No one knows the future so its tough to give a solid answer to this but what I can say is that starting any business at any time is a great idea if you do it the correct way.
If you read through this site you will find many articles on all facets of business creation but the main idea we want to drive home is that much of what you need to know about business can be found by looking in the mirror. You are your fist business.
People seem to think that starting and running a business is some sort of special action. Its not, at its core it is no different that much of what you already know. Now, there are a lot of facets to business and scaling an organization, hiring help, competing, and much more are all things you will hopefully deal with later but for now don’t make it out to be more than it is.
So Why Do So Many Small Businesses Fail?
In short, they are easy to start and hard to keep alive.
Many businesses are established on the wrong premise or without proper forethought. I have met many people that say they want to start a business, but I have met very few successful business owners who said that it was easy. Every business owner I know that has done well has an ethic of hard work, stubborn persistence, and a knack for the market space they are in. In other words, if you want to do well in business you will need to find the right market to get into, the right value to provide, and strong desire to work through the tough times ahead. If you enjoy what you do, who you do it for, and like a bit of a challenge you have the makings of a successful entrepreneur.
The Importance of Human Capital And Alignment
A fundamental truth is that successful companies focus on their core competencies and work to meet the need of many markets. They don’t go outside of what they are good at. They compete on very few things, but they are best at those very few things. If this is true for the business, its true for you and I.
What Are Your Core Competencies?
By this we are asking what are you good at? What are the things you excel in? How are you geared as a person? What do people ask you to help them with?
This may seem like a simple thing to answer but it is much more involved than you may realize. Even if you are good in some area we want to know if this area would be one in which you can compete in the free market.
I’ll give you an example. When I started college, I thought that when you graduated you got some sort of golden ticket that guaranteed you a job so I may as well choose something I enjoy. I chose music. Over the course of two classes I realized that the people sitting next to me were cut from a different cloth. I may have been a decent musician, but I was a far cry from my classmates. In other words, if I was to go head-to-head against these people in the free market, they would have stomped me. I had a skill, I had a desire, but I didn’t have great enough of either to compete.
I later found out that the primary career path for a degree in music is to be a music teacher. That was not something I cared to do.
How Will You Reach Your Target Market?
If you are able to find a competence, where will you take that competence to solve other people’s problems?
If you can’t answer this, I would suggest you have more planning to do. Its great to have an ability and desire for a business but if you don’t have access to a market, you won’t make it. In manufacturing for example someone can set up a machine shop but if they don’t have a market to serve, they will be hurting for customers. If on the other hand someone is the president of their local car club and active in classic car communities then they will only be a discussion away from their next project.
What Are The Financial Considerations Of A New Small Business?
Out of the gate you will want to earn a profit as quickly as possible. If you borrow a bunch of money and have interest payments each month it could make this difficult. We are a proponent of a lean service-based business so that the initial capital requirements are kept to a minimum. We want the success of the business to fund its growth. We don’t want to presuppose any income will exist until it does.
Service-based businesses will require very little overhead to start. You could get started as a virtual assistant with as little as a laptop and a few monthly subscriptions (internet/QuickBooks/etc.). Janitorial and window cleaning? A computer, a few subscriptions and a bucket of supplies. You see where I am going with this.
What If I Don’t Want to Be the Person to do the Work?
Um…I think you are reading the wrong blog.
Your first business may not be your forever business, but you will learn a lot by getting out there, dealing with people, and adding value others are willing to pay for.
Wherever you are on your income journey be sure to check out The Four Stages Of Wealth Creation; From Clueless To Capitalist. We put this together as a guide for those looking to grow their financial acumen and take their next step towards financial independence.