Lots of people dream of starting their own businesses, but they’re held back by the worry that it’ll fail. This is no trivial thing to be concerned about – a failed business can leave you saddled with loans you can’t pay back, and harm your credit rating, and your credibility as an entrepreneur. For many people, they have one chance at launching their first business and if it goes awry, they have no option but to return to the world of regular employment, however much it chafes. Going back to the bank or investors to demand a second chance rarely gets more funds.
To avoid this eventuality, you need to start out feeling confident that your business idea will go the distance – that you have a concept that checks three important boxes:
- People want to pay for it
- You can provide it profitably
- You have the skillset and knowledge to work effectively in the field
If you skip the important concept testing step of creating a plan for your business then you can’t be sure the core idea you’re basing your business around lets you succeed in these three key areas, and you could run into a series problems further down the line.
One of the ideas that animates people to start their own business is consultancy – after growing their experience of an area through a standard job, they calculate that they can make more money, and have more independence, providing that expertise to more businesses, freelance.
If that’s your plan, you need to ensure that your research shows that people are willing to pay an outsider for that service – after all, you gained your experience in a salaried position. If it’s common for people to hire experts in your field full time, there simply may not be a market for consultants!
You also need to look at profitability – would charging around the market rate for your services allow you exist in profit, factoring in expenses like travel, equipment, professional memberships and registrations, certification and the fees involved in setting up your own business.
Finally, your research needs to take a proper look at the field you’re focusing on and your skills and experience within it. If you don’t have the broad base of experience in the field, be it finance, management or project management, you may simply not be able to build a sustainable career. You need to be sure you’re providing more insight than people can get from their regular members of staff to make your proposition worthwhile.
Researching all of this, and properly testing your concept against reality can help you to feel confident about your business idea, find better funding and sell yourself to customers more effectively!