My Take on Starting Your Own Business
Jun 30, 2020 by Roger Scherping
Many people consider starting their own business at some point in their careers. The uncertainty in today’s job market is causing many people who would never have considered going out on their own to give the idea serious consideration.
Famous TV Shark Mark Cuban recently told Inc. magazine said that this is the perfect time to start a business you love: “Five to 10 years from now, we'll look back and there will be 30 businesses that were created where we'll say, 'Damn, why didn't I think of that? It makes so much sense now."
Changing jobs – voluntarily or involuntarily – is the rule these days. Most executive level positions turn over roughly every 24 months. In a downturn like the one we are experiencing now, it feels as though no job is safe. Many people are saying that the only way to find security is in doing your own thing and being your own boss.
I’ve started two businesses, but I don’t consider myself any kind of a special entrepreneur. I made the decision to go out on my own after giving it careful consideration, and I’d like to share with you what I learned, the questions I asked myself, and why I decided to do it.
One advantage of having a regular job is knowing that your paycheck will arrive in your checking account like clockwork every two weeks. Are you willing to take on some financial risk? Can you live with that kind of uncertainty?
If so, are you capable of taking a financial risk, considering your family needs? Do you have savings you can fall back on? Do you have an affordable option for health insurance?
Are you disciplined enough to do the things that you need to do without anyone pushing you to get them done? Do you have the drive to persist when things inevitably get difficult? Are you willing to sacrifice free time to see your business succeed?
Do you have people to call upon when things get tough? Being on your own doesn’t mean being alone. Do you have a network of people you can call for help with issues or for emotional support when you need it?
These are all questions that I found myself working through. People usually identify me as disciplined and persistent. I have more free time with the kids out of the house, and my wife is the one with the steady job and dependable health insurance, so that allowed me to take the risk. Also, our kids are through college, so tuition is no longer a concern.
Here’s a big question to ask yourself: Are you OK with the idea that you might fail? Remember that 23% of new businesses fail in just their first year.* If the fact that your venture has failed is something that you psychologically just could not accept, then you should not take the plunge. I had to give this one some serious thought because I just don’t like to fail, but in the end I considered what I was doing a calculated risk.
PICK AN IDEA
To start a business, you need an idea. Your idea does NOT have to be a breakthrough idea that the world has never seen before. How many pizza places are within five miles of your house? How about auto repair shops? How many brands of soft drinks do you see in the grocery store? There is room in the market for more than one company or product to succeed.
Your idea DOES need to be something that:
- You are very good at
- You are passionate about and won’t tire of
- Allows you to differentiate yourself somehow
- Has strong potential.
I started ProjectionSmart because I was passionate about helping entrepreneurs and small business owners. It fits my background as a CPA and small business executive who has turned around several companies. I know how to differentiate our product in the market, and I see its potential very clearly.
Whatever idea you chose for your business, make sure it’s something you are ready to live and breathe and never get tired of because you won’t be able to just walk away from your business like you would from a job that you don’t like anymore.
If you’re going to do this, then do it right! You don’t want to be in the 50% of businesses that don’t make it past their third anniversary!
One of my favorite quotes about planning comes from General Dwight Eisenhower: “In preparing for battle, I have always found that plans are useless, but planning is indispensable.” The point is that the planning process will ensure that you’ve thought through everything and are prepared to pivot when everything changes on you, which it will.
At ProjectionSmart, we like to say do your Finances First, so you can use our Startup financial tool to help you understand if your business concept makes sense financially.
You’ll determine your product offering and then your prices and costs. You’ll project your monthly sales and expenses for the first two years. You’ll answer questions like, how much cash do I need to get started? When do I reach profitability? For how many months will I have a negative cash flow? Will my prices be adequate to generate a profit? Will the business be able to support me?
Once you’re sure your business concept makes financial sense, then you can write your Proof Plan. You’ll discuss the size of your potential market, your product offering, and your target market. You’ll figure out who is going to be on your team. The Proof Plan is the easiest way to write a business plan. We created Startup and the Proof Plan to help you plan your startup and help you succeed.
You’ve submitted your resignation to your boss, you’ve incorporated your new business, and you’ve got your office all set up. Congratulations. You’re an entrepreneur.
Once your business gets started, though, you may need to make changes to your product or service offering. You may need to choose a different target customer. You might have cash flow or employee problems. The entrepreneur’s job is to remain focused and adapt and change and do whatever it takes to succeed.
My point is that it is less about what you’re selling and more about YOU, your EFFORT, and your DRIVE. It doesn’t matter if you’re selling flowers, fixing cars, or walking dogs. All businesses are fundamentally the same (they create something of value and sell it at a profit), and all small business owners do the same basic things. They find a market, win customers, train employees, and manage cash.
If you have what it takes to be an entrepreneur, then find the right product or service for you, and commit yourself to doing whatever it takes to make your business succeed.
Here’s the good news: You don’t need to be some sort of superstar visionary entrepreneur like Steve Jobs or Mark Cuban to succeed. Lots of everyday people start and succeed as entrepreneurs. Did you know that in 2016, there were 25 million Americans who were starting or already running their own business, and 33% of them had only a high-school diploma? A total of 26% of them say that their biggest motivation for starting their own business was the idea of being their own boss.*
And here’s my favorite quote about success from basketball coach Rick Pitino. He says that your success is entirely up to you:
“What’s true on the basketball court is true in business and in life. You want to succeed? Okay, then succeed. Deserve it. How? Outwork everybody in sight. Sweat the small stuff. Seat the big stuff. Go the extra mile. But whatever it takes, put your heart and soul into everything you do. Leave it all out on the court.
But that won’t happen unless you choose to make it happen. Success is not a lucky break. It is not a divine right. It is not an accident of birth.
Success is a choice.”
If you’re considering going out on your own, take the leap and choose to succeed. Email me if I can answer any questions for you.
FYI – Did you know that the largest group of entrepreneurs today is the over-50 age group? Of the people who start businesses, 60% are between the ages of 40 and 60 because that age group has confidence in their expertise, doesn’t want to deal with age discrimination in hiring, and is more financially secure.*