After dreaming about winning the lottery the next most popular lifestyle dream is working for yourself. Just last week the Government minister, David Willets, suggested graduates should think about starting up their own business last week as an alternative to struggling in the current job market.
Often our work involves working for clients who started their own business or through circumstance have ended up working for themselves. We’ve also seen a few people/businesses struggle and fail. Below we’ve put together a list of some of the key criteria that seem to make the difference between being a wage slave and being in charge of your own density:
- Working for yourself doing the same job as you did as an employee is not the same thing. We see a lot of internal consultants and trainers who think they will just do the same role, but as a free-lancer. Not understanding EVERYTHING is different; the psychological contract, the success criteria, the value equation, the feedback mechanism, everything.
- Your idea has to be different enough in an overcrowded market. It’s no good having a quite good idea, or something like something else. Your idea has to be better. It has to have something that meets either an unmet need/want, or activates an unarticulated need/want in the mind of your prospective customers. Key possible variables to consider are; price, location, functionality, quality, practicality, brand, service, & novelty.
- A poor business idea won’t come good if you give it time. Indifferent offerings (think of your local high street) don’t improve when the market does; they just go bust at a slightly slower pace. Grants and subsidies are no substitute for a strong value proposition.
- It’s all about cash not profit. Free (unspoken for) cash is what drives successful businesses. That unencumbered cash can be turned into profit, dividends, reinvestment, acquisitions or lifestyle. NEVER borrow money (after the initial start up phase) to fund running expenses or your own wages. More businesses/people fail not because they are unprofitable but because they run out of cash.
- Technology can be your BIG idea or your downfall. Technology can deliver fantastic opportunities – Facebook, iphone, etc. Can you exploit these new technologies in some way? Equally, many business models are being threatened by the internet, make sure you test your (off-line) idea against an online alternative. Try to look at least 5 years out.
- You could be the problem. Some people can’t work for themselves; they haven’t the discipline, the work ethic, the resilience, the right approach to risk, or the personal support. Make sure you develop enough self-awareness to understand YOU, before making an expensive mistake.
- Pay attention to everything. Planning, attention to detail, checking and analysis should all be key activities in the pre and launch phases. If this isn’t your bag, find a partner or some hired resource you trust, who loves sweating the small stuff.
- Create a good business plan. One that covers all the bases; finance, sales, marketing, operations, people and compliance.
- Desire always beats ability. Nothing more to add here.
If you think you’ve got our checklist covered, go for it, you’ll have a great (and sometimes scary) time!