Are You Startup-Ready?

You have a great idea, and you’re anxious to get underway and start down the road to business success.  There’s no better feeling for an entrepreneur than the euphoria that comes with an early-stage startup.  Hold on though.  We’ve all heard the grim statistics about business failure rates, and while optimism is an absolutely necessary entrepreneurial trait, we need to proceed with a certain amount of caution if we’re going to avoid becoming part of those statistics.  Before rushing blindly into an endeavor that’s doomed, take a short time to review a few points to increase your chances of success.

Is this the business you’re prepared to do for as long as it takes? Even if you have a clear exit strategy that involves selling the business or you plan on eventually stepping out of day-to-day operations, you’ve got to be sure you’re ready to devote yourself 100% to the business until then.  Be sure to work out exactly what your day will realistically look like every day once your business is up and running.  Is it the kind of work you’ll enjoy and be able to do for the long hours it will take to make your business a success?  You can have an amazing business concept, but if you fail to break the business down into the actual tasks that will be necessary to perform daily for the business to operate, you might find you’ve created a job for yourself that isn’t at all what you had in mind.

Have you thoroughly researched your idea, to include the market need, competition, and other factors that will impact your success? The worst thing a budding entrepreneur can do is to rush into a business before taking the time to perform proper due diligence on the idea.  You need to be crystal clear on your concept, how you’ll market it, who your customers will be, who your competitors are, and how the business will operate, just to name a few key factors.  Also think about how you plan to differentiate yourself from others offering similar products or services.  What will you offer that will compel people to choose your company over others?  A lot of these questions will be answered by putting together a business plan, which doesn’t have to be a huge, formal document, but should be detailed enough to address these basic issues.

Do you have access to enough capital to make your idea fly? The number one reason startups fail is due to lack of capital.  For a great many business ideas, finding financial backers or taking out small business loans isn’t necessary.  In fact many very successful businesses have been “bootstrapped” – started on modest budgets.  Still, it’s important to be realistic about your personal financial needs and those of your business.  If you’re expecting to make a living right off the bat, you might be in for a letdown, so be prepared to support yourself in some way other than your business.  Otherwise you might end up having to cease operations to find a job, and few things can be more discouraging than that!

Clearly there are other considerations before starting a business, but these are the most overlooked by excited entrepreneurs.  Again, it’s important to be optimistic, and reviewing these points shouldn’t discourage you.  If it is discouraging to think about these questions, it’s a good sign you might not yet be startup-ready.  That doesn’t mean your concept won’t fly, just that you have some more work to do.  And work is the key.  The opposite of someone rushing into a business is a would-be entrepreneur planning and contemplating for months or years on end without ever really taking action.  The best thing you can do is somewhere in the middle – smart action.  Smart action ensures you’re taking action, and that taking that action is the right thing to do, at the right time.  So if you’ve thought these questions through, and you are in fact start-up ready, don’t hold back.  Go for it with everything you’ve got!

Adam Toren

Adam Toren is a serial entrepreneur, mentor, investor and co-founder of YoungEntrepreneur.com. He is co-author, with his brother Matthew, of Kidpreneurs and Small Business, BIG Vision: Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right (Wiley). He’s based in Phoenix, Ariz.