The Decision To Startup
2015 is here! And I all can think about are the opportunities that await ahead for me and Leap. Five years ago I made one of the biggest decisions in my life, and decided to leave the safety of my job to pursue the path of entrepreneurship. Reflecting back on that moment I can’t help but think about the obstacles I faced, and the smart decisions I made early that lead me to success. After revisiting my own startup story, I decided to share the five most important questions I asked myself before setting out to start Leap72.
Here are the top five questions that every aspiring entrepreneur should ask before they quit their job and take the leap:
Do you have enough capital for two to three years?
This question although simple, is the most under asked question with new entrepreneurs. More than 50% of businesses fail within their first two to five years of operation because they are undercapitalized. One of my favorite personal phrases is “money creates opportunities, poverty creates immobility”. If you want to guarantee your startup is successful and free from immobility, then secure 24 months to 36 months of funding before you startup. This will give your business enough fuel to carry it’s operations while you build your revenue streams.
- Do I really know how to sell this?
In my experience of consulting new companies, one of the characteristics I have noticed among the most successful ones is the ability to produce consistent sales. If you’re not a salesperson, then take a few months to learn how to sale, or at the very least partner up with someone who can sell. The acquisition of money should not be the main purpose of any business, but sales should always be a top priority. If you can’t sale, then you can’t produce revenue, and your business dies.
- How do you plan to differentiate yourself from Competition?
Today’s marketplace online and offline is highly competitive. Deciding to leave your cubicle to start a company that sells a “me too” product or service may not be the best decision in this economy. Thanks to the internet, the reduced cost in starting a business, and big budget advertising companies desensitizing consumers, it has become increasingly difficult for marginal copycat product/services to get noticed. The world doesn’t need another Facebook or Starbucks. Ask yourself what can I do better than the competition? Asking that question should help you figure out your unique value proposition. Helping to differentiate you from your competitors, and making it easy for consumers to see what makes you special.
- What sacrifices will I have to make to make this successful?
When I asked this question over five years ago, the answer almost made me reconsider my decision to startup. There is a certain romanticism attached to entrepreneurship that can blind you when you’re starting up a business. The feelings of empowerment, freedom, and fulfillment are just some of the emotions that can overtake you. Leading you to make more sacrifices than what you, or your family may be prepared to live with. To ensure you keep a healthy work life balance, write out the all the sacrifices you may have to make to pursue your startup. Then make sure you’re mentally and emotionally ready for them.
- What is my exit strategy?
This is probably the question you should ask yourself first. Your exit strategy is your brass ring. Your big pay off. The special achievement you want your business to achieve. More often than not, most exit strategies involve situations where entrepreneurs receive huge payoffs for either selling their company, or taking it public. Having this decision made at the time you found the business, will give you clarity on how to grow and management it. Knowing you want to sell or take your company public forces you to make different decisions on how you do everything. In my opinion, it gives you better focus and direction.
My Parting Advice
Entrepreneurship is built on adventure, but adventure without success is like being overworked and never paid in my book. My advice to anyone striking out on their own in 2015, is to go for it, but plan for it. Don’t fall in love with starting up a business. Starting up is fun and exciting, but don’t let the process blind you to what you need to do to become successful.