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Do You Have a Good Reason For Starting a New Business?
[NOTE: This post is part of a series on Entrepreneurship 101 to give a kick-start to those who are thinking about starting their own business. Our regular Job-Seeking and Career-Improvement programming will continue soon!]
There are a lot of reasons that folks will decide to start their own business. Unfortunately, most of the reasons are bad reasons.
By “bad reasons”, I don’t mean that they are dumb people, they can’t succeed, or they aren’t skilled. I just mean that it is unlikely that they’ll get a profitable business going that also achieves their original goals.
Let me give you some examples:
Starting a Business Because You’ve Just Been Laid Off? Usually. a bad reason. Unless you’ve got a good deal of spare money (experts usually say a year’s worth of basic living expenses) in your bank account, it is unlikely that you’ll be able to ramp up a business quickly enough to ensure that you eat regularly.
Starting a Business To be Rich? Bad short-term (3-5 year) reason. The average small business owner makes around $40,000.
You certainly can become rich running your own small business, but it won’t be for a number of years, no matter what the brochures say.
Starting a Business Because You’re Working Too Many Hours for Too Little Pay? Bad reason. You’re going to be working much longer hours than you ever did as an employee. And, at least initially, you’re going to get less pay as a result.
Starting a Business Because You Hate Your Boss? Bad reason. Your new boss (which will either be you or the free market) will be much harder on you. This is a good reason to get a new boss, not start your own business.
Starting a Business Because You Want Freedom? Could go either way. You do have the freedom to work or not work whenever you’d like. However, it becomes clear pretty quickly that not working = not eating.
As your business becomes more established, you can gain more freedom. Or lose any you have entirely. I’d give you a quote from a friend of mine who has a successful technology-related business, but he’s too busy to give one.
Starting a Business To Invest In Yourself Instead of Someone Else’s Company? A good reason - as long as you realize how large the investment in time and money will be. Building something that you could pass down to your kids (or, at very least, be sold with the proceeds benefitting them) is a great thing that only business owners can do.
Starting a Business to Bring Something the Market Can’t Get Elsewhere? GREAT reason! If you’re going to open a dry cleaners, I’d tell you odds are you should pass.
If, on the other hand, you’re going to open a dry cleaners in an area that doesn’t have another for 20 miles, has a drive-through window, sells good quality clothes and accessories, and takes digital pictures of your outfits with their accessories to show you how perfect the go together - THEN I’d tell you to go for it!
So, given all of that, do you have a good reason to start a business? I hope so. (If you don’t know, ask. I’ll at least let you know what I think!)
Next In The Entrepreneurship 101 Series: What Is The Right Business For You?
Enjoy the Search!
-Dan
Photo by: agroni
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