If you’re asking yourself this question seriously, the thought most likely popped into your head long ago and you’ve been wondering for months if you’re ready to become an entrepreneur. Unfortunately, there is no universal key to success, and there are dozens of factors that can influence the outcome of your venture, from the economic climate to your personality and the ideas you’re bringing to the market. Timing is one of the ingredients in the elusive secret formula that makes businesses thrive but, how do you know it’s the right time to quit your job and go into business alone? While it worked out for some, other brilliant start-ups were too ahead of their time and should have waited for a while longer.
Ultimately, starting a business is a deeply personal decision. You can never eliminate risks completely, and the possibility of failure is something you have to live with. According to some business consultants, if you want to start a company, you should just go for it, because there’s no such thing as the “right time” and there will always be an excuse to put it off.
But it’s equally true that timing matters and excitement alone may not be enough to keep you going. There are situations when you should seize the opportunity and start the business as quickly as possible, and situations when a few more months can boost your success chances. Here are a few ways to find out where you stand:
What does market research tell you?
Enthusiasm and ambition can take you very far as an entrepreneur. They can help you cope with all the “no” answers that come along the way, survive late nights, and manage limited budgets. However, they’re not the only things that matter. If they were, we’d have no businesses going bankrupt.
Before you start a business, regardless of its size or field, you still need to invest some time in market research and consider factors such as:
- The state of the economy, and especially if your field is resilient when faced with a recession
- The state of your industry and its outlook for the following five years
- Your competition: what are they doing and what strategies are working for them?
- Is there a real demand for your products and services?
- Who are your potential customers? What purchasing habits do they have, what are their needs, and how can you satisfy these needs?
- What offers you a competitive advantage (i.e. product variety, prices, convenience, etc.)?
You can conduct all this research alone but, for best results, hire a professional company. This way, you’re avoiding biases, and you’ll receive accurate data based on which you can make informed decisions. Don’t feel discouraged if your idea isn’t 100% right. That almost never happens. Market research companies offer a wide variety of services and, among many others, they can help you discover how to tweak your business so that it has better odds at survival. Many managers like making decisions based on intuition alone and while it cannot be denied that the “gut feeling” is worth listening to, more often than not, it’s hard data that drives the best business decisions.
Does waiting help you gain more experience?
Sometimes, waiting to start your own business means wasting time and losing momentum.
Other times, waiting can be an opportunity for personal development and gaining experience.
For example, if you’ve worked in a field for over five years and you already know it inside-out, there’s no point in waiting. You already have insider knowledge, it’s time to put it to good use and become your own boss. The same thing should happen if you have a brilliant idea that no one else has thought of yet. In this case, it’s important to beat potential competitors to the market. The best example in this regard is the post-lockdown business environment. Entrepreneurs who had great ideas and implemented them quickly reported the best results. So, if you think there’s a better way of doing things, go for it before someone else does.
However, if you want to start a business in a field you don’t know too much about, waiting a few more months can help consolidate your knowledge and invest in personal education. For example, you might not want to quit a new job if you can still learn something from it. At the same time, you can also read entrepreneurship books, study business case studies, or take an online management course. If you are informed as well as enthusiastic, you have a better chance of success.
Do you have a safety net?
No matter the field in which you want to start a business, chances are you need a considerable upfront investment. Even if you’ll be working from home, you still need money for equipment, incorporation fees, inventory, website development, and marketing. And even if in the first months you can skip your paycheck or get paid less, in the long run, you still need a safety net. In the ideal case, you may be able to split costs with your spouse, and thus handle the financial pressure better. You should also have an emergency fund, in case your business venture doesn’t go well and you’re left without a source of revenue. To avoid unpleasant surprises, make a list of business costs in advance.
But, no matter what, do not start a business if you don’t have any savings or an emergency fund. There are several examples in the media of entrepreneurs who started out with $20 in their pocket, and they somehow managed to turn that into multi-million-dollar corporations, but they’re the exception to the rule, and you shouldn’t base your venture on luck.
The best course of action would be to save the equivalent of six paychecks or, if that’s not possible, find a source of financing such as a loan from a friend, family member, or financial institution.
