When lightning strikes and you come up with a surefire money-maker of an idea, it’s tempting to jump in immediately. After all, you’ve got that spark of passion, the energy to make your vision a reality and the drive to do it.
But if you’re currently spending 40-plus hours a week working at another job, you may be thinking of quitting so that you can devote all your energy to launching your dream company. Unfortunately, far too many people make this switch prematurely when their business just isn’t ready. It’s no wonder that at least 50 percent of new businesses fail within the first five years. These founders end up with their idea down the drain, depleted savings (and morale), and a lot of time, energy, and money lost.
On the flip side, startups that succeed tend to share characteristics like having founders that are driven by passion and a desire to make an impact and being ready to stay the course even when things get tough.
Before you decide to pursue your business full-time, you need to make sure you and your idea are ready. If you are intensely passionate about your idea, you’re only halfway there. Make sure these four things are true to up your odds of success.
1. Make sure other people want to buy what you’re selling.
I get it: You love your idea. You think your business is going to be the biggest thing to hit the market, the next [insert unicorn startup here]. But don’t jump ship to start your company if you haven’t told anyone about your idea. Better yet, don’t do it until you’ve actually tested your idea in the market to see if people will pay actual money for it. According to a study of startup post-mortems, the number one reason they tend to fail is lack of market need for what they’re offering, so this is definitely not something to gloss over.
I started making hint water in my kitchen when I wanted a healthy, sugar-free yet delicious drink. I couldn’t find anything like it in stores, so I made it myself. I was essentially boiling fruit peels in water. It wasn’t sophisticated or expensive, yet it allowed me to test a prototype of my product. I wanted to make sure it would actually taste good. (It did.) My subtly-flavored water even helped me kick my Diet Coke habit.
And while it seemed like my idea was solving a problem—a good first step for a potentially successful venture—I needed to know that others would like it, too. I wasn’t sure if this could be a sellable product until my friends were asking (no, begging) me to bottle some for them. I felt even more confident when I hauled 10 cases to my nearest Whole Foods and they sold out overnight.
There’s no need to hold your idea close to the chest. Be bold in talking to people about it, or even making a rough version of your vision for people to test. Tell friends about it, consult former colleagues or people in the industry you trust or take a version of your product to your nearest mom-and-pop shop and see what they think. It doesn’t have to cost a lot. There are many ways to validate a business idea without spending a fortune.
2. Have a healthy starter fund.
When you begin building your company full-time, there’s a good chance you won’t make money for a while. And even when you start to bring in some revenue, in those early days, most of it will be immediately reinvested in the company or dedicated to paying awesome talent to help you. Founders are often the last to make the big bucks.
Securing funding before you jump ship is one option, but it can be difficult to get your company to a point where you’re ready to raise (and are able to have investor meetings) while holding down a 9-to-5. Some founders have a spouse who’s able to support them, or rely on family money or a small angel round of people already close to them. Others choose to seriously cut back by moving in with their parents to save cash. Others still consult on the side or take a part-time job to keep the funds flowing, or go the Kickstarter route to raise money directly from potential customers. I was lucky to have a chunk of change saved up from my previous job to sustain me and my family.
Whatever avenue you choose, take a hard look at your finances before launching your business. There’s a reason the most common shared trait among entrepreneurs is access to financial capital; it’s not cheap to get a company off the ground and there’s a lot of financial risk involved. While I don’t think you have to be rich to start a company, you have to do your homework. Understand the costs in front of you—both for your company and for yourself—and have a plan for how you’ll cover them for at least the next year. You don’t want to be so stressed about paying the bills every month that you can’t actually focus on making your company a success.
3. Know you can handle rejection.
Entrepreneurship is a tough path. It’s riddled with risky steps, wrong turns, and plenty of naysayers. Before you put your whole self into it, you’ll not only want to make sure your idea can cut it—you want to make sure you can survive.
While it can be hard to fully know how you’ll handle building a company until you’re in it, a good way to pressure test is to have multiple people reject or dislike your idea and see how you handle it. While your concept can’t be totally failing (since you’ve seen evidence that people want to buy it), you’ll want to have heard pushback to help you be sure you’re ready for the onslaught of rejection that every entrepreneur faces—and to see where you can improve on your idea. If you’re going to lose your cool at the first investor who tells you “no,” starting a company right now probably isn’t the right move.
If you haven’t faced this kind of adversity yet, get exposure and try taking bigger risks. Ask the opinion of a higher-level investor. Recruit more people (not just friends and family) to test your product. Seek out an industry mogul for help. I didn’t realize I had the strength to run my company until I got the opportunity to meet with someone from Coke. Having no experience in the beverage industry, I wanted advice and was even toying with the idea of giving my idea to them and letting them run with it. But instead of being excited, he told me, “Sweetie, Americans like sweet.” Instead of feeling downtrodden by his remark, I felt more drive than ever. I realized I had found a pocket of the market that even major retailers were missing. And if I didn’t do this, nobody else will.
This isn’t to say you should ignore all naysayers. But if you’re going to make it in the entrepreneurship game, you’ll need to be able to take their remarks in stride, separate out anything constructive to help make your concept stronger, and feel even more motivated to succeed rather than ready to give up. Practicing reframing rejection and using it to make you stronger is a worthy exercise for anyone, but especially for prospective entrepreneurs.
4. Build a strong network of social support.
Starting a business is hard and it’s lonely. So if you’ve already got some smart people buying into your idea as investors, mentors, or potential employees, that’s great. But—perhaps more importantly—you need great people in your personal corner to help you whether the storms ahead. Studies show that one of the ways to build resilience is to have a strong support network, and, boy, are you going to need a lot of resilience to get this company where you want it to be.
Without my husband, my friends, and my four young kids, I never would have survived the last 15 years of building my tiny kitchen experiment into the number one independently owned non-alcoholic beverage company in the U.S. My husband let me bounce ideas off him endlessly in those early days, so much so that he ended up joining as my COO and has been a rock in building this company. My friends let me vent to them when I needed, and provided plenty of fun when I didn’t realize I needed to take a break. And, believe it or not, my kids didn’t detract from my work, but only made me a stronger leader and gave me the ultimate motivation to keep moving forward.
Don’t start a business without having some rock-solid relationships with people you can turn to at the end of long days for support. This doesn’t mean you have to be married to be an entrepreneur. It can be your closest friend, a mentor, or even your mom. Just make sure you’ve got some people you can count on.
If any of these things aren’t quite true, that doesn’t mean you should give up on your business entirely. Instead, keep hustling nights and weekends to check the rest of the boxes, getting you and your business to a place where you’re strong enough to set out on your own.