I remember when I was just like you. I had my so-called “dream job,” but as the years went on, and I got one obnoxious boss after the next, I became miserable. I was getting headaches on the way to work in the morning. I had thoughts of starting my own business way back in college, and I realized that the only way I was going to be happy was to finally pursue it. I used every spare moment to plan my new business.
That was nearly 17 years ago. Along the way I made many expensive mistakes, but I believe, I went through all of that to help you sidestep all the potential pitfalls starting a business. According to the Small Business Administration, seven out of 10 new businesses survive at least 2 years, half at least 5 years.
One of things you must do is create a plan for your new business. I’ve created a 12-month planning process to starting a successful business. To give yourself the best odds of making it in business try the Emerson Planning System which can be found in full details in my bestselling book Become Your Own Boss in 12 Months, 2nd Edition. Here’s a quick summary of my 6 step process.
Develop a Life Plan: Regardless of your business idea, you must first figure out what you want out of life. By developing a life plan, it will enable you to build a business that aligns with your life goals. Too many people start businesses that are not good for them and their families. Your life plan should outline your financial, personal, learning, and retirement goals. You need a life plan before you even write a business plan.
Develop a Financial Plan: Can you afford to become an entrepreneur? Can you go without a paycheck for a year or two? Your ability to save has everything to do with your ability to start a business. You’ll need to develop a financial plan first. Start by calculating your net worth. Develop a budget. Over the next 12 months, try saving 20%-40% of every paycheck. You should also have a 750 or higher credit score. You also need to save more money while also eliminating as much debt as possible.
Evaluate Your Business Concept: You should look at what skills you have and what skills you need to run your new business. Be honest when making your list of skills. If you are not sure about them, ask three people close you to what they think are your best skills. You may need to learn some skills, so we willing to work part-time for a business like the one you want to start.
Develop Your Marketing Plan: The most important questions about your business idea are: who’s buying and why will they buy from you? Business success these days is all about niche marketing. I suggest you develop a marketing plan before the business plan to make sure there is a viable market for your product or service. Just remember, if everyone can use your business no one will. Focus on a specific customer.
Your Business Plan: A well thought out business plan is your roadmap for success. You must plan for success; it will not just happen to you. Developing your business plan will help you think through how you are going to generate sales, your distribution channel and how many sales you will need generate each month, quarter and year to make money. Don’t be one of those business owners who spends more time working on your logo than you spend working on your business plan. I suggest starting out on bplans.com looking at some sample business plans, then use business plan software such as Enloop.com or liveplan.com Then, enroll in a business plan class at a SBDC Small Business Development Center or local community college to finish the business plan. Typically, you need to interact with a human so you can ask questions to finish your financials plan.
Launch While Working: It’s best to be a side hustler at first. It’s 12-18 months for the average small business to break even, so don’t believe you’ll be paying yourself much during that time. Use your evenings and weekends to launch your business. You can find more time in the day if you start working flex hours, stop watching TV, scale back on volunteer service, operate with less sleep. Here’s a blog series on The Do’s and Don’t of Side Hustling.
Okay, so not everyone has 12 months to plan a new business. I get it. Sometimes people are forced to start sooner by layoffs, buyouts or retirement packages. I only planned for six months with my first business, but the challenge with that approach is you learn plenty of lessons the hard way, and that can be expensive. 12 months might seems like a long time, but I’m here to tell you…. the longer you plan, the more research you’ll do, and the more money you save, and the more likely you are to succeed in business. Grab a copy of my book Become Your Own Boss in12 Months, 2nd Edition. It will give you a head start as you set out on this new journey called entrepreneurship.