written by: Adrienne Diffin
There are many resources that are available to help you start your own small business. Those resources are there to support individuals who are already in the process of taking the leap. They may on occasion tell you the statistics of small business survival, but they are not there to convince you that starting your own business might be a bad idea. They are resources for support and encouragement.
Here are a few reasons you should not start your own small business (yet).
1. You do not have a solid business plan, set in place that is goal driven with milestones
2. You do not have enough $ to invest in yourself let alone others
3. You have not done research to determine your competitive market
4. You are unable to set aside time to pursue your dream now, while you currently have a JOB
5. You have not tested your success theory on a small-scale before diving in with both feet
6. You are not willing to re-invest in growing your small business
Don't be like me and start your small business by not having at least some of these things in place. Research, research, research, set your goals, and then use those resources to get the results you are looking for. (HINT) The
SBA and your local Chamber of Commerce is a good start.
Know the Difference and Pursue Accordingly
(consulting and company are different)
- Consulting (singular) built on the idea of making enough money to support you and your family
- Company (plural) is goal-driven to support others (not just you anymore)
To build a company you must grow your profit beyond what it costs to take care of company expenses, your own expenses, and have money to spare to pay someone else.
Growth can be one of the most challenging aspects of any small business. It is easy to confuse consultant and company, but they come with a very different set of challenges. It may be essential at first to start out as a consultant depending on the type of business you are creating; service or product-driven. However, you should have a business plan that captures growth initiatives to reach the next level. If you don't you will find yourself stuck.
Keep in mind some people don't want the burdens of a company and are fine with being a consultant, just be sure that if you are providing a service, that you are aware of the difference and that you maintain goals to help you at either level. If reaching the "company" level is your goal then be sure to include a well thought out plan for taking the right next steps to build past yourself.
(how do you know it's time to start a company)
For myself, I began as a consultant. I was a bit of a pro in the areas of marketing/ communications and wanted to make companies look their best. Then one day, as I was burning the midnight oil and stressing over juggling multiple client deadlines, I realized I wasn't a company because at the current pace I was going my "company" would never be bigger than myself. It would never leave a legacy behind. It would simply fizzle and die without me at the helm running things. Also, I realized that without a strategy to grow bigger than myself there would be no-one to pass the gauntlet to and that I didn't have an exit strategy. Therefore, I would most likely work until I died, die from the stress of all the work, or both.
(how not to grow a company)
So here was my biggest mistake. I barely had my consulting business off the ground, and then I invested in building a company before I was ready. I took all the profit and then some from my consulting business and invested it in an office, with employees, to create a new product/ service line. It seemed like a good idea at the time, but now I had essentially two businesses (less time, less money, no additional resources to support the consulting business, and too much overhead for the consulting business to support). I was spread thin both financially and with no time to spare day or night. The burn out was very real, and both businesses were just mediocre. No profit was being made, all the money was being poured into infrastructure for a product/ service- line that wasn't taking off.
(lessons-learned)
Here is what I learned. When I started my consulting business I had existing clients in place. I had money in the bank from savings to carry me through the first few months of personal expenses. I used my existing network and resources to help me find a recurring source of income that would sustain me so that I could have a chance at success.
When I started my "company-project" there was no "spare" money in savings to be used to help sustain it while it was still in the "new phase." There were no existing buyers in place. The current industry was not "accepting" of the company-project and did not show any support which in-turn hurt business. This should have been researched and tested prior to the dive-in.
(what's next)
So the "company-project" failed and my consulting business almost went bust with it, but I'm still here. I still have something to offer to the world. I am a visionary. I am an entrepreneur. So, what's next for me is to go back to the drawing board. Failure is an objective concept. As long as you continue to learn from it then it becomes just a notch in the belt of mistakes. I recently went to a family cook-out, and was asked are you sad your company-project failed. I answered that I'm not sad, because I know what not to do the next time. That's already one step closer to success than the individuals who are still at the gate.
(the path to success)
- Proper Planning and Use of Resources
- Good Money Management Skills and Financial Awareness (be present and understand your financial standing--Your Credit is Important)
- Solid Investments
- Gradual Growth with a Phased Approach
- A Bit of Luck
Not all of them are needed at once, but all of them are needed.
