Image courtesy of adamr / FreeDigitalPhotos.net
Have you had it with the daily grind? A New Year is the perfect time to start planning your new life as your own boss. But don’t start drafting your resignation letter just yet. Take some time to make sure that the entrepreneurial life style is for you before you cut your paycheck off. On average it takes 12-18 months for a small business to break even let alone replace your corporate salary, so the more you think through how you are going to run your new business, the more likely you are going to be successful. Start using your evenings and weekends to start planning to Become Your Own Boss.
January is a perfect time to start a small business. You need to honestly evaluate your skills, network, discipline, niche, optimism and ability to be coachable to determine whether you’re ready to start a new business. I highlight the Emerson Planning System in my book Become Your Own Boss in 12 Months to give you a roadmap for business success. Here’s a break down of my six-step system to make the transition from employee to entrepreneurship.
- Develop a Life Plan First: You must first figure out what you want out of life, and then build a business that supports your vision. Too many people start businesses that are not good for them or their families. Your life plan should outline your financial, personal, learning and retirement goals. For example, you need to know up front how much money you need to make in order to be happy. Your personal goals will play a role in just about every decision you make in your business. Decisions relating to how you structure your life and your business. Will you take on a partner? Will you try to pursue investors? Do you want to have one great store or a build a chain? All of these decisions must be measured against your big picture goals for your life.
- Get Your Money Together: The money to start your business will come from your personal savings. Your ability to save has everything to do with your ability to become your own boss. Before quitting your job, I suggest planning your exit for at least 12 months. You should try to save 20%-40% of every paycheck and start living on a budget. Try to raise your credit score to 750 or higher. Eliminate as much debt as possible. Starting a business while carrying a bunch of credit card debt will put a lot of pressure on you. Take care of your money so that you can go without a paycheck for a year or two, fund your first year of working capital and have an emergency account for your household.
- Examine Your Skills: Look at what skills you have and what skills you need to run your particular business. Be honest when making your list of skills. If you are not sure about them, ask three people close to you what they think are your best skills. You might be surprised by their responses. Update your computer skills while you are still working; particularly start working on your social media skills. You can always grab a copy of my ebook How to Become a Social Media Ninja to give you a head start. You might also want to learn accounting software or Adobe Photoshop to help with things you’ll need to manage in your business.
- Who’s Your Paying Customer? As you are making a go/no go decision about your new business idea, think about these two questions: Who are your customers, and why will they buy from you? You must identify a niche customer. As you are starting in business, you will have limited time and limited resources. I suggest you develop a marketing plan before the business plan to make sure there is a viable market for your product or service. If you can’t answer these questions, then you need to go back to the drawing board and come up with another business idea.
- Develop Your Business Plan: You must plan for success; it will not just happen to you. You need to write a business plan, so that you can think through how you are going to run your business. It is very helpful to think through what happens when a sale is made and how many sales you will generate each month to meet your revenue goals. Don’t be one of those business owners who spend more time working on their logo than on developing a business plan. Use business plan software such as www.enloop.com to get started. Then, enroll in a business plan course to finish it. Check out http://www.bplans.com for hundreds of sample business plans that you can review for free. Don’t forget to use your business plan to run your business; in fact, it should be updated every 2-3 months to make sure your business is on the right track.
- Launch Your Business While You Are Working: Ninety percent of all small businesses get business from referrals, which means the person in the cubicle next to you is likely your first customer or first referral source. Take the next twelve months to build and reconnect with your network, research your target customer, and make sure you define how you will be different in the marketplace.
Work out the kinks in your business model while you still have a paycheck, if you can. You’ll be glad that you took the time to plan before jumping out there full-time in business.
Are you thinking about starting in business in 2013? What are you struggling with in your planning?
Noted…and saved to Evernote
Sound advice. Don’t launch until you are ready or you have to. Take your time and get your profitable business model right first; very few people get it right the first time out.
Melinda Emerson is a genius, I have brought a lot of her materials, the life planning journal really put it into perspective for me on what it takes to start a business.
Great advice! Love your content!
http://ninegps.ning.com/profiles/blog/list
It’s January and I AM now my own boss – not with a lot of time to prepare, unfortunately, due to an unexpected corporate downsizing, but I’m up to the challenge and ready to be aggressive. I’ve got my “hire me” website up and running, I’m networking like crazy, and paying work is coming in steadily. Can’t wait to see what the rest of 2013 brings!
Would like to read your articles on serious business issues.