Hello there. You’re here to see if you’re ready to become an entrepreneur. You see other people doing it and having great success so you want to try it out too. Maybe you always wanted to work for yourself but didn’t have the chance until now. So are you ready for this new lifestyle? The following questions in my entrepreneurship readiness checklist will tell you if you are or aren’t. Let’s get started!
Entrepreneurship Readiness Checklist
Question 1: Why Do You Want To Work For Yourself?
The first question in the entrepreneurship readiness checklist is the most important. Before you get deep into building your business plan and finding staff, you need to ask yourself why do you want to work for yourself? Why do you want to create your own business?
Most people jump into self-employment because they are tired of working for someone else. Frankly, we’re all tired of working for someone else. Having to clock in and out and do tasks you may not want to do is a pain. However, there’s no perfect job, including creating your own business. So if you believe this feeling will go away once you become an entrepreneur then you’re not ready for self-employment.
Question 2: Are You Aware Of The Small Business Failure Rates?
The second question of the entrepreneurship readiness checklist is here to make you realize the harsh truth: Self-employment is difficult and many businesses fail. According to Investopedia:
Data from the BLS shows that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more. These statistics haven’t changed much over time, and have been fairly consistent since the 1990s.
Though the odds are better than the commonly held belief that more than half of all new businesses fail during the first year, the odds are against you.
I don’t mean to depress you with those stats, but it’s important to see how many businesses fail. Yes, some fail because of a bad plan or a poor product. Others fail because those companies run out of money. Once you know the stats and the reasons behind these failures you can prepare yourself and your business.
Question 3: Are You Willing To Work Hard And Long Hours?
With question 3 of the entrepreneurship readiness checklist I want to slow you down because I know you are eager to start. Yet, are you eager to work hard and long hours? If you’re not then self-employment isn’t for you.
You must realize that when you become your own boss everything is on you now. That includes interviewing and hiring staff, creating marketing plans, providing customer support, and so much more. On top of that, you must be willing to come in early and stay late.
Yes, many people go into self-employment to work less hours but you will find out most owners don’t. A Gallup survey shows 33% of small business owners work more than 60 hours a week! Of course you get to create your own schedule but that doesn’t mean you can knock off early just because. You will have customers to support and sales to make.
If this shocks you and you’re second-guessing becoming an entrepreneur that’s fine. This lifestyle may not be for you.
Question 4: Are You Willing To Live Lean?
The fourth question for the entrepreneurship readiness checklist is all about your personal finances. Self-employment requires not only as your time as an investment, but your money too. So are you willing to live as lean as you can to grow your business?
Many businesses do not make a profit within their first year. Freshbooks states it may take 2 to 3 years for a business to make a profit. Now, if you have a home-based business, you’re in a better position to make a profit due to the low startup costs. However, that doesn’t dramatically increase your odds.
What is living lean? This means following a strict budget. You will probably have to reduce going out to eat, or buying electronics or makeup. Because you will need that money to pay your personal expenses and maybe even the business expenses. In addition to those actions, you may have to make difficult decisions like selling your car or some other asset to invest that money into the business. Some people even move into a smaller house or rent out rooms.
Question 5: Can You Handle Multiple Tasks?
The final question of the entrepreneurship readiness checklist is to determine your skill-set. When you’re the boss of your own business you will have to work multiple jobs. Not only are you the owner, but you may be the accountant, tech support, sales, and even the janitor. Are you willing to work those tasks and more? Do you know how? If not, are you willing to learn or will you have to hire out? Outsourcing those duties means another expense. Could you afford that?