A great way to begin building a business is to do it while you still have the security of a steady paycheck, benefits, and paid time off.
Before you take the plunge, quit your job, and dive into an entrepreneurial endeavor of any magnitude, take time to explore and reflect on key issues. Use these tips to minimize your risk, ensuring that your idea is feasible and needed in the marketplace.
Create a schedule you can follow.
Starting a business will be difficult and time-consuming. Start by considering how much time you can devote to your business idea while still working. Then, create a schedule. Write down a list of all the activities and commitments you have in your life, with the amounts of time you devote to each during a week. This will help you to see if you truly have the time to devote to starting a business while working your current job. If you still want to move forward after reviewing this, see where you can feasibly cut out or change time within your current schedule to devote to exploring and developing your business idea. Make an action-plan with achievable goals for a day, a week, or a month. Without goals, milestones, and a plan to achieve your goals, it is very easy to slip into a very unproductive mode. That may create a sense of discouragement or defeat, keeping you from pursuing your business idea.
Review your personal finances.
Realistically, you are going to need some form of sustainable income before your business can become your sole-source of income. One way to achieve this is by taking the time, while you still have a steady paycheck coming in, to do your research, evaluate your ideas and skills, and assess your personal finances.
Obtain a personal credit report.
You can get a personal credit report from any of the major credit-reporting agencies. This will help you get a current snapshot of where you stand financially. Check to be sure that everything on the report is valid. Begin correcting any problem areas now, since this takes time to correct.
Start saving money.
What can you cut in order to save? Be prepared. You will need money of your own to invest in your business. Most lenders like to see an owner’s investment of 10 percent to 20 percent in cash, assets, collateral, or a combination of all. So while you have the money coming in, start buckling down. Create a budget to start saving.
Take the time to assess your skills and how they will be used in your business. It is likely that you possess at least some of the necessary skills to make your business happen, but if you don’t, you’re faced with a tough decision. Spend time learning a new skill or outsource to someone else who can help. Obtain advice from industry experts, find mentors, join industry-related networking groups, and focus on getting connected with those in your industry.
Research the market as well as your competitors.
Decide what it is that will set you apart from the competition. Think about what the “need or problem” is that your business will solve. Fortune Magazine found that, “The No. 1 reason most businesses fail is a lack of market need for their product (this was cited by more than 42 percent of the failed companies). This really highlights the need to fully validate your idea and get honest feedback from potential customers before you start building, creating, and spending money.
To help you sort out all these areas and turn your idea into a reality, it’s helpful to use tools to organize your thoughts and plans. Use resources such as calendars, timelines, research tools, and whatever else you can come up with to effectively manage your time and ideas.
Develop a business plan.
Business plans are living documents. They will continue to evolve as you develop your business concept, start-up your business, analyze your growth, and work to achieve your future goals. It’s about being prepared with a plan and planning for the unexpected, developing your business concept and execution for both start-up and beyond. Most people are overwhelmed by everything they need to create a business plan. Therefore, it’s best to break it down into sections to make your plan become much more manageable.
Your plan is just one of many useful tools you can utilize to be sure you are considering and planning for the essential areas within your business. Business plans provide a business “roadmap,” a way to convey your concepts to others, and are a “must-have” item to obtain almost any kind of funding from financial institutions, investors, or government/nonprofit grants. You can find a business-plan template on the U.S. Small Business Administration website (https://www.sba.gov/tools/business-plan/1).
Tap local resources.
You can also feel confident in knowing that there is a bounty of resources and mentors available to you right here in Central New York. Most of them offer free and confidential counseling services to new or existing businesses. These resources include the Small Business Development Center (SBDC) at Onondaga Community College (OCC), SCORE, WISE Women’s Business Center, South Side Innovation Center (SSIC), CenterState CEO, the Tech Garden, and more.
So, have you considered the key issues laid out in this article? If you have and you find your business is feasible, needed, and properly planned, take the leap and work hard make your dream a reality.
Article published in the BJNN January 2018
This article is written by Keyona Kelly, certified business advisor at the Small Business Development Center located at Onondaga Community College. Contact her at firstname.lastname@example.org
We are currently offering clients the option to have appointments virtually, by phone, or in person BY APPOINTMENT ONLY (following CDC Guidelines).
Read articles and advice written by our very own Onondaga SBDC Business Advisors!