You’ve got the best idea for a new business — really, it’s mind-blowing. Since you feel trapped in your current job, this new idea is a sign, right? It’s time to cut ties with the nine-to-five and launch your own company. Or is it? Take the quiz below to find out if you’re ready to become an entrepreneur.
1. How do you feel about the idea of a formal business plan?
a. It sounds like something that will tie you down. You’re more of a freethinker — you like to take each challenge as it comes.
b. It sounds like something entrepreneurs do, and you’d be happy to start one if you knew how.
c. You’ve already got the summary written, and you’re fleshing out sections on marketing, products and cash flow.
2. How are you going to fund the business?
a. The idea is really, really, really mind-blowing. This business is going to fund itself.
b. You have some open balances on your personal credit card, equity in your home, or a decent enough FICO score to get a business loan.
c. You have money saved, are researching the possibility of investors, and have checked out AmericanExpress.com to see about a business account to cover travel and supply costs while you wait on the first invoice payments.
3. Do you have a marketing plan?
a. You’ve told all your friends and family, who love the idea. You’ve also started a Facebook page, and have a couple of fans.
b. You have some ideas about using Facebook, a blog and Twitter for online marketing. You know you can order free or low-cost business cards, but you need some help with the rest.
c. You’ve registered a domain name with GoDaddy.com, have started hyping the business on Facebook and Pinterest, and you’ve got a meeting with a SCORE coach to talk about other advertising opportunities.
4. How much work do you think the business will take?
a. Hopefully, less than 40 hours a week. You really want to get away from that nine to five.
b. It will probably take a bit of overtime at first, but after a few months, you hope to spend 40 hours or less a week working.
c. You’re planning on 60 or more hours a week the first year. After that, you’ll do what it takes to be successful, but you’re planning to make time for yourself and your family, as well.
5. How are you with paperwork?
a. You’ll hire someone to do that for you.
b. You’re good with details, but not sure what paperwork to start with.
c. It’s not your favorite thing, but you understand starting your business will require work in some areas you don’t enjoy in order to do something you do enjoy.
6. What’s your timeline for launching the business?
a. You’re putting in a resignation tomorrow, and expect the first customer by the weekend.
b. You’d really like to get started this year, but you’re afraid to leave the safety net of a full-time job.
c. You’ve been working on the details for awhile now, and you’re ready to let the world know about the upcoming business. You’ve got a personal financial plan and savings that will allow you to quit your job within 12 months, and you’ve created a business plan to match that pace.
So, are you ready to start your own company?
If you answered mostly A, you probably don’t have the best grasp of what it means to own your own business. It’s not a way out of work — in fact, you’ll probably work harder for yourself than you’ve ever worked for another boss. To be successful long-term, you need to plan before you launch. Only about half of small businesses make it past five years, according to the U.S. Small Business Administration, and those failures can be related to pitfalls such as poor planning and lack of knowledge about financing, record-keeping and pricing.
If you answered mostly B, you have the right attitude, but you aren’t quite ready. According to the National Mentoring Partnership, the role of mentoring in academic, life and professional success has been shown in surveys and through anecdotal evidence. Individuals with mentors are more likely to achieve success, so contact a local chapter of SCORE.org or a local office of the Small Business Association to get information about starting a business. Or speak with a successful entrepreneur willing to provide free advice.
If you answered mostly C, you’re well on your way already. You have a good idea of what it takes to start a business, and you’re at least halfway into the planning phase. Don’t give up on your goal — 28 million other people are doing it, Business Insider reports, and so can you. Remember to reach out to organizations such as the Small Business Association and SCORE.org. Although 70 percent of small businesses are owned and operated by just one person, that doesn’t mean you have to face every challenge alone.