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What You Need To Know Before You Go (Out On Your Own)!

October 3, 2013

Have you ever considered starting your own business? It seems to be the dream for many people. To own something that belongs to you. To be the boss. To have more freedom. And hopefully, the chance to strike success in a bit way and make a tonne of money doing what you love.

As a corporate executive turned entrepreneur myself, I must say that there is definitely something rewarding about owning a business. But, once you make that decision there are some things I want to share with you beforehand to help make your transition as successful as possible.

Top Tips Around Starting A Successful Business:

1. Get a line of credit now! Before you resign from your current role, apply for a line of credit. You will qualify for a lot more money while you hold down a steady job versus as a new entrepreneur. These funds will come in handy when you start your new business. Also, this money will provide you with some extra security in case you don’t make any profit in your first few months (yes, that often happens for new business owners!)

2. Three is the magic number. The majority of people who start businesses will tell you that the first three years of business was the most challenging and frustrating. You will likely make the least amount of money in this time too. I tell clients to consider the first three years a time to play and experiment. Know that when you make it past the first three years, chances are your business will succeed the long haul and generate more income.

3. Set away a nest egg before you jump ship from your current role. For me, I found saving $50,000 was what I needed to do. This provided a safety net for a few months (always your first go-to place before the backup line of credit) and then I also needed money to start my business (i.e. web site, marketing materials, training courses, office, etc.). Determine your own risk tolerance here and how much money you will need to start your business. I know people who have started successful businesses with no nest egg and others have hundreds of thousands. For me, I have a husband who has a ‘steady’ job, but we have two small children and it was important to me that we had some money to fall back on.

4. Prepare to work hard. Despite the freedom I have available to me as a business owner, I work harder in this job than I have in any role in my entire life. The decision to work hard is of my choosing and I actually enjoy almost every minute of it. But it takes hard work to be a success. I don’t know any successful entrepreneurs who can ‘luck’ their way into making millions.

5. Get a Coach. When you start out on your own, this will be the time in your life when you may feel you have the least amount of money. You need to be extremely smart with what you spend your money on, but know this is the not the time to cut back on expenditures like coaching. Hiring a coach is a must-have for any business owner. First of all, it can be an isolating change starting your own business. In the corporate world, we have teams and lots of people to bounce ideas around with. When you start your own business, it can be lonely. But a coach is a trained professional who can help you get your business off the ground running successful in a lot less time. A small payout for a coach equals greater dollars in the long run. Focus on smart investments. My recommendation is to pick a coach who has a successful business themselves. This way, she/he can mentor you as well as coach you. You can get two professionals for the price of one!

6. Be prepared for the tough days. You will receive rejections. You will have customers that you thought were a fore sure thing, fall through. That is the reality of business. Don’t take rejections personally in business. Everyone needs to do what is best for them. And often when one door closes another one (perhaps you didn’t even see this door before!) will open. It is really part of the fun of business.

7. Consider investors. Depending on the type of business you want to invest in, it may require extra capital. Research potential investors thoroughly and talk to other people/companies they have invested in to learn if they are a hands off or hands on investor. Think about what kind of investor you want. Also, consider how much equity in your company are you willing to give up. If you give up more than 50 per cent to an outside investor, you own the minority share and you will lose some control over your company. Perhaps in this case, you may want a few investors so they can each take a smaller piece of the pie and leave you with the majority control. If your venture requires a large amount of money and you have to deal with majority investors, hire a good lawyer and negotiate a buy-back clause in your contract. This will give you the option to buy back majority equity in a certain number of years for a set price.

8. Create a business plan and marketing plan. I am always surprised when the clients I work with in my Career Coaching or Mentoring program decide to start a business, but don’t have a plan. Many don’t know how to create a good plan. And if you don’t have a solid plan, you don’t have a solid foundation to start your business. I work with these people on how to create winning plans. And don’t forget the marketing plan. It is just as important as the business plan. Marketing reports outline your strategies and tactics around creating awareness for your product or service. Every business needs a plan!

Find out more about Potential Unlimited’s Career Coaching or Mentoring services.

2 Comments leave one →
  1. October 8, 2013 10:19 am

    Great article, and very timely for me! Thanks.

    • October 8, 2013 11:30 am

      Glad the article was helpful for you. I seems to be the season for people to be starting their own businesses. A lot of clients and people I know are preparing to take the big leap!! Congrats to you on being bold and taking a risk to make your dreams come true.

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