New year, new business? Ask yourself these 3 important questions first
With several years’ advice experience under your belt, you may be considering starting your own advice firm.
As an aspiring business owner, the first step is to work out how much income you’ll need and where you will find the launch capital to get started.
Writing your business plan is the straightforward part but building a workable plan that fits your life goals is often much harder.
So, while you’re figuring out the financials of your new venture, make sure you also face up to answering the more difficult questions about why you want to venture out on your own and whether you have what it takes to withstand the pressures of being a business owner.
Ask yourself the hard questions before you commit to going it alone.
1. What am I going to get out of doing this?
First up, consider your motivations behind wanting to set up your own firm.
Be brutally honest with yourself. Are you doing it because you can see a better way of doing things, because you don’t want to answer to another boss, or do your interests lie in earning more money or elevating your status?
All and any of these motivations are fine, but it’s useful to gain a clear understanding of your ambitions before you get going.
Your core motivation will be what you’ll need to remind yourself of when things get tough. If your motivations aren’t strong enough to get you through, you may not have the determination you’ll need to stay the course.
Reach out to other people in the industry who have already taken the step to build their own firm. Discuss your ideas and intentions and ask questions to learn about experiences others have had. This way, you can learn what to avoid and, hopefully, reach a balanced and informed decision.
By talking to other advice practice owners, you’ll also have a network of useful people to bounce ideas off and discuss future plans with.
2. How well do I manage people?
There’s no escaping the fact that if you’re going to set up your own advice firm, you will need other people. This will mean you’ll have to spend some of your time dealing with managing people, as well as time-consuming back-office administration that will, at times, prevent you from focusing on spending time servicing clients or developing the business.
This will, of course, be frustrating. But are you equipped to handle it when it happens?
If you’ve been used to working alone for years, you may find working with others a difficult transition. And you’ll also have to manage them.
Before you hire talent, you need to ensure you’re open to employees contributing ideas and challenging the way you do things.
On the same topic, hiring talent takes money. Ask yourself if you’re happy to give part of your earnings away to entice employees to join your firm. Likewise, are you willing to share some of the equity in the business to tempt others to join you?
Think about what you are willing to part with and don’t be tempted to give too much equity away before you’ve got started. Any decisions you make about how to remunerate employees should be considered as part of your long-term strategy and you need to account for the fact that it may take some time for your business to generate the level of income you desire.
3. Do I really want to run my own business?
It might sound a bit crazy, but you may find it useful to have someone interview you about your business plans and what you intend to do and why.
If you’re put on the spot and struggle to respond to questions asked, you may not be equipped for success.
Being a business owner can sometimes be lonely. By having someone ask you the hard questions, or questions that haven’t even occurred to you, you can stress-test your ambitions and make sure your heart is truly in it.