What’s the best part of being a small business owner?
The autonomy. You are your own boss, you make the rules, and you control your own destiny.
What’s the worst part of being a small business owner?
The autonomy. You are your own boss, you make the rules, and you control your own destiny.
How could the best part of being an entrepreneur also be the worst?
It depends on which day you ask me the question.
On most days, and when things are going well, there’s nothing more liberating then managing your own time, playing by your own set of rules, and having control of the outcome.
On the other days, when things aren’t going so well, and it feels like you’ve just been knocked out by a Muhammad Ali punch—your star employee just quit, or your best client gave you notice that they’re going elsewhere—being the boss isn’t nearly as rewarding.
Either way, the idea of being an entrepreneur seems quite glamorous from the outside, but that quickly changes once you’re on the inside and you’ve found yourself at the other end of many sleepless nights.
I wouldn’t trade being an entrepreneur for any other job. It’s the only thing I’ve ever known, but it ain’t easy.
So how do you know if you’re cut out to be a successful entrepreneur?
You test the waters.
You test the waters BEFORE you quit your day job—not after.
Don’t Quit Your Day Job to Start Your New Small Business, Yet.
If you currently have a job and have been thinking about jumping into the world of entrepreneurship or wanting to start a home-based business, then there are some things you can do, while you have your job, to determine whether your new pet rock business idea will be a success.
Once you’re sure that:
– your new business idea has an excellent chance of success
– you have the chops to be an entrepreneur
– you have enough cash flow to survive the invariable startup dry spell
only then should you go ahead.
Until then, don’t quit your day job.
So how can you determine that your new business idea will work?
Things you can do while you’re still working to test your new business idea.
Marketing Testing
Yes, I know that you’re sure that once you launch your new pet rock business, there will be a two-hour-long line at your door of people waiting to place an order.
Fact is, you probably aren’t the best judge of whether your new business idea will be a success.
Fact is, your friends definitely won’t be the best judge of whether your new business idea will be a success. Chances are they won’t be honest with you, and even then, they might not be your target market.
So before you dump your grandmother’s inheritance on your new business idea, put a few dollars aside and set up a “test dummy” business website. You can do this after hours and on weekends.
- Register a URL for your new business (this won’t be the URL you launch with, it’s just a test).
- Launch some social media pages: Instagram, Facebook, YouTube. Let people know that you’re going to be launching your new business, and ask for feedback.
- Get a logo and website designed for your new business. Again, you don’t need to spend a fortune on this exercise; you can get a logo and website package designed for under $100 at Fiverr.com. I know, because I’ve done this myself. And although the logo and website weren’t fantastic, they did serve the intended purpose.
- Design some landing pages for your new product.
- Do some basic Facebook and Google advertising. Set aside a few dollars, and run some basic Facebook ads. Direct the ads to your landing pages (see step 4 above), and watch what people click. You can even sign up for a free 30-day trial of website heat mapping software, like CrazyEgg. CrazyEgg will allow you to see what people click, do some A/B testing, and monitor buying behavior.
If you’re thinking, “Jeff, the above sounds like a lot of work,” then you’re right. It’s even more work to start a business and realize after you’ve quit your job and spent your inheritance on the business that your idea stinks. So figure out your new business’s viability before you quit your job not after.
Pivot As Required
How did the above testing go?
Did you get any feedback? If not, then continue with your testing until you are satisfied that your idea has potential… or not.
If you did get some feedback, and you still feel that your idea has potential, then what changes is the market asking you to make to your product (or idea)?
Make those changes, and continue testing.
Do you still want to go ahead?
Write Your Business Plan
Having a plan isn’t about predicting the future, but rather it’s about having the discipline to think through all the necessary steps required between your first day in business and your next few years.
I know you have a great idea, but will people buy what you’re selling?
Let me ask another way.
How do you know people will buy what you’re selling?
And how many pet rocks do you need to sell to break even?
Preparing a business plan isn’t just about producing a document that you’ll need to give to a lender. It’s about thinking through your idea and setting goals.
Your business plan should, at a minimum, consist of the following elements:
* executive summary
* business description
* market research
* description of services or products
* management structure
* marketing and sales strategy
* financials
You might think you have a great idea, but putting it in writing will force you to think through all of the above.
Quit Your Day Job
Hold on. Don’t quit just yet.
By this point, you should have some assurance that your idea has potential, but before you quit, I want you to do the following:
Take your current revenue forecast, and divide the numbers by two. There’s a good chance your sales won’t ramp as quickly as expected. How long will it take before you run out of cash? If less than eight months, then keep saving. Don’t quit your job, yet.
Take your proposed marketing budget. Double it. Marketing is way harder then you expect and will cost you more than you anticipate.
Do you still want to go ahead?
Before you quit your job, start doing some of the early stage marketing and business prep while you’re still working. Remember, once you quit your job, the clock starts ticking, so if you can get a lot of the admin work done in advance, then you’ve bought yourself extra time.
Good luck!
Before you go, I wrote an article titled: The 5 Steps You Need to Take to Get Your Startup From Paper to Launch and Then to Infinity and Beyond. One of the things I write about in the article is that you need to prepare a business plan, and I go into much greater detail in the article. Check it out.
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Want to know more about me and read some of the other interesting small business growth, profit and wealth stories I’ve written.
Here’s one of the first articles I wrote: My Journey Post Business Sale as I Sail Into a New Harbour.
Are you a younger entrepreneur? Here’s another interesting article I wrote:
My Response to an 18-Year-Old Who Wants to Become a Millionaire by the Time He’s 30.
