There’s no better time than the end of the year to reflect on your goals — both those that were achieved as well as the ones still on your to-do list. Starting a business is a big goal that can’t be rushed, but if you’re regularly putting business ownership off until next year, it’s time to evaluate why.
Often, what stands in the way of starting the entrepreneurial journey is fear of the unknown. Though it’s wise to carefully evaluate if entrepreneurship is right for you, many of the concerns blocking business ownership have simple solutions. Get a jump on accomplishing your goal of launching or buying a business by reviewing some of the most common fears harbored by hopeful entrepreneurs and how to tackle them:
1. Running Out of Money
It’s true – one of the top reasons businesses fail is that they run out of capital in the first few years. A number of things can cause your business to bleed into the red — a bad location, not enough customers, higher than estimated expenses, etc. But even if you’ve built a solid business plan, there are additional steps you can take to manage your cash flow effectively. For example, Guidant CEO David Nilssen recommends providing incentives to customers to pay in lump sums rather than installments because having enough cash on hand essential in the first few years.
Another way you can positively impact your new business’s cash flow is avoiding debt. While this may seem obvious, many new business owners believe they’ll need to go into a significant amount of debt to initially fund their business, and that’s not the case. Many entrepreneurs are eligible for debt-free funding using 401(k) business financing. Also known as Rollovers for Business Start-ups (ROBS), this option allows you to use your retirement funds to launch or buy a business without taking a loan while also avoiding tax penalties. Launching your business debt-free puts you in better position to succeed because revenue earned can be put back into operating your business rather than toward interest payments.
2. Not Being Good Enough
The pesky fear of not feeling good enough to be a business owner comes at the price of two for one — the fear that the product and/or business aren’t good enough to succeed and that you are not a good enough leader to run a company. Fortunately, there are ways to tackle both of these concerns.
If you’re hoping to wait until your product or service is absolutely perfect before going to market, you’ll never make it. An Entrepreneur.com article reminds us that to go to market, you must have a minimum viable product (MVP) and only that. You’ll continue to develop and perfect your product or services as your business grows.
Guidant Financial Executive VP Devin Miller supports this point by using Agile to grow your business. Miller explains that if you want to be able to iterate your product or service, you need to build it in smaller, repeatable steps. For example, instead of putting all of your money into a new brick-and-mortar restaurant, you could first build a food stand or truck to learn about your customers’ preferences and which locations are best. In short, if you have an idea or product that’s nearly perfect, you’re far enough along that you can begin launching your business.
When it comes to doubting yourself as the CEO or owner of a new company, you’re not alone. And while the top position in your new company can seem rather lonely, there are steps you can take to ensure you have the right support, such as joining an executive organization, finding a business mentor and hiring a good team to help your business succeed.
3. Starting a New Career
If you’re in a stable career that pays the bills, it’s scary to think about jumping ship in order to pursue your entrepreneurial dreams. However, starting a new career as a business owner, particularly later in life, can put you ahead of the curve when it comes to becoming a successful entrepreneur.
From more practiced business skills, to an expanded network of contacts, your first career in the corporate world can help you successfully tackle your second career as a business owner. Older business owners are also more likely to qualify for small business funding because of longer credit histories and greater personal and retirement savings.
Though sticking with a stable job may feel like the path of least resistance, you’re still going to utilize the skills you’ve gained that helped you build a successful career to launch a business. It’s never too late to become the person you’ve always wanted to be.
4. Not Knowing Where to Start
Buying or launching a business involves many steps, so it’s easy to feel confused when trying to figure out your first move. Fortunately, there’s a starting place that makes sense for almost every business — securing financing. Because your business can’t operate without cash, learning how much small business financing you’re eligible for from the get-go can set you up for long-term success.
In order to gain a holistic, high-level view of your funding options, we recommend getting pre-approved using a system like our pre-qualification tool. In minutes, you’ll learn your total funding amount as well as what types of funding you’re qualified for. Getting this information early in the process of buying or starting a business can streamline the process by telling you:
- If you need to take steps to become a more attractive buyer, such as improving your credit score.
- What kind of business you can afford i.e., franchise vs. independent, online vs. brick-and-mortar.
- If you may qualify for funding arrangements you hadn’t considered, such as 401(k) business financing or an unsecured line of credit.
If you focus on your fears, you can find a million reasons not to start a business, but the only thing you need to move past those fears is the passion to become a business owner. Each of the fears or concerns you conjure can be tackled and overcome on your entrepreneurial journey. Ease your fears by understanding your business’s financial limitations, building a minimum viable product and finding confidence about starting your new career.