get a business going. It wasn’t that long ago that you needed to finance a phone system and servers as they were prohibitively expensive for a startup.  Now, just about everything that used to be labor and cost intensive – from marketing to bookkeeping – can be done inexpensively through technology and cloud computing.

No longer do you need to rent that fancy copier/fax/scanner, you can use a home office printer and TurboScan. Need a bookkeeper? Do it yourself by tracking your expenses through Expensify and managing invoices via FreshBooks. And that expensive phone system with its requisite landline? Instead, get a free business line using Google Voice or spiffy conference capabilities with Uber Conference. And there are a host of services for finding just the right talent for just the time you need it.   

It may seem that the barriers are so low that now anyone can run a business. However, getting a business off the ground isn’t the same as creating a profitable, ongoing enterprise. I spend a good amount of time with entrepreneurs in my work and volunteer time. I also teach in Georgetown’s Institute for Transformational Leadership program helping coaches develop their entrepreneurial chops. 

Should you throw your paycheck aside and make the jump? When is the right time? While the answers aren’t straightforward, here’s some advice I can provide.  

1. Expect to invest upfront.

Yes, startup infrastructure can be cheap or even free. But you still need to consider the implications of brand. To get started, you need to pay for a quality logo and website, legal and professional fees, as well as for some technology. While incrementally inexpensive, the costs can add up.

There’s also a rub about the cheap alternatives – sometimes they look like it. As a new business, you need to show an enduring and professional image, and you can’t look like you’re operating on a shoe string even when you are. For example, the do-it-yourself websites can be visually unappealing and awkward to navigate -- and even damage your brand.   

This is where a good business plan comes into play. Knowing all of your startup costs upfront will tell you if you’re prepared financially to cast out on your own. I typically advise setting aside 5-10K for startup costs as a benchmark for services firms. You may find it wise to do much of the setup work while you still have a paycheck to finance it.  

2. Realize that it takes 2-3 years to establish a good book of business.

I have learned this lesson several times over. You may in fact have clients right away, which is a great way to start. Still, it takes time for word of mouth and referral business to kick in. Patience—and a lot of hard work to establish a solid reputation—are key here.

Part of that work entails the basic block and tackle of mining your network for business. But eventually you’ll need to create ways of generating business beyond your immediate circle, which requires marketing. Start this in the beginning, and as you establish your brand, consider how you might incorporate an email newsletter, blogging, social media or even traditional PR.

3. Prepare to sell yourself—and for that to be the status quo.

I know many entrepreneurs who say they just want to do the work, and aren’t interested in being in sales. My advice: if you don’t want to devote a good portion of your time to sales, then don’t go into business for yourself. You’ll never be able to fully outsource this part of owning your own business. Clients come and clients go so you must always be developing new prospects.  

That doesn’t mean you have to be a natural salesperson or an extreme extrovert to close business. In fact, a meta-analysis of 35 studies of nearly 4,000 salespeople found that the correlation between extroversion and sales performance was pretty much zero. In reality, ambiverts, those people that tow the line between extroverts and introverts, tend to be the most successful salespeople. The good news is that the majority of people are ambiverts, so most of us can be effective salespeople and learn to sell on our own terms.  

4. Be open to evolving.

Most businesses change over time, and what you set out to do may not be what you end up focusing on. To be a good entrepreneur is to see uncertainty as opportunity.

Embracing evolution means being open to risk. A Copyblogger post by Johnny B. Truant makes a persuasive case that the ability to evolve is the top skill that makes an entrepreneur succeed: “You’ve got to learn to be uncertain and take risks. If you stay within what’s known and safe, you will never be truly successful. Doing what’s uncertain and risky isn’t easy, and that’s why the people who dare to do it are rewarded.”

Google started out as a simple search engine, and see how that’s going.

5. People who are interested in multiple business functions have it easiest.  

Entrepreneurs have to do a little bit of everything, especially in the beginning. It doesn’t mean that you have to love each function equally, but it certainly helps if the important ones can hold your interest.

If you can’t imagine dabbling in finance, sales, marketing, product/service development, and delivery, then entrepreneurship may not be the right fit for you. Entrepreneurship is not only the act of wearing many hats, but also the act of prioritizing which hats take precedent over others. It’s a classic mistake of entrepreneurs to spend too much time on the functions they like best, i.e. delivery, and forsake those that the business needs, i.e. finance.

This also means that you have to be your primary motivator. No one else is going to tell you to sit down and run cash flow projections when you’d rather be creating fun client programs.

Now, back to the great news. If you have passion for what you do, you may find that all of the pieces of advice above are merely steps in your bigger plan. And if that’s the case, you can now get your business launched in a few weeks – or even days -- and begin making your dream your daily reality.

And to me, it is supremely cool to see so many entrepreneurs joining the party.

Kristi Hedges is a leadership coach, speaker and author of Power of Presence: Unlock Your Potential to Influence and Engage Others. She blogs at kristihedges.com.