Should you start a business?

Type “business plan” into your search engine and you’ll find thousands of templates. People write lots of business plans. It's something you have to do if you are going to start a business. But before you do all that, there is one key question you have to answer: should I actually do this?

At a rough guess, probably two out of every three people I know who have started a business wish they hadn’t. That’s not necessarily because the business failed. A lot do, but a lot don’t. And a lot make very little money.

Nor is it because they didn’t have a good idea, or lacked commitment or energy. It is more that it just didn’t turn out to be as wonderful as they thought it was going to be. It’s a little like having a best-ever holiday. If you go back to the same place two years later expecting the same, chances are you’ll be disappointed.

You might be passionate about your idea for a product or a service, but what you really have to be passionate about is running a business.

A rod for your back?

The hard slog of day-to-day operations and managing people can turn a good business idea into a burden.

Having a goal like “I don’t want to work for someone else” is not enough. You will still be working for lots of people, like customers, employees, suppliers, distributors, shareholders, or franchisors, not to mention banks and the government. You would be wrong to think you will be getting away from challenging workplace relationships.

It is also rare to have a seriously unique idea

A quick search of the web will usually find someone else who has tried something similar. You need to see whether it worked for them –  and if it did, whether it will work for you.

If you think you are on to something that will work, stress test the idea. Get scientific about how big the market actually is. Be realistic about what percentage of that market you can attract and why, whether it’s a simple web-based idea, a new retail shop in a suburban location or a major new product initiative in the national marketplace.

This is not meant to put you off

You just have to make a very sober evaluation of whether your project is a good idea for you.

Whether you like it or not, you will have administrative responsibilities. In an age of seemingly endless compliance requirements, you will have to manage many things that seem to have nothing to do with your vision.

You will also need people management skills and actually enjoy using them. And that’s before we have even talked about how much money you will need to get started and where you are going to get it.

Is it for you?

Try this exercise. Go to the Recharge Workshop and download “101 Questions Your Business Plan Should Answer.” Find some quiet time and sit down and think about the answer to each one. Put a mix of honesty and realism into your decision. If you are still inspired to go ahead, that’s great. Just go forth with no illusions.

Comments

[Susan Macleod]

I know what you mean. I thought running a franchise would sort out all the things I didn't know. In some ways it did, but after a year I was over it. Franchising is good for setting you up but it is hard to make any real money because you can't control many of the overheads apart from staff. Finding some at the right price, and then managing them was extremely challenging.