Setting up and running your own business can seem like an exciting challenge. You no longer have anyone to answer to, you are in control of your own destiny, you can work flexible hours and take a holiday whenever you want to (in theory). The are loads of benefits of being in the driving seat and working for yourself. So why is it that so many start-up businesses fail? According to market stats 20% fail in their first year, 33% cease trading within 3 years and after 6 years only 1 in 3 are still trading. So why is it?
I believe one of the key reasons is quite simple. Not everyone is cut out to run their own business. Having a great idea and business concept is one thing. Loads of brilliant ideas have failed. The concept is one thing, the person is another. Here are some key thinking points to help you decide whether you are actually cut out to run your own business.
1. Self-motivation – it may sound like an old cliche but you do need to be able to motivate yourself. When you are working for yourself there is no-one looking over you shoulder who you are answerable to. You are suddenly not accountable to anyone except yourself – and this is tough for some people. There are various ways you can overcome this such as business coaches, mentors, mastermind groups and other business networks.
2. Compartmentalisation – do you have an ability to compartmentalise your personal life from your business. It may sound a bit of a strange one but from experience I know that if you can stop any personal difficulties affecting your performance in your business then you have a much greater chance of success. After 18 months trading I had a tough 10 months when my dog died, my wife had an ectopic pregnancy and my mum died. Obviously this was a difficult period for me but somehow I did not let this affect me in my work. I don’t know how you know how good you are at compartmentalising your life until your need to – but it is good to be aware of it. You don’t want your business to suffer because of something outside of it.
3. What is the why? – by this I mean why are you setting up on your own in the first place. The reasons will vary greatly for different people . For some it will be money driven, others it will be about personal challenge, others seek flexibility and many it is because the business is based around their passion in life. Understand why you want to work for yourself and make sure it is a good enough reason – as when times get tough it is this “why” which will motivate you to get through it.
4. People skills – what are you like with other people? It may seem an odd question when you work for yourself but you are going to have to engage with others – whether this is selling to potential customers, dealing with suppliers, networking or taking on and managing staff. If your people skills are poor you are going to find it tough – as people tend to only do business with people they like.
5. Support network – what sort of support network do you have around you? Your businesses is not going to be an overnight success from day 1 and there is a good chance there will be some long days in the early months. Your finances will also be stretched further than you initially imagined so make sure that you and your other half are prepared for it. If you are on your own with little in the way of a support network you will find it tough. So if you haven’t got one – look at getting one in the form of some sort of business group.
6. Maintaining focus – people who start up on their own tend have an entrepreneurial streak in them – which also means that they get excited by the ideas and concepts. This is great, but it does also have a negative affect in that if it is too strong it can lead you to losing focus and start too many side-projects and get distracted from the core business. Do you have the mental resilience to ignore distractions?
7. Dealing with stress – not everything always goes to plan. It is a fact of life! If we accept that this is just the case then dealing with it becomes easier. The picture of the swan above is there because although it has a calm and serene appearance gliding across the water – underneath the surface it is furiously paddling its feet. That is what it feels like running your own business – so can you maintain your composure and continue to make good decisions when the pressure is on?
8. Positive Outlook – a positive outlook on life doesn’t mean that you are going to succeed – but it definitely helps. The “glass half empty brigade” will find it tougher and they tend to be the architects of their own downfall. A positive mental attitude helps with many of these points and keeps you heading in the right direction.
9. Can you be flexible? – do your personal circumstances allow you a degree of flexibility? Can you work late or the odd weekend if you need to? Can you make alternative childcare arrangements if you need to head out of town for a massive opportunity. This is not a deal breaker but if you do have the scope to be flexible you will be open to more opportunities and are likely to grow your business faster.
10. Can you switch off? It can be tempting in the early days to focus all of your energies on your business to get it established. However in reality the “downtime” is just as important. If you don’t regularly rest your body and mind away from work then you will simply burn out! It will take you a while to get the right balance but if you can switch off in the evening and weekends and enjoy other aspects of your life – it provides you will more focus and energy when you are at work.
It is unlikely that you will tick all of these boxes, but if you know whether the potential pitfalls and hurdles lie you can start to make plans on how you can overcome and navigate around these. So if you have read this and still think you are cut out for running your own business – I wish you the best of luck. It can be the most rewarding experience and I have never regretted it once.