Going into business for oneself can be the most rewarding step you could ever take. However there are a few things I think you really should consider:
1. It’s going to take twice as long and cost twice as much
It’s a frequently used maxim but only because it’s true. It is easy to underestimate how much needs to be done before revenues come rolling in and one’s plans rarely allow for any contingency or indeed living oneself until the business kicks in.
2. Test your proposition first
If it’s a product you are going to sell have some advance orders, or test selling it at a car boot. If it’s a service, go be someone’s apprentice or stand in for a week or two first, and see if you are cut out for going it alone.
3. Strongly consider becoming a limited company
A limited company is a separate legal entity to you and so if things go wrong it can go bust without you having to. Also, with a limited company you can sell shares to others at different prices and quantities and so raise money whilst retaining 51%+.
4. It’s all about the team
If you are going to raise money from Venture Capitalists or Business Angels, they’ll want to see a team in place with all the key roles covered. Six rocket scientists might build a great rocket but will still need a sales person , someone in finance etc.
5. Be a little selfish or greedy
If this is your plan, or simply you seem to be doing most of the work, you don’t have to settle for equal participations all round. If the chances are you’re going to lead this, then take the biggest share – kindness at the beginning can cause problems later.
6. What’s your ‘Ronseal’ pitch?
Forget elevator pitches – life’s too short even for a quick explanation of what you will do. Ronseal ‘does what it says on the can’. Can you summarise your business proposition to anybody in a single sentence?
7. What need does your offering satisfy?
Very little in this world is completely new, so most times there is already a need. If there’s a need, does your proposition deal with it? If there’s no existing need, because it is as revolutionary as the Sony Walkman or Apple’s iPad, then you’re going to have to create the market too.
8. How will the competition react?
Be careful if a market opportunity appears to exist because of competitors’ inefficiencies. If by starting, you show them wanting, they’ll surely move to shut the door on you. And remember too, existing loyalties might make their customers slow to switch to you.
9. Don’t rely on professionals – do some yourself
Lawyers and Accountants etc make their money by charging for their time. Often at hourly rates you’d happily take as daily salary. So ensure you know what you are asking for in terms of outcomes and always ask for a quote first.
10. Look for a mentor
Starting up is full of tricky situations you might never have encountered but invariably someone else has. Consider approaching an ex-boss or industry legend to see if they might agree to help you in your early stages. Surprisingly such help is often willingly given for free.