As a business coach, I often have people come to me who are considering going into business. I’ll chat with them, do a business analysis and often play ‘Devil’s Advocate’ by asking many often challenging questions. I don’t want someone to go into business for the wrong reasons.
Here are some reasons to not go into business:
You’re over 50 and read you’re ’screwed’
I read an article this week and sadly someone proclaimed that basically life is over at 50. Their advice was to give up having a job, accept you’re redundant and go into business – specifically a multi-level marketing network. Life is not over at 50 and if you fear you’re redundant is your only motivation to go into a business, then that is not enough!
You can’t find a job, need job security or hate being told what to do
More poor reasons to go into business. If you think finding a job is hard, try finding clients and customers. Think having a business offers security? You need to learn resilience and tenacity. Whilst having a business means you are your own boss technically, the fact remains that you have hundreds or thousands of ‘bosses’. By this, I’m talking about clients and customers who can sometimes be demanding, unreasonable and challenging. Sure, the plus is that you can usually ‘sack’ a difficult client, but remember you then lose that income. Security only comes down the track once you are established and business savvy.
You haven’t done sufficient research
A business is hard work and a massive commitment; you need to be sure of all facets. There is a huge long list of things to look at when buying or starting a business and one of them is research. Look into competitors, opportunities, possible threats and weaknesses of both the business and yourself. This is just the tip of the research iceberg.
You don’t have a business mindset
Being a business owner is hard work. Certainly down the track you can aim at working a 30 hour week, finish at 4pm and have Fridays, evenings and weekends off. However, in the beginning you will need to put in the hard yards, work extra hours, miss out on social events, cut down (or cut out) TV and much more. If you’re afraid of hard work and lack discipline, then business is probably not your thing. So often people go into business to have time with their family and years down the track you ask them “so how’s that going?” and rarely they have both time and money. If ‘sleeping in’ is temping and you are easily distracted, then the ‘freedom’ a business offers might be a hazard.
You know nothing about how to run a business
I should add … and not prepared to learn. I see business owners who are great at what they do, for example accounting or car repairs or doctoring, but lack business expertise. Now, if you don’t have these skills are you prepared to learn, re-train and get professional assistance? I believe the 80/20 rule applies here and it’s more important to have a business skill – as you can always employ technicians, or outsource some aspects, but until you grow large enough, you need to be responsible for the overall running of your business.
Your proposed business is dying or saturated
If your research shows that your selected business is likely to not be around in 5 years, then don’t even consider it. Look at video stores. Between Foxtel, Netflix and all the other big boys vying for the consumers entertainment dollar, my personal opinion is that video stores are going to be obsolete pretty soon. This is just one example – there are quite a few industries which are changing. Other industries are absolutely saturated. Ideally find a niche which is unusual, unique and will be in demand in the future.
You don’t have any start-up capital and are hopeless at saving
For a start, every business start-up (or purchase) requires funds. If you buy a franchise or business, then you will clearly need more. Yes, you can borrow, but banks will need to see you have savings ability, plus much more. From their perspective a business is more risky, so it’s going to be harder to get funds from them. A good business owner will save and put money aside to cover taxes, BASes, staff super and a rainy day. In fact, it’s advised you should have at least 12 months’ capital for a new business and 3 months spare (rainy day money) for an ongoing business. If you are one of those people where money ‘burns a hole in your pocket’ then think twice about business as cash-flow can be akin droughts and floods.
You hate selling and are hopeless at it
If you own and run a business, you are a salesperson! Yep, you are now in sales! I cannot stress this enough. Simplified, every business sells a product or service and whilst your title might not be Salesman or Business Development Manager, in reality, this is exactly what you are. If you hate selling and are not prepared to shift that mindset, then please don’t go into business. If you are prepared to change, learn and grow, then this skill is very learnable.
If you know someone considering going into business, please pass this article onto them. I am happy to meet with prospective business owners for a 40 minute complimentary consultation and pre-business analysis to help learn if business is for you and you have a solid idea – and as importantly an entrepreneurial mindset and if not the skills, then certainly the desire to learn the skills. Simply contact me at email@example.com or ring 0411 622 666.