By Maryam C
Edited by Ali Reza
From Employee to Entrepreneur
The jump from employee to entrepreneur is never an easy one, and it can actually be a little daunting—but it’s also a genuine thrill. Starting your own business means going out on a limb, chasing a dream, and grasping for the life and the lifestyle you crave. The best case scenario? You succeed. The worst case scenario? You do something brave and amazing, you learn something along the way, and at the end of it all you lick your wounds but live to fight another day.
Because the stakes can be high—you’re forsaking the stability of a regular paycheck and possibly investing a good chunk of your family’s resources—it’s obviously important to go about things correctly. The process of starting a company may vary slightly from one entrepreneur to the next, but there are some basic tips that are relevant across the board.
The important starting point is some earnest reflection. Before you take any real action, invest in some deep, candid thought.
Where are you strong—and where are you weak? Evaluating your skills and your personality is important. This is not necessarily to talk yourself out of starting a business, but rather to know where you need to rope in some help. You may have a lot of great, relevant skills but not much financial savvy—which means investing in some business classes or hiring an accountant/bookkeeper may be necessary.
Something else to evaluate: Your goals. Why do you want to start a business? Is it to achieve a certain lifestyle? To have more flexibility in your schedule? More money? Or are you simply really passionate about a particular product or industry? The answer to this may dictate the kind of business you start.
Doing Some Research
Next comes the really difficult part: Turning your appraisal toward the industry in which you want to launch a company. What kind of industry is it that you’re preparing to enter—and is there any room in it for you?
This is where you may encounter something of a reality check. A crowded and competitive industry is going to pose big challenges, and you’ll need a way to distinguish yourself.
Google can be a great tool here, but you may also want to look up some of the industry’s key publications and try to get your hands on a few copies.
Think about how urgently and fervently people want whatever it is the industry provides. How much money will it cost you to deliver a product that stands out—and for how long will the product remain relevant?
Get Down to the Nitty Gritty
The next step is to take things into a more practical, tangible realm. Start with this: Make your company legal. Do some research into the different business licenses required by the city, county, and state. Also check around for any insurance that you’re required to have, or from which you might benefit.
You should also meet with an attorney to speak about business formation. You have several options to choose from—sole proprietorship, partnership, corporation, limited liability corporation—and you’ll want to discuss the pros and cons with someone who knows. There are legal and tax implications here, and it’s not a decision to make lightly.
Next comes the planning process: Determining how much capital you will need to launch the business and sustain it for a while. How will you get your products manufactured, your marketing expenses met, your overhead dealt with, and a decent cash flow established? And oh yeah: How will you pay yourself?
Think through financing options but also through the different expenses that may, in the long run, be good for your business to incur—including outsourcing important tasks to graphic designers, marketing professionals, lawyers, and so forth.
Develop a business plan, and include within it an elevator pitch. Train yourself in selling your company in 30 seconds or less—because without selling, you don’t have a business: You just have an idea for a business.
The steps obviously go on from there, and continue for as long as your business keeps its doors open—but these first steps will orient you in the right direction toward an exciting and hopefully successful adventure in entrepreneurship.