Even if you are on fire with a passion for starting a new business, there is one question you should not ignore:
“Am I truly ready to start a business?”
Knowing for sure is necessary. The reason is that even the most straightforward small business is a challenging enterprise to pull off successfully. The Bureau of Labor Statistics reports that 20% of all new businesses will fail within one year. After five years, 50% will be gone.
What are the signs that you are truly ready?
Let’s just first say that, without a driving passion for starting a business, you are highly unlikely to make a go of it. But many people believe this factor is overrated to an extent. That’s because passion is not a quality that is always sustained. No matter how much you love your business, expect periods when you find much of your daily duties to be a drag. You’ll find the passion for entrepreneurship is a cyclical phenomenon, kind of like the natural biorhythms of the human body.
- You Have a Well-Designed Plan
You are not ready to start unless you have a formal business plan – and that means in writing. If you don’t have a plan, you have a plan to fail. Don’t make the mistake of believing you can “wing this thing” or “fly by the seat of your pants.” Failure to plan is listed right near the top for business failure causes lack of capitalization and inability to organize and manage well.
- You Love People
All businesses, no matter what industry or sector, are the “people business.” If you’re not good with people, you’re working with a severe handicap. As the owner of your business, you need to inspire and gain the loyalty of employees. They will be critical to your success. If you and a one-person or one-woman operation, you still need to deal with clients and customers. Great people skills translate to success in business.
- You Can Handle Setbacks and Failure
The accurate marker of an excellent entrepreneur is an ability to cope with setbacks or outright failure. China’s Richard Liu, the founder of JD.Com, the “Chinese Amazon,” failed miserably at his first foray into business. He opened a restaurant in Beijing that went bankrupt in six months. It left him $200,000 in debt.
Liu got right back up, dusted himself off, and started a new business. That enterprise became JD.Com, valued at $84 billion today.