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With all the hype about working for yourself, starting a business, creating passive income, becoming a girl boss, and everything in between, it’s not surprising that many women are leaving their jobs to start their own businesses (or starting part-time businesses).
There’s no shortage of information on how to start a business,but wading through all the content and resources available can be overwhelming.If your goal is to start a successful business,it’s important that you lay a solid foundation for your business.
For those of us who don’t come from entrepreneurial families, finding the right advice and support when starting out can prove difficult. That’s why I’m starting a series of posts which I have dubbed “The Freedom Through Business series.”
This is a free series on how to start a successful business so you can achieve financial freedom through entrepreneurship.
The percentage of female-owned businesses is increasing every year. Women are leaving the workplace to start their business. There are many reasons why some women decide to become business owners.
Here are some of the most common reasons many women are choosing to become entrepreneurs:
Common reasons for starting a business
- Lack of equal pay (yes, men still earn more than women doing the same job).
- Work-place policies that impact the quality of life.
- Some women want to stay at home with their kids, while others crave work-life balance.
- To help people.
- Financial freedom. Many women believe they can earn more money being self-employed, or owning their own business.
These are some of the reasons women are choosing entrepreneurship.Whatever the reason, it is undeniable that countless women are embracing entrepreneurship in large numbers.
If starting a business seem like a more attractive alternative to your current situation, then make sure you consider some important factors before you leave your job or hang up your shingle.
There’s a reason more than fifty percent of new businesses fail within five years.
While it is possible for a business to fail as a result of bad luck, it’s more common for businesses to fail due to lack of research and planning, inadequate funding or resources, mismanagement or in some cases the business owner lacked the required skill-set to run their business successfully.
There are many pros and cons of starting a business. It’s a great idea to understand the advantages and disadvantages of starting a business before you quit your job or launch out on your own.
Let’s look at some of the pros and cons of entrepreneurship.
Advantages of being an entrepreneur
- Flexibility. Being your own boss gives you a degree of flexibility that working for an employer does not.
- Unlimited income. There’s no cap to what you can earn as a business owner.
- Personal development. Being an entrepreneur forces you to grow as a person. As an entrepreneur, you should be constantly learning. Which means you have the opportunity to learn new skills like selling, marketing, branding, product design etc.
- To help people. Being an entrepreneur means you can help people reach their goals and improve their lives.
- Be your own boss. As a business owner, you are your own boss. Which means you can spend your time doing meaningful and satisfying work.
You can check out Chris Ducker’s post 10 reasons to love being an entrepreneur for some more reasons why entrepreneurship is so appealing. The post covers some of the wonderful benefits of being an entrepreneur.
Let’s look at some of the cons of being an entrepreneur.
Disadvantages of being an entrepreneur
- As the decision maker, you are responsible for the success or failure of your business. You also risk losing everything, including your savings and investments.
- You’re responsible for taxes, health insurance and other benefits which an employer provides.
- Starting and growing a business requires a large investment of time, which can affect your family life. This can lead to stress and burn out.
- There’s a steep learning curve if you lack some technical or other skills to run a successful business.
- No regular monthly salary. This is a scary prospect for lots of people, especially if you have debt or people depending on you financially.
- There is no guarantee of success.
Being an entrepreneur isn’t as easy or rosy as it is sometimes portrayed. It takes a lot of hard work,patience, and determination to succeed as a business owner.
Now that you know some advantages and disadvantages of being an entrepreneur, let’s talk about how not to start a business if your goal is to build a successful business.
I created some worksheets to go along with this post. Get your free worksheets here. No opt in required.
How not to start a business
Okay, story time. Once upon a time I decided to start a gift basket business. Can you guess what I did next? Did you say do market research? Or validate the business idea?
The first time I decided to start a business, I didn’t know you had to validate your business idea, much less how to do it.For me it was go big or go home. No half measures here. Ain’t nobody got time for starting small!
I know what you are thinking. Surely she defined her target audience, or at the very least assessed if she had the required skill-set for the business. Oops!
Sorry friends, but I didn’t do any of the above. Here are the steps I took:
1. I bought this book on how to start a gift basket business (great book by the way).
2. Watched some videos.
3. Ordered a big box of baskets and other supplies
4. Paid a website designer to build a website for my business.
5. Bought lots of baby stuff and gourmet foods to create specialty baskets for special occasions.
I invested thousands of dollars in the business while I tried to convince myself that I could run a gift basket business, even if I couldn’t make a pretty bow to save my life!
All I wanted was to start a business, and be my own boss. Some of you know what I’m talking about right? When the website designer started asking for photos of the gift baskets to upload on the website, I knew it was time to end the charade.
To summarize: I wasted thousands of dollars before giving up “the dream.” Consequently, I learned that “full speed ahead” isn’t always the best business strategy.
How about the time I “started”a professional organizing business and a personal concierge business?I’ve always been good at organizing so I thought I could earn some money doing that.
Thankfully, I invested more time than money trying to get them off the ground. You can also add cleaning and property management businesses to the list of failed businesses!
To be fair the latter was a bit successful but it failed after my marriage broke down, and I had to deal with a lot of changes in my personal and financial life (including going back to nursing school).
As you can see, starting a business on a whim isn’t the best way to start and grow a successful business.
If you’re serious about starting a profitable business, you’d need more than hype,memes and pep talk.
Of course you need inspiration and a positive mindset to succeed in business, but more importantly, you need the right tools, knowledge, resources, skills and a plan.
Instead of starting a business on a whim, there are some important steps you should take after you’ve chosen a business idea.
What to do when you have a business idea
In his book The Entrepreneur Mind (affiliate link), Kevin Johnson suggests you take the following steps when you have a business idea:
- Examine the competitive landscape to see the existing companies. Who are your competitors? What do they do poorly? What can you do differently to create a competitive advantage?
- Discuss the idea with your potential customers (validate your business idea).
- Develop a sketch or basic prototype of your product. Create a minimum viable product for your business to test the waters before investing a lot of time or money creating something nobody wants. If you offer a service, map out or list the important steps you need to take, and describe the customer experience. What problem will your service solve for your clients?
Following the three steps listed above will set you up for success, and prevent you from wasting time and money pursuing a business idea that isn’t profitable.
There are other steps you can take when you have a business idea. You can define your target audience, know and understand their pain points, and find out where they hang out both online and offline so you can reach them.
When starting a business, it’s easy to overlook or underestimate certain factors that are key to the success of your business. In my experience, these are some of the most ignored factors when starting a new business:
Three most ignored factors when starting a business
Time commitment. Starting and growing a successful business requires a large investment of time. Sometimes finding the time to work on your business can be very challenging especially if you are a mom, or if you’re employed full-time. You’ll need to spend a lot of hours after your 9-5 job to work on your business.
If you’re a mom, you have to sacrifice some family time to get your business off the ground.
Lots of women underestimate the amount of time that’s required to start a business, so they end up frustrated,and some give up because they can’t find the time they need to work on their business.
Skills required to start a business.You need a lot of skills to start and grow a business. As a business owner, you have to wear many hats. That’s why it’s so important for you to assess your strengths and weaknesses so you can identify the skills you need to develop.
Marketing and selling are two of the most important skills you need to build a successful business. However, these are the skills countless business owners struggle to master.
If you’re serious about growing a profitable business,you should strive to master the most important skills you need to achieve your goals.
Challenges. Entrepreneurs face several challenges in today’s competitive market. How you handle them will decide if your business fails or succeeds.
Three of the most common challenges women entrepreneurs face include:
1. Finding role models and mentors.
2. Finding solid networks and connections.
3. Work and family conflict.
Having a plan to navigate or overcome potential challenges will help you start and build a successful business.
Another key factor to building a successful business is having a well-defined purpose or knowing your why.
The importance of an inspiring purpose
I like this quote by Jake Desyllas in his book Becoming an Entrepreneur (affiliate link) ” The essential element of every successful business is an entrepreneur with an inspiring purpose.”
As your business grows and evolves, the technical and other details of your business will change throughout the life of your business.
Your products and services may change so you can better serve your clients and customers, but your purpose should stay the same.
Your purpose is what fuels your passion. It is the reason you wake up every morning to do the work, even when the results aren’t visible yet.
Your purpose is the reason you won’t quit even when the odds are against you. Your purpose should inspire others to invest in your vision, and to work with you to achieve your dreams.
Make sure you’re clear about the purpose for your business. If your purpose doesn’t excite you, you need to step back and reassess if your idea is worth pursuing.
It’s important to lay a solid foundation for your business. While anyone can start a business, it takes a lot of hard work, time, resources, and the right skills to build a successful business.
This post 50 reasons why some businesses fail while others succeed is a good read if you want to build a successful business.
To recap, there’s a right and a wrong way to start a business. Starting a business on a whim without doing market research or validating your idea is a recipe for failure.
Being an entrepreneur has a lot of advantages, but like everything in life, there are some disadvantages. Consider that when starting your business.
I created some free worksheets to help you think through some of the ideas in this post. You can get them here. No opt in required.
Are you thinking of starting a business, or are you a new business owner? Which part of this post resonates with you? Leave a comment or a question below.
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Other posts in this series:
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