There are lots of good reasons to go into business for yourself. Maybe you've come up with an idea you're certain will be a success, or maybe your career has plateaued and you can't see any opportunity for advancement in your current job.
Whatever your reasons for starting your own business, being your own boss is very different from being an employee. Here are just a few of the things you'll need to consider if you want your business to be successful.
Ask yourself the tough questions
Starting a business is not something to take lightly. Before you take the plunge, ask yourself some serious questions:
- Am I starting a business just because I don't like my present job or my boss?
- How much do I know about the industry?
- Will I have enough cash flow to support my business in its early stages?
- Am I willing to work around the clock with maximum effort?
- Do I have the right personality to start a business or be my own boss?
- Am I open to different opinions?
- Do I plan for sole-ownership or to establish a partnership with friends or family?
Questions like these will help you understand how much you are willing to sacrifice to start your business. You also need to consider what sort of working visa you'll need if you're setting up shop abroad.
Do your market research
You may have a brilliant idea, but maybe others do too. That's why it's essential that you do your market research.
First, check if there are similar competitors already in the market. If there are, find out exactly what their businesses are and how they operate, and then figure out your advantages and disadvantages.
If there are no competitors, ask yourself why. Is it really because you are the first one to have this idea? Maybe it's a sign that there's no actual market for your idea, or that your target customer group not large enough. Is the expected net profit not enough to maintain operations?
Draw up a budget
Every bit counts for small businesses, so your expenditures need to be closely monitored. Budgeting starts with a calculation of your costs and required cash flow, including stock ordering and monthly operating expenses (inventory, rent, wages, overhead costs, etc.). Comparing the investment with the expected return, payback period, credit and liabilities, for example, will let you judge the viability of starting your business.
What's the perfect age for starting a business?
There's no absolute answer to this. Young people are enthusiastic and energetic, so many start-ups have young people as partners.
Meanwhile, veterans of the workplace are experienced, mature and prudent, so a lot of people do go into business for themselves around age 40. Others even wait until retirement to start their own businesses.
It takes a special combination of energy and experience, as well as capital and business contacts, to run a successful business, so the timing will be different for everyone.
If you think your business could benefit, it might be worth pursuing a post-graduate degree.
Will you need outside funds to jump start your business?
It can take a long time for profits to start rolling in. That's why lots of entrepreneurs start looking at venture loans when they want to launch a business. However, this type of loan usually involves complicated application procedures and longer approval times.
For many people, a personal loan can be a good option. You'll get a longer repayment period with an installment plan and approval times are often fast, especially if you're applying for a loan where you already bank. Depending on the loan, you might be able to re-borrow any money you've already paid back without the need to apply for a new loan.
If you're studying in another country and thinking of starting your own business there, you might want to check out which countries offer the best post-study work visas for graduates.