Do you want to become a business owner? Many people do, but they often lack the knowledge of what it takes to start, run, and grow a successful company. This article will give you useful tips and guidance before making the big leap into the startup world.
I’ll introduce a couple of trusted methods for decision-making that can help you decide if you’re ready to start your own business. Once you’ve launched your business, these decision-making tools can also be used to help you evaluate business problems you may encounter as you grow your company.
Are you ready to start your own business?
Go over your motivations
Entrepreneurs cite numerous reasons for starting their businesses, including needing a professional outlet that’s more creative, not liking their current job, or needing to make a greater income. The so-called Great Resignation has also led many aspiring entrepreneurs to search for something new.
No matter what your reason is for starting a business, make sure it’s something that will compel you to dig in and give it your all.
Fill a niche and find your target audience
Finding a niche and a target audience is another important task for upstart entrepreneurs. Sara Blakely, founder of SPANX and named the world’s youngest, self-made female billionaire by Forbes, got her start when she decided to cut the bottoms off a pair of pantyhose. Blakely’s insight resonated with consumers, and since 1998 the brand has grown to be a global phenomenon.
The takeaway here is simple: most products fulfill a need for a given audience. Find that audience, fulfill their needs, and your startup has a higher likelihood of becoming a success.
Test ideas before fully committing
Rather than launching a startup right out of the gate, like SPANX, you can give your products a trial run before doing a full launch. One way to do this is to run a pop-up shop and test your products there. This way you can get real-time feedback from customers as well as some face-to-face interactions.
However, in the testing phase, it’s important to not get caught up making constant revisions to your project. Remember, if you invest too much time in the testing phase, then maybe you should take a step back and reevaluate how much of a commitment you’re willing to make in your business. This leads directly into the next section.
Evaluate your time, resources, and energy
How much of a time commitment are you able and willing to offer your endeavor? If you have childcare needs or other important tasks that take up your time, consider how much time you will have available for your business.
Another important consideration is your finances. Where will the money come from to start the business? How will you pay yourself once things get started? Also, how will your business earn revenue?
Lastly, think about the energy a new business will take. Many people underestimate how many different skills are necessary to start a company. As a new business owner, you’ll be in charge of everything from finances to marketing to sales.
One way to walk yourself through all of this is to write a business plan that will help you navigate the startup process. Once you’re ready to start your own business, a business plan can also be used as a powerful tool for selling your business idea to other people, like investors.
Decision-making tools
Next, let’s take a look at some decision-making tools that managers use every day to help them solve some of their business’s biggest problems. Something important to point out is that not all tools are created equal. So, when deciding whether or not to launch your business, remember to consider different factors and use multiple methodologies. Many of the concepts we discussed earlier can be put to the test with these decision-making tools.
Pros and cons list
I’m sure you have used a pros and cons list before, but did you know that the earliest known description of a pros and cons list appears in a letter Benjamin Franklin wrote in 1772? Don’t underestimate the power of this simple tool! A pros and cons list will help you outline and evaluate the benefits and consequences of pursuing a new undertaking like starting your own business.
Decision trees
A decision tree works similarly to a pros and cons list, except it has a flowchart-like structure. With a decision tree, you can map out all the possible decisions and their outcomes. Decision trees are common in operations management and will weigh in probabilities.
For example, if you’re thinking of starting a business, you could factor in your probability of success and then map out potential revenues based on how much product you sell. In this scenario, you could say, low sales (30%), medium sales (50%), high sales (20%). This, when combined with an overall probability of success can tell you how likely you are to make a certain amount of money.
Like pros and cons lists, decision trees don’t necessarily give you a complete picture. However, a decision tree can be a helpful way to think through a problem and understand the risks involved.
Use your intuition
To wrap things up, let’s touch on intuition. Sometimes your intuition can actually be more valuable than any other decision-making tool. If you’re in a pinch about whether you’re ready to start your own business, it might just be best to trust your gut.
