Should I Start a Business? 12 Questions You Need to Ask Yourself Before You Begin
If you have been pondering the possibility of taking a shot at becoming one of the country’s many successful entrepreneurs, you aren’t alone. Every day millions of Americans launch or plan to launch countless successful businesses. Becoming your own boss is one aspect of the very core of the American dream.
But running your own business after growing that business from the ground up can be incredibly difficult, and many people go into it without considering many essential elements. That’s why this list of a dozen questions to ask yourself before trying to start a business can be essential to potential or prospective small business owners.
12 Questions You Need to Ask Yourself Before Starting Any Business
How much cash is at stake, and can I afford to lose that amount?
How much of my time will it consume regularly?
How much physical, mental, and emotional energy will it take?
Am I currently committed to any other projects that will prevent me from giving this business my all?
Is now the ideal time to start this project, or would another time be more advantageous?
If I choose not to start the business now, do I have a backup plan, and what is it?
Is this project likely to succeed to the point of profitability?
Am I starting this business because I’m in a good place and ready to start this business, or am I starting it as a problem-solving measure for a situation that isn’t optimal?
Can the business be test-run, or run at limited capacity for a trial period, to help you determine if it will be sufficient to quit other commitments?
What is my personal risk tolerance, or, am I a better fit for low-risk or high-risk business opportunities?
How long am I giving this business to become profitable for me, or what is my ideal time frame for success?
If the business fails, do I have an exit plan that will keep me safe while I get back on my feet?
Weigh The Potential Reward Against the Overall Risk
There is significant risk involved with starting a business, which is coupled with a potential for a reward that often far outstrips any initial investment. However, there is still risk involved, not only with your capital but with your time and energy. There may also be risks to your current standard of living.
If you find yourself in a position where you have a comfortable corporate job where you are well paid and have unbeatable benefits, you might not be asking “should I start a business?” exactly, but you might ask yourself if you’re willing to leave your current position on something that isn’t yet materialized.
On the other end of the spectrum, if you’ve enjoyed employment for many years and are now retired or approaching retirement, you probably have plenty of money saved and an excess of free time. You may be asking a more pointed question such as “how much am I willing to risk on a business venture?”
Set Hard Limits to Protect Yourself And Your Investments
Risk makes many people nervous, and it should as there is the potential to lose. You can reduce risk, however, by setting hard limits for yourself and/or your potential new business. These are firm limits you put in your business plan, and perhaps even have a Maryland start-up attorney include them in the official documentation.
For instance, if your risk tolerance is low, you may decide that committing any money or time will put your day job in jeopardy, which you will not do. On the other hand, you may decide that your investment cap is $250,000 all-in for any potential business venture you start.
In other cases, perhaps you will give the venture one year, or two, to become profitable enough to become your primary job. Alternatively, you may set aside money to keep the business running for 5 years or more regardless of your employment situation. It will depend highly on the individual.
Plan Ahead
It is critical to have a solid plan before setting out on any business venture, whether going at it solo or with one or more partners. Not only should you have a robust business plan, but working with an experienced Maryland business attorney can ensure you have everything you need to begin a successful business.