There is no time like the present. If you don’t start a small business now, you’ll never get around to it. It’s the perfect time to launch.
By JORI HAMILTON
Does any of that sound familiar? Are these the types of things running through your head all day long?
It’s easy to get excited about starting a small business, but you don’t want to get ahead of yourself. Doing so before you’re 100% prepared increases the likelihood of failure, and that’s something you want to avoid at all costs.
Every year, hundreds of thousands of small businesses launch. But unfortunately, a large number of these businesses fail within the first few years of opening their doors.
With that in mind, it’s easy to see why you should tread lightly while deciding what to do next.
So, Is Now the Time?
Before we go any further, remember this: only you can decide when it’s the right time to start a small business.
You can read as much as you want online. You can talk to as many mentors as you can find. You can watch others win big in your niche and enjoy the fruits of their labor.
However, when it comes down to it, you have to make the final decision on when to take the leap.
Here are some details that can help you decide if the time to start a business is now:
1. Your Personal Finances
Some people have a firm grasp of their personal finances and feel good about what the future will bring. Others are not nearly as stable, as they wonder if they’re on the right path to reaching their financial goals.
This comes into play when starting a business, as starting up will affect your personal finances in several ways such as:
— Balancing income between business expansion and personal expenses
— A lower salary up front, which can squeeze your budget
— Taking on debt that you may be personally liable for
Even though you have a higher ceiling over the long run, you aren’t likely to earn as much money in the meantime.
Also, take into consideration your credit score, as this comes into play when you’re seeking funding. For instance, if you have a high credit score, you’re more likely to secure a business loan with a competitive interest rate.
Starting a small business will affect your personal finances, so plan for this in advance.
2. The Financial Needs of the Business
It’s critical to have a clear understanding of the financial needs of starting a business. Without this, you could soon find yourself in over your head.
For example, if you require funding, there are several places you can turn:
— Bank loan
— A loan from friends and/or family
— Home equity loan
— Personal loan
— Angel investor
— Venture capital
— Credit cards
And that doesn’t even take into consideration the fact that you must know exactly how much money you require.
This is a good time to project the future costs of operating a small business. Maybe you need money to build out a storefront or office space. Or maybe you require additional funds to set up remote workers with everything they need.
The financial needs of your business can and probably will change in the future, but you should still prepare to the best of your ability.
3. Current Market Conditions
The current market conditions are more important today than ever before, as the COVID-19 pandemic has turned virtually every industry upside down.
For example, restaurants are struggling mightily in many parts of the country, as they’re not permitted to have indoor dining at full capacity (if at all).
So, if you have dreams of opening a local restaurant, you should strongly consider if now’s the time to do so.
Also, it’s important to answer specific questions about the industry you want to enter, such as:
— Who are your primary competitors? Who has the most market share?
— What is the average startup cost for a new business in the space?
— Is the industry growing, stagnant, or dying off?
There are times when market conditions simply aren’t right. If you have concerns about this, it’s best to reassess your timing.
4. Your Experience and Knowledge
The most successful small business owners are those with enough experience and knowledge to get their company off the ground, make informed decisions early on, and pivot as necessary.
If you’re concerned about your current level of experience and knowledge, take the time to enhance your knowledge base.
Take for example an entrepreneur who wants to launch an online clothing store. They may know the basics of getting started, but fail to understand things such as:
— The best e-commerce platform for their store
— How to process payments
— Technology to assist with customer service and employee management
— Where to source clothing
You don’t have to be the most experienced person in your space, but you should have some level of expertise and knowledge to rely on during the startup phase.
On the plus side, there’s an online course for almost anything, such as those offered through Udemy or edX.
5. Your Personal Life
There’s a big difference between operating a small business and working for someone else. When you’re the owner, you’re responsible for everything from the top down.
There’s nothing wrong with taking on this responsibility, but keep in mind that it could pull you away from your personal life, especially in the early days.
Here are some questions you should answer before launching your small business:
— What does your personal schedule entail right now?
— Do you have anyone at home who relies on you, such as a spouse and children?
— Do you have a spouse or someone else to help you raise your children?
— Are you willing to give up things in your personal life to get your business off the ground?
These are all legitimate questions that require a detailed answer. Starting a small business will change your personal life, so make sure you’re on board with making adjustments on the fly.
There’s no shortage of information to consider as you decide if now is the right time to start a small business.
While it may slow you down a bit, it’s always a good thing to dive into every last detail before taking such a big step in regards to your career, finances, and personal life
If you’re certain that now’s the time to start your small business, don’t hesitate. You’re closer than ever to realizing your dream.
- Jori Hamilton is an experienced writer residing in the Northwestern U.S. She covers a wide range of topics but takes a particular interest in covering topics related to business productivity, marketing strategies, and startup efficiency. To learn more about Jori, you can follow her on Twitter: @HamiltonJori