Starting your own business is a momentous step – a dream for some – but sometimes we get so caught up in the excitement and promise of something new, shiny, and all yours; that we can forget about the commercial realities. And they eventually catch-up with us.
I’m all for people, and women in particular, pursuing their passions and making a living out of it; but you really need to be financially savvy from the start to make it work, which includes working backwards. What do I mean by that? Instead of thinking about the business you want to run and how you plan to do it, first consider how much you need to earn to have the lifestyle you want.
For example, you might want to drive (insert the name of flashy car here) – and there’s absolutely nothing wrong with that – but are you going to be able to write enough blogs a week or sell enough cups of coffee to achieve that with your current plan? If you need to write 50 blogs a week that take an hour each to reach your desired income, that’s already 50 hours – what about the time for admin or marketing? And the rest of your life?
Of course, I’m not saying that you shouldn’t go into business; but it may require either re-thinking your business model or readjusting your lifestyle expectations – at least in the interim.
Here are three commercial reality checks to tick-off:
- Choose lifestyle first : Ask yourself, ‘What do I want out of life?’ Put a dollar value on what you want to do and work backwards. How many customers or sales do you need to reach that? Is that possible working the hours you want to work (or have the time for)?
- Ensure you have the support networks at home : How will your partner react when you are up till all hours again answering emails? Will you feel comfortable missing out on watching the kids play sport some Saturdays? If not, are there any realistic modifications that can be made now to ensure these important aspects of your lifestyle are not compromised?
- Be realistic : You can set out what you want to achieve, but you need to decide how first. There’s nothing wrong with working 80% of the time as long as you are clear about that from the start and the people you care about are on-board with your decision. Or – on the flip-side – if you can only commit 10 hours a week to this business, is that time going to be enough to provide for your lifestyle goals?
It’s best to have this commercial reality check and a lifestyle plan now rather than your new business dream causing sleepless nights later.