25 Jul 7 Questions to Ask Yourself Before You Become an Entrepreneur
Are you a $100K+ executive who is thinking about leaving Corporate America and starting your own coaching or service business?
Making the decision to venture out, take the risk and become an entrepreneur is hard, whether it’s because you can’t find a job in this tough economy or you’re simply tired of working for someone else. And, believe me I know.
In 1992, I decided to start my own business after being laid-off twice in the same year. Now, the idea was not completely new to me. My father, grandfathers, and many uncles on both sides of my family were bit with the “own-your-own-business bug.” Although, I knew exactly what I was getting into and even though I come from a long line of entrepreneurs, I still faced the same questions and fears that you’re facing right now.
Below, I show you how I made my decision to start my executive coaching business 17 years ago. And this process still works today as I ask my clients the same seven questions when they tell me that they want to transition from executive to entrepreneur.
The Top 7 Questions I Asked Myself Before Transitioning From $100k+ Executive to an Entrepreneur
Question #1: What is your motivation for becoming an entrepreneur?
Your motivation to become an entrepreneur must be strong enough to carry you through the ups and downs. Wanting to work part time while taking care of your children, trying to work as a 1099 until a better opportunity comes along, or having nothing better to do are poor motivators for starting your own business.
Question #2: What is your background and experience at work?
If your experience is in a back-office function or you’ve never had the experience of working directly with customers, you need to think about how you will acquire these skill sets. This does not mean that you need to master the art of cold-calling, but you must know how to close a deal.
Question #3: What strategies and tactics will you use to find leads?
More than anything, you need to hit the ground running. You need to find potential customers fast so that you can make deals happen. My advice is to delay building your marketing materials – including your website, brochures, and tools – until you know where and how to reach potential customers.
Question 4: How will you address the three big challenges of Money, Product and Pricing that every new business faces?
Under capitalization is the biggest reason company’s become bankrupt within the first year. You need to know how to finance your start-up. Personal cash reserves, credit and loans from family and friends are the most common methods.
Building a product or service includes the time and money needed to develop these materials and you need clarity about what your target market wants and needs. Take the time to learn through your network before you spend large amounts of money on prototypes that may not sell.
Pricing is the hardest challenge of all. My advice is to slightly under price your product and/or service to enter the market and as you prove your worth and brand, you can raise your prices over time.
Question #5: What course of action will you take to make your business successful?
This question goes to the heart of your commitment and what you are willing (and not willing) to do to make you a successful entrepreneur. Going into any new venture requires you to evaluate your discipline and diligence as it relates to your desired level of success.
Question #6: What are you going to do to market yourself?
Marketing yourself is all about the process of gathering strangers into your network and bringing them to a state of interest. This requires strategic planning that enables potential customers to engage in you, experience your value proposition and build trust before turning them into a potential sale. Building a website or a social networking site is not enough.
Question #7: How long will you stay involved in your business before you receive a consistent revenue stream?
Given that most businesses take nine months to a year to build a healthy and consistent revenue stream, you must look at your finances and determine what you will do in the meantime. Key questions include: How will you supplement your income requirements? What can you do to drastically cut your break-even point? How will you make up the difference?
There is also a personal side to building a business. You must transition from an accidental entrepreneur to taking your business seriously in order to be successful. And your family must be willing to give you the time and the resources to get your business off the ground.
Becoming an entrepreneur is one of the most satisfying, challenging, exciting endeavors any executive can do. If you want to take charge of your career, build something that gives you long-term control and provider yourself with the ultimate in freedom and flexibility, then making the transition from $100K+ executive to entrepreneur is well worth the effort.