“Do not wait for God to make you an entrepreneur, it is not his job.”
I am yet to meet an employee who never wanted to be an entrepreneur – be it full-time or part-time. After working for few years in the corporate world, the idea of being your own boss appears very attractive. There is nothing good or bad about the idea, but I am usually shocked at the sheer unpreparedness and naivety with which these professionals plan their venture.
All passenger and cargo flights need some clearance from the technical team to ensure a smooth take-off. Let this article serve as the check points of clearance you should tick off before you take off as an entrepreneur. Do not let my harsh questions stop you, but make sure you evaluate them as they can maximise your chances of succeeding in your business venture.
Before you fly, test the wings.
1. What are you reasons for starting up?
Most people who ‘start-up’ are those who hate their bosses or do not like the salary they earn. In my opinion, this maybe a good reason to start-up, but it is certainly not the best reason. Frustration pushes you toward a decision point, but it is your inspiration that will carry you to the destination. Take a piece of paper and write down 10 reasons why you want to start-up and see if you are doing it out of inspiration or due to the tough time you face in your office. Remember, you will face frustrations and disappointments in your business too, and it is your reasons that will show you the right path.
2. Are you starting full-time or part-time?
The next important question you should be aware of is the model you plan to follow for your business. Do you want to go all out or do you want to test waters first? In case you do not have solid experience or education in the area of your start-up, I would advise to start with the part-time model. Your salary will keep you going and the voluntary work will add to your learning. Just ensure that you are not violating the contract with your existing employer. Do not compete in the same industry and never use the official resources for personal use. This is the most unethical and illegal thing one can possibly do and the consequences can adversely impact your reputation. Give your best to current employer and use your weekends, holidays and free time for your business ideas. You will never feel totally ready to start full-time, but after doing part-time business you will know the right time to take the plunge.
3. Where are you, what do you have and where do you want to be?
You cannot reach where you want to be without knowing where you are. Assess your skills, your resources, your shortcoming and your current situation on a regular basis. Do not be like a deer caught in the headlights when business problems show up. As Warren Buffett said, “Risk comes from not knowing what you are doing.” First you have to learn and then you need to apply the learning to earn. Write down the vision and mission you have for your business idea. Do proper planning and take a shot at building the business model on paper first. Participate in business planning competitions and get rejected by venture capitalists. Every rejection is an opportunity to make your plan fool-proof. If you are willing to train hard in a simulated business environment, you will bleed less in the actual war zone. Begin with an end in mind and work towards the goal.
4. What is your value proposition?
You are not in the business of product or service. You are in the business of solving customer needs. Look at any successful entrepreneur and you will realise that they never fall in love with their products. They are motivated by the need to serve the customer with an idea, and the idea keeps changing form. Sometimes, it is a product, and sometimes it is a service. What is your unique value proposition? How is your offering better, faster, cheaper or different from the existing competitive offerings?
5. Who are your customers?
Do not try to sell to everyone. Business happens when a buyer meets a person with a need and money to fulfil the need. One of the biggest mistakes that aspiring entrepreneurs make is to make their business plan on the basis of the need of the customers. My experience taught me that over 80 per cent of the people who need your product either do not have the money to buy your product or do not have the willingness to spend money on your product. Make your business plan on the basis of customers with buying power not the customers who simply need your product. Also never force your friends and family to buy from you, you will lose some good relationships.
6. Are you self-employed or are you an entrepreneur?
The ultimate purpose of business is to make you free not busy. Yes, the initial few years are busy but you must work to figure out an independent business model that can work despite minimum or no intervention from you. One rule of thumb is – will your business continue to work if you do not go to office for six months? If yes, then congratulations you are doing it right. The purpose of business is to generate passive income or profits for the owners. Build your own system to free yourself, otherwise work for a system created by others that does not work only because of you. Self-employed people have a bad work-life balance, even worse than employees who work for long hours. They get the money an employee gets and yet do the work of an entrepreneur. Your family needs you too, so make sure your business gives you enough quality time.
7. Who are the people you will work with?
Always work with people who are smarter than you, more passionate than you and are solution-oriented. The success of a business depends upon the quality of the founding team. If you are starting alone then at least bring in some advisors. The roles, rights and responsibilities of the founders should be well-documented in paper leaving no scope for confusion. Go on a vacation with the planned founding team members, do a pilot project to observe the behaviour. Put them in a couple of stressful situations and take an informed decision. You cannot execute the right business idea with a wrong team.
8. What is your quitting point?
Your business idea may or may not work the very first time. If your Plan A fails, you must remember that there are 25 more alphabets to attach to your plan. Go with realistic expectations. I am shocked when I meet few aspiring entrepreneurs who say that they will implement the idea for five-six months and in case it does not work they will go back to their jobs. Even a baby takes nine months to come into this world, then why do they have such unrealistic expectations from business idea. People study for 20 years so that they can work for next 40. Therefore, at least give yourself a couple of years to learn and make your idea succeed. However, do not hang around for too long. Some ideas never take off so be quick to identify them and then abandon them. Look for other ideas and bring the learning of your previous attempts to the new idea. This is how success is attained.
9. How agile and growth-focused are you?
If you are following the business environment closely, you will know that disruptive forces now exist in every business. If you do not disrupt your business model yourself, competition will do that for you. The life span of the companies is reducing and some of the start-ups are killing mammoth century-old businesses in a couple of years. Launch a business keeping in mind the disruption and innovation happening in your industry. Be agile enough to fix the bugs and never fight the megatrends. Learn to ride the right business wave and you will reach the top. Focus on both growth and profitability. Be a learner who is smart enough to anticipate change.
10. How strong are you psychologically?
Entrepreneurship is a lonely journey, at least at the beginning. You will be going against the wish of your family for the sake of your dream. You do not even know if it will take-off or if it will crash. Your friends will be getting fixed salaries, getting promoted, taking vacations and enjoying the perks their job brings while you will be bootstrapping and trying to minimise expenses. You will be required to wear many hats in one single business – purchasing manager, product developer, business development executive and customer relationship manager, and not to mention the role of operations manager. If you are looking for an easy life, then business is not for you. You will never know how strong you are unless you are put in a high pressure situation. Entrepreneurship is a high-pressure situation.
As someone once said: An entrepreneur is a person who is willing to do what others will not do, to live a life others cannot live. However, there are no guarantees. The reason why the chairperson of a successful company deserves the salary and profit he or she gets is because they took the risk to create something out of nothing.
I have deep respect for entrepreneurs both existing and aspiring ones. They are the backbone of the economy and most of the jobs exist in this world because of the blood, sweat and tears of an entrepreneur. Take up this noble journey for not what you will get or lose, but for what it will make of you.