Though the U.S. business formation rate is near a 40-year low, Americans continue in droves to quit their day jobs and launch their own enterprises. In 2014, more than 450,000 did so.
Are you thinking about doing the same? Before you begin, examine your own personal and professional life. Look for these five signs that you’re truly ready to start your own business.
- You Have the Means
Not everyone who launches his or her own business is independently wealthy. Many entrepreneurs, perhaps most, begin by bootstrapping — plowing their meager resources into the enterprise and reinvesting the profits as they come.
However, one key tell that you are not ready to start your own business: limited financial resources coupled with an unwillingness to bet what you do have.
If you have ample resources to self-fund your enterprise (at least at the outset) or you are willing to take a risk with whatever savings you’ve managed to accumulate, you’re ready to start a business.
- You’re Driven to Succeed
You have the means. Do you have the will?
The best entrepreneurs are driven to succeed, no matter how long the odds or how unfamiliar the situation.
“When I started my first business at the age of 21, I was determined and resilient’” says Miami-based entrepreneur George Otte, President & CEO of Otte Polo Group. “What got me thru the ups and downs of starting a business was my will to succeed: I knew that if I worked hard and delivered for my clients, my business would succeed. And it did.”
If you share Otte’s passion for success, you are ready to start your own business.
- Your Expectations Are Realistic
Otte’s experience is not unusual. Even with great ideas and strong business models, new enterprises typically struggle to gain traction in competitive industries. Wildly successful “disruptors” like Uber and Google are known as “unicorns” precisely because they’re so rare. If you expect your new enterprise to follow a parabolic upward trajectory, you are more likely than not to be disappointed.
On the other hand, if you maintain realistic expectations about your company’s growth (and not just convince yourself that this is the case), you are ready to start your own business.
- You Are Prepared to Accept Feedback
Every entrepreneur must be ready to accept criticism: from mentors, customers, vendors, peers, friends, family members, even subordinate employees.
“Take as much feedback from as many people as you can about whatever idea you have…seek critical feedback,” famed entrepreneur Elon Musk told Inc Magazine. “Ask them what’s wrong. You often have to draw it out in a nuanced way to figure out what’s wrong.”
If you are prepared to accept and internalize criticism, you are ready to start your own business.
- You Know Others Who Share Your Vision
Even the most talented entrepreneurs can’t do everything on their own. As your enterprise grows, you will need to flesh out your team with talented people who share your vision. It helps to know these people before you need them, and to keep them abreast of your new business’s growth. When you’re ready to hire them, they’ll be more likely to take the job.
Have a tip to share on starting your own business? Please add it in the comments section below.
