8 Smart Tips When Quitting Your Job To Start A Business
It is just so contagious. When we watch the flurry of reality shows like shark tank and movies like wall street with power characters running their own businesses, we want to get into that league and work for ourselves as well.
The power walk you swagger with along the street, the fast cars that you travel in at cruising speed, the meticulously luxurious living room as the back drop when you read the papers. Probably everyone would want to have that lifestyle. And you would probably be lying if you insist that that sort of implied freedom is not something you want.
Nothing can get you rich as fast as running a successful business. It’s not that you won’t become a millionaire by being an employee who has to butter up his boss each day. It’s just that the chances of becoming rich is higher if you are a successful business person compared to a successful staff who just got employee of the month.
Staring your own business might have been at the back of your mind for a while. And you can now feel that you are at the tipping point of going for it.
Before you take the plunge, take the following factors into consideration. There are still bill to pay at home. And you want to minimize failure as much as possible.
1) Plan ahead
I truly am unable to empathize when someone says that his business crashed within 3 months as there is not enough cash flow coming in to feed the business operations. When you start a business, aren’t you supposed to plan for that beforehand? You should have at least enough cash for the business to run for 6 to 12 months without revenue.
The point on cash flow is just 1 factor. The gist is that you must have an executable plan. You need to have a goal and a clear plan on what you have to do to attain that goal. Otherwise, you are planning for failure. When you don’t have a plan, it is a clear sign that you are not ready.
2) Set specific goals within realistic time frames
You want your business to succeed. At the same time, you don’t want to hang onto something that is just not performing. This is why you have to set fair goals to achieve within 6 month, 12 months, and so on. By doing so, you will be able to measure your progress against your expectations.
At the same time, you have to set realistic goals. Setting a million dollar goal within 12 months for a startup is really stretching it. If you consistently fail to meet your targets and business is actually declining, it could be a sign that you are just not cut out to work for yourself. It could be better to cut your losses than to sink ever deeper into a debt trap.
3) Is there a market?
The worst thing that can happen to startups is to go all out to market a product or service where there is no real demand for. These things can happen very often when the entrepreneur is blinded by his own vision of what can be instead of what reality is.
Don’t quit your job yet. To avoid running yourself into a concrete wall, spend some time outside your working hours to test the market. Use after hours and the weekend to research and survey the market whether your business proposition will actually attract your target market.
4) Network with business people
There are business people who are grumpy all the time and anti-social. But most business people are very friendly. So much that they are usually willing to share or teach you the basics. Even those who are selling a competing product can be friendly due to the possibility of partnerships and licensing opportunities.
Business owners are a minority when compared to the employees. So they often find it refreshing to meet others who are running their own businesses as well.
You could be surprised at how much a learning curve your can shave off by just talking to businessmen. For example, just the simple act of incorporating your company could be perceived as troublesome by you. But from talking with those with experience, you might find that all you need is to hire a service provider to do everything for you at a nominal fee.
If you can build a strong network before you start your business, your chances of survival is higher from the simple fact that you have more knowledge than the average Joe.
5) Learn the statutory requirements
It needs no explaining that when you start your own business, you are required to play by certain rules. Many new businesses get into legal issues not because they are troublemakers, but because they were not clear on the rules they have to operate within. Ignorance is not an excuse.
Learn your duties before you even start operations. Learning as you go is a bad move that can bite you in future. Different types of businesses have their own set of rules to play within.
For example, if you are going into the food business, there is a whole library of rules concerning hygiene, food processing, wholesale trade, etc, that you have to familiarize with. If you fail to be diligent from the start, it could already be too late when a consumer gets food poisoning from your negligence.
6) Separate personal and business funds
You need to embrace proper record keeping for your business so that you can file them correctly to the authorities. The tax man is not someone you want to mess with.
A common problem with startups is that owners are so engrossed in their business that they don’t put enough detailing to how their money is mixed up. They feel that their money is the business’s money and vice-versa. By the time filing needs to be done, they are left with a heap of a mess to clean up. Accountants might be able to sought them out. But they could be quite costly for a young company to afford.
With this in mind, the obvious solution is prevention.
7) Forget glamour until you can afford it
You might think that you need a proper office on a famous street to get the attention of potential customers, you need a prestigious name card to impress everyone around you, and you need to dress in designer suits to get that power walk right. These things are really not necessary unless there is a very specific need for it in your line of business.
A costly rental for office space on a branded street puts huge pressure on your overheads, a designer business card can cost you hundred of dollars just to design without printing, and really, your clients don’t care about what designer labels you wear.
People really don’t care if you work from home, hand out black and white name cards, or wear business shirts with belts and shoes that don’t match. What they care about is whether what you are selling delivers on it’s promises.
Keep your costs low or your business will not last very long. Don’t set a big budget for operations. Focus on practicality from the start. Only start thinking about the more glamorous stuff when you have generated enough revenue to feel comfortable about your financial position. The odds are that once you reach that stage, you would know that the glamorous stuff really doesn’t matter as much as you think it does.
8) Charge the market rate
You would be a fool to charge a premium price for your services when you have no track record to proof your worth. You would be an even bigger fool to charge below what everyone else is charging and eat into your own profits. Go with the market rate and compete by adding value to what you offer.
You might be tempted to cut prices to gain market share. But by doing so can lead to long term problems in customer expectations. So do yourself a favor and avoid selling yourself short or long.