Before starting a new business it’s important that you make sure that you have the right economic condition, as well as the capability and disposition needed to develop a long-term enterprise.
The following 10 questions will help you determine if managing your own business is a real option for you.
1. Am I willing to sacrifice my personal time in order to run my business?
In Puerto Rico, there are 20 annual holidays, both federal and local, and employees of the public sector and many private companies are entitled to these days off, and to their accrued sick leave. For the businessman, however, holidays are almost nonexistent and being ill is a luxury. The business will always have some pending matters that have to be addressed, especially during its first years, and you will have to be willing to work while your family and friends ―and even your employees― are enjoying a day at the beach. If you are passionate about the industry you have chosen, your new business will be a source of joy, not a hindrance for the lifestyle you really want to lead.
2. Is my idea unique enough?
You may have developed an innovative product with commercial potential, or maybe you are thinking of opening a business of high demand as a beauty salon. In either case, it is important to define the attributes that will set your business apart from its competitors. In the so-called “knowledge economy” towards which Puerto Rico is heading, the ability to develop innovative ideas, services, and products is more attractive to potential investors than those already available in the market. Investing in a market analysis to assess the possibilities of your products or services may, in the long run, save you money and expedite the success of your enterprise.
3. Do I have the money or good credit to start the business?
Do not start a business believing that it will generate profits from day one. It is advisable to plan ahead and know that it will take months, if not years, for your business to become profitable. You should also plan for the unforeseen expenses that arise in the day- to-day functioning of any enterprise. If you are considering asking for a bank loan to start your enterprise, you should know that your credit history is very important. In these hard economic times, good credit can take you a long way to obtain the necessary capital for your business.
4. Can I start a part-time business?
If you have a job, but your goal is becoming your own boss, starting your business on a part-time basis could be a viable alternative; risks would be minimized and you would maintain a stable income while determining if you would really like to continue along this road. The disadvantage of a part-time business, especially if it involves employees is that “when the cat’s away, the mice will play” and the lack of the owner’s personal touch often results in failure. Furthermore, dedicating additional time to a business after completing an eight-hour workday is a routine that not everyone can handle and that might lead physical and mental burnout if time is not managed adequately.
5. Am I passionate about the product or service I will sell?
By definition, a good entrepreneur must also be his best salesperson. You will have to be able to sell your idea to the bank, to potential investors or partners and, of course, to your customers. Your passion for the business you are establishing is the key for its development, and the more you know about your industry, product or service, the more successful it will be.
6. Can I handle many tasks simultaneously?
When starting a business, in most cases the entrepreneur has to be boss, promoter, and human resources specialist. If you love the usual 8-hour routine during which you perform one or few tasks daily, developing your own business is probably not for you. The successful businessperson has to be able to wear many hats during a typical workday.
7. Am I willing to take risks?
Risk is part of the very nature of the entrepreneur. Any investment is a bet that there is a market for that product, service or idea, and like in all gambling, you have to assume the risk of losing. Before starting your business, make sure you have the capacity, knowledge and aptitudes to survive lean times, not only to enjoy the fat ones. Be aware of how much money you are willing to invest and if that amount will be enough for the successful operation of your enterprise.
8. Do I have the support of my family and friends?
The encouragement and support provided by friends and family will be crucial to your well-being and to your developing business, especially because of the long hours you will put in at the start. Talk to your spouse or partner and discuss the sacrifices involved in order to avoid conflicts once the business is operating. Discuss your ideas with your closest friends and don’t hesitate to ask for help or advice that could be valuable for the growth and success of your venture.
9. Am I able to plan ahead and anticipate my company’s future?
The successful businessperson has the ability to foresee his industry’s trends and to adapt swiftly to change. When you own a business it is not enough to deal with the day-to-day happenings―which is a complex job in itself―you have to find the time and resources to define the course of the company, study the market and make the necessary adjustments along the way. You don’t have to be psychic, but all entrepreneurs are seeking new opportunities and your ability to plan ahead will be an asset as your business develops.
10. Are you a leader and do you enjoy relating to others?
If you decide that you will be your own boss, and your business is successful, you probably hired employees that will now look up to you as their leader and role model. Good employees are the solid foundation of a successful enterprise, and it is vital that you establish a good relationship with your coworkers. It is important that you possess the leadership skills to bring about the best efforts and commitment from your staff. Good people skills are also an asset when developing relations with your business’ support network, and its clients and suppliers.