How to know when to start your own business.
As businesses and the wider community embrace the uncertainty that is inherent with living with COVID 19, you may begin to wonder whether now is the right time to start a business.
If you were to ask around you would certainly experience a group of naysayers telling you to play it safe until the climate is more stable. No doubt you will then get a list of all the reasons why it is not the right time, not the right time for you, or why your business won't prosper at the moment.
Equally, you may speak with people who might encourage you and say if not now – when?
We've put together a series of questions to help you determine whether you should start a business and whether now is the right time.
Why do I want to start a business?
This is the most important question.
This might be financially driven. For example, for those whose role has been affected this year, working for yourself can seem more secure than putting your future in someone else’s hands. You may also have some redundancy money or other savings to invest in a venture.
Alternatively, others will be driven by a sense of purpose. They may see a need in the market that is not being met or have a deep yearning to serve a particular group of the community.
Take the time to explore your why; it must resonate and have meaning for you!
How much do I want to earn?
Be clear on whether you want this business to be a hobby or something that will pay your mortgage. What savings or other investments can you rely on if the business grows more slowly than you hope? Set out a back of the envelope plan for the next 3-5 years on what you want to earn. There’s no right or wrong answer here, the question will encourage you to be honest about what you want and need.
What do I want my lifestyle to look like?
As you are estimating how much you want to earn, a realistic appraisal of your current and desired lifestyle can be a powerful motivator and encourage you to examine your non-negotiables. If the reality is that the breakeven point of your business will require you to work 24/7 with little flexibility when what you truly want is the freedom to take holidays or if you need to look after children or parents, then you will need to be honest with yourself and set some clear priorities.
With this framework in mind you can then re-assess your earnings expectations or your lifestyle plan.
What support will I need?
Aside from professional advisers you may seek out, will you need any additional support in your day to day? Do you have a business buddy you can talk to, as a sounding board or to vent to along the way? Are you part of a network where you could reach out and ask some questions to get clarity on something that might be niggling you about your business idea now? It is useful to consider your support network currently looks like and what else you might need if you started a business to see which areas you need to focus on developing.
Once you are clear on your why and what you want from your business – you will then be able to confidently determine whether now is the right time to start your business. If you decide to take the next step, you will also be in a confident position to ask for advice because you know what your endgame looks like.
Having also considered the broader perspective of earnings and lifestyle, you can also consider whether now is the time to break into a new business or keep it as a side hustle and look for other sources of income until the business can fully support you.
You can also join a community of like-minded people that will help you reflect and answer some of your questions. Have you checked out our Facebook Group?
Where next?
If you have decided that the time is right, look out for all the free resources available to provide you with a structured approach to your business structure, your market, and your products and services (eg. www.business.gov.au).
If you need further support, get in touch with Solutions2You and we will be more than happy to accompany you every step of the way.