Don’t Let a Layoff Lead to a Rash Decision

Business and economic publications tout the increase in small business start ups during a recession. Many folks, now without employment, are rushing out to start their own business vowing never to be in this position again. The dreams of owning your own business, setting your own schedule and making your own decisions seems almost irresistible. Do you and your family a favor, don’t jump in before doing your homework.
What do you need to consider before taking the plunge into entrepreneurship?
1- Do I have what it takes to run my own business? Most people dream of being the boss but it’s not always a party. Have you ever heard the term “The buck stops here”?, ” The fish stinks from the head up”? Being on top of the totem pole means having NO ONE to pass the blame to when times get rough, and they will get rough. Do you have the stomach for that kind of responsibility? Many don’t, that’s why they don’t make it.
2- Be comfortable with risk. There will be lot’s of risk, your money, your time and your reputation are all on the table for everyone to see and criticize. You will never be able to remove risk, all you can do is try and minimize it with lots of planning, preparation and education on your planned venture. Dolly Parton said “To get the rainbow, you have to put up with the rain”. Sometimes it rains a lot.
3- You always need more money than you think. Make sure you have enough money on hand to see you through the start up phase as well as potential setbacks. This applies even more if you have a family to support. Most start up business don’t just fail, they either give up too soon or run out of money or had no business being in business to begin with. Whatever you business plan says, if it’s not viable with only 50% of your projected revenues, then I wouldn’t trust it in real life.
4- Be in it together. If you have a family, make sure everyone is on board with the decision. Many family situations have gone to ruin because one spouse went into a venture with the family finances without support of the other. If one of you is dead set against it, think long and hard before jumping in. “We blew it” is much better than “I told you so” if things don’t work out.
5- Is it what I really want? If you enjoy stress and worry free weekends playing golf and hanging out with friends then maybe starting a business is not a good solution for you. Having your own business will keep you physically and mentally occupied most of your waking hours for a long time. Starting a business is like growing a flower, it needs lots of care before you enjoy the bloom.
If your still not sure the best thing you can do is start reading. Michael Gerber’s “The E-Myth Revisited” and Norm Brodsky’s “The Knack” are two good glimpses at life as a struggling entrepreneur. Good luck!