By Rieva Lesonsky
If you’re thinking of starting a business, the idea probably scares you at least a little bit. You wouldn’t be human if you didn’t feel a bit nervous at the idea of starting a business and making such a big change in your life. But what if you don’t feel scared at all? Great news, right?
Not necessarily. Sometimes, the lack of fear is a warning sign. If you’re completely fearless about starting a business, maybe it’s because you’re the kind of person who jumps out of airplanes for fun. Or maybe it’s because you’re clueless and haven’t done the market research needed or thought your idea through. How do you know the difference?
Are you fearless about starting a business even though….
- Your spouse or significant other has lots of concerns about the business?
- Your market research isn’t showing a big demand for your product or service?
- Your market research shows there’s absolutely no competition in the marketplace for your idea?
- You face significant obstacles to starting and profiting from your idea?
A big part of starting a business intelligently is assessing your risks and planning for how you’ll handle them. Here are some steps you should be taking before you start your business:
- Do market research. Market research can tell you: Is there a demand for your product or service? How big is the market and how easy is it to penetrate? Are there lots of competitors, or none at all? (Both can be warning signs.) Is the industry you’re entering in growth mode, or is it in decline?
- Know your costs. How much will it cost to start your business, including paying yourself if you need a salary? Do you have the capital you need? If not, where will you get it and how realistic are those plans?
- Talk to your family. If you’re humming along but your spouse is a nervous wreck at the idea of your starting a business, you need to find out what’s worrying him or her. Get specifics (“We’ll lose the house/the kids’ college fund”) and show how you’ve planned so these problems won’t happen.
- Have a backup plan. Most startup business owners rosily assume everything will go according to plan. But successful business owners also plan for the opposite. Consider the worst that could happen and how you’d deal with it. What if your financing doesn’t come through, your marketing strategy doesn’t work or your prices turn out to be too high? What bigger industry, national and global trends could torpedo your business? It’s crucial to have a backup plan.
If you have taken these steps, and still feel no fear, congratulations—looks like you’re ready to jump out of that plane.
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