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Want to start your own business?

Here are 5 questions to ask yourself before you do…

Image Credit: geralt via Pixabay
Image Credit: geralt via Pixabay

Did you know that 96% of private sector businesses in the UK have less than 10 employees*?

These are the UK’s micro businesses, 5.4million enterprises that account for more than £800 billion in turnover and employ 8.8million people, or one third of the UK workforce. In 2018, 382,000 (13%) of these were start-ups. But in the same year 12.5% of these micro businesses also stopped trading. That’s a ratio of almost one-in one-out and for anyone peering over the fence from the relative security of corporate life, those kinds of odds just don’t stack up.

But as many of us are driven (or pushed) from traditional careers and jobs, it has become increasingly clear that:

  • job security really is a thing of the past;
  • for most of us our pensions/savings/investments are unlikely to sustain us for the duration of our post-work life; and
  • in such uncertain times, the gig economy is providing more palatable solutions for organisations.

It seems a natural shift to think about contracting, consulting or even starting something ‘on the side’ to shore up our future. But how do you avoid being a one-in one-out?

Here are 5 key questions to ask yourself before you start writing that business plan.

1. Where am I going?

Do we really want to take the leap from corporate life just to create another ‘job’ for ourselves, one that limits the scope and scale of our income by continuing to trade time for money?

I speak with many entrepreneurs who start their ventures without really considering where they want to end up. Taking time to consider your exit strategy is fundamental to the type of business you build, the time it will take and the potential income you’ll generate.

When I took the leap from corporate high-flyer to entrepreneur, this was what I wanted to have in my future.

The time and money to visit my family & closest friends – who just happen to be scattered all over the world.

A mix of income streams that will support a particular quality of life over the next 30+ years – full disclosure, I am 50 and planning to be around for quite some time yet.

Ongoing opportunities to create new ideas and to develop and grow both my business and charitable interests – to satisfy my ‘shiny penny’ creator brain.

Simon Sinek would refer to these as my reasons why. Stephen Covey would call this beginning with the end in mind. Needless to say I am not looking to stop working any time soon. But these ambitions have given a particular shape to my endeavours, leading me to develop not only my business portfolio but also the plan for exit-ing any day-to-day operations in the medium term.

Ask yourself: What do I want to be doing in 5, 10, 20 years’ time? Think about ALL of life: Do you want be volunteering in your community, running a business, playing golf, spending time with children/grandchildren, travelling, saving the environment, fulfilling a life-long (maybe secret!) passion.

2. What do I need?

Have you ever sat down and worked out what you could truly live on?

Stripping back all of the ‘little extras’ is a powerful way to assess your essential costs of living. This is your Financial Freedom Number. It’s that first income hurdle that opens up some choices for you. Choices like do I leave my job or work part-time to focus more on the business? Does my partner stop working? Or do I keep doing what I am doing and enjoy some of the niceties?

And this is where your Lifestyle Number comes in. Adding this second layer forces us to prioritise which niceties are ‘nicer’ than others. Do I spend £3 on that latte every day or do I spend £60 this month on a great dinner out? Do I take that Uber or do I walk/take the bus for a fraction of the price and put the money towards that fantastic piece of gaming kit I’ve had my eye on?

Now work out what these two numbers might be for the life you envisaged for yourself in Question 1. when we asked where are you going?

Ask yourself: What income do I need to generate to support my future? What is my Financial Freedom Number and my Lifestyle Number? When would I aim to reach these and what choices will be available to me when I do?

3. What do I have?

As the numbers indicate, micro-businesses are in abundance and over 380,000 entrepreneurial ventures are launched into the UK marketplace each year. There are those who turn their backs on what they’ve done before and start again: learning new skills, new industries, new markets and completely new ways of operating. But to my mind, taking the leap into the start-up sphere doesn’t necessarily need to start from nothing.

Each of us have spent a lifetime acquiring skills and qualities and strengths that we can leverage. These are things we are known for, things that we do without thinking which others struggle to make happen. And this is our leverage – our sweet spot. People talk about my ability to break complex ideas into simple language, to get to the point, to make things happen. It’s a skill I bring to both my coaching with clients and my strategy building with business partners.

Ask yourself: What do I have? What can I leverage? When am I great when others are merely good?

4. What problem do I solve?

It’s easy to get swept up in the zeal and passion of your ‘truly unique idea’ that will solve problem X or provide opportunity Y for customers. But how do we know that the problem/opportunity actually exists and if it does, that enough people will pay for it?

Yes, that’s right. You need enough people who will pay for it.

It’s time to shift your perspective because now it’s not about you at all. I know you know this…but do you really know who your customer is? What ‘job’ do they need doing? What they will pay? Speak to them, check out potential competitors, hang out where your customers are and see what they like, buy, advocate, complain about, leave in the basket.

Ask yourself: Are there enough people who will pay enough money for my product or service to build a revenue stream that will support my needs (Question 2) and where I’m going (Question 1)?

5. What makes my offer irresistible?

Passion is fundamental in the game of entrepreneurship but as we’ve seen, it’s only one ingredient and will not be enough to build a sustained and future-fit business. It’s time to dig deeper and ask yourself a critical question: what do I have that means I can get this ‘job-to-be-done’ done for my customer better than anyone else? Am I willing to stand for my solution or opportunity, be the brand, spokesperson and number 1 fan?

Because that’s what you need to be.

People buy from people, and we buy from people we know, like and trust. As an entrepreneur that’s you. Can you articulate the problem that you solve? Are you willing to hear all of the no’s and the reasons it won’t work and use these to keeping honing your pitch? Are you willing to build your profile and credibility, to become an authority, to stick your own head above the parapet?

Ask yourself: Am I committed to being a product of my product? Am I willing to learn from my customers? Am I ready to become my own raving fan?

How did you fare with these 5 questions? Have they unleashed your entrepreneurial spirit or are you still considering whether the whole start-up game is for you?

Remember this is about creating your vision, imagining a future that excites you and creating the right roadmap for you to get there.

An entrepreneurial mindset does not need to be limited to running your own business either. It comes from combining who you know, what you have and what you can create to get you where you want to go. It is not a neat and tidy process – it means learning how to thrive in discomfort and uncertainty. However, starting with these 5 questions will provide you with a more distinct vision of your future and one that you’ll be excited to step in to.

*Source: Department for Business Energy & Industrial Strategy Business Population Estimates 2018

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