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9 Things to Think About BEFORE You Start a Business

By JLP | February 16, 2009

The economy stinks right now. Lots of people are losing their jobs. If you are one of them, should you start your own business? Only you can make that decision.

That said, today’s Houston Chronicle offered 9 tips for starting your own business (sorry, no link for these tips) that I would like to share with you (along with my thoughts on each one). All of these are awesome tips.

1. Identify your talents. What are you good at? Don’t know? Ask your friends and family? Take some self-assessment tests.

2. Consult with colleagues. BE CAREFUL with this one. If you have a good idea, you might be picky with who you share it with.

3. Research, research, and more research. Before you jump off the deep end, make sure you know how deep it is.

4. Know your money. Better have some up-to-date financial statements. A budget and net worth statement will help you get a good idea of where you are starting from.

5. Know yourself. In my opinion, this goes with the first tip.

6. Keep records. Make record-keeping a habit. You’ll need them for taxes and other financial decisions.

7. Talk about lifestyle changes. Before you take the plunge, make sure everyone in your family is on the same page. Nobody likes nasty surprises. Everyone in the family needs to know in advance what the outcome could be and the sacrifices that may be required.

8. Find necessary resources. Financing? Employees? Equipment? Suppliers? Where are you going to get the necessary resources?

9. Write down why you decided to become an entrepreneur before you start a business. This one made me laugh when I read it but it is SO TRUE! It’s kind of like the investment policy statement that you should refer back to when times are tough. Writing down why you are doing what you are doing will help you get through the hard times and help you stay focused during the good times.

According to the Chronicle article, these tips were provided by

Topics: Entrepreneurship | 10 Comments »

10 Responses to “9 Things to Think About BEFORE You Start a Business”

  1. Tim Says:
    February 16th, 2009 at 10:59 am

    If you’re already out of work, then this becomes even more challenging. You now have the free time, but if you’re on unemployment, your state unemployment department is expecting you to spend all your free time looking for a new job. They really don’t care that you’ve a different plan. I got bit that way when I started my first business in 2001 after the dot com bubble. They might not like it that you’re using their money to fund your venture.

    My advice is to not give up on the job search until the business can keep you fed and housed. Don’t forget to keep lots of records demonstrating that you’re actively looking for work. On the bright side, if you need employees, your state might have some interesting programs to help you hire those new workers.

    Cheers and best of luck to anyone starting out on their own.

  2. Craig Says:
    February 16th, 2009 at 2:42 pm

    It’s all about planning. I think more people will start to be freelance workers and starts their own business that way. Seems like the hot trend for a lot of people and you have to do research into the market and see if their is potential before even getting started.

  3. David Says:
    February 16th, 2009 at 2:50 pm

    I like “identify your talents”, because it could show where you need help or where it might be a good idea to partner up with someone. One of your weaknesses might be their strength.

    I’d also extend it to “identify your passions”, as they’re cloely tied together.

  4. Steve Braun Says:
    February 16th, 2009 at 3:39 pm

    You had better pay attention to #4 and I’d add the following qualifier — be realistic. It’s so easy to project a fantasy world of your business taking off quickly and/or your nest egg lasting forever while you ramp up. Don’t kid yourself.

    #3 and #7 are related. If applicable, it is very important for your marriage that your family knows “how deep” and about the sacrifices it will take to succeed. On the other hand, if everyone in the family fully understands and grasps the difficulty of starting a business — and acted rationally — then there wouldn’t be any entrepreneurs! Be realistic but don’t be defeated by what appears to be an insurmountable task.

    I’d add a tenth item — Be prepared to network and market your business. Most of us are not “naturals” at marketing or selling. Yet effective networking, marketing, and sales skills are essential to your success. Business is not just going to walk in the door and drop in your lap. Know exactly how you are going to get customers/clients and have a detailed plan to do so.

  5. thomas Says:
    February 16th, 2009 at 7:11 pm

    can’t undervalue the planning portion of creating a business.

  6. Stacey Says:
    February 16th, 2009 at 10:06 pm

    Hire a great accountant!

  7. Grant Baldwin Says:
    February 17th, 2009 at 8:26 am

    I think we’re all big fans of entrepreneurship and starting your own gig.

    BUT…as this post indicates, you have to count the cost before starting the business. Make sure your ducks are in a row and you’ve thought through everything before making the leap.

    At that point if it all makes sense and it is the smart thing to do, make the leap and enjoy the journey.

    I know I have.

  8. Patrick Says:
    February 18th, 2009 at 7:50 pm

    When it all boils to it, you’ll learn who you really are until you try it!

  9. Janet Giacoma Says:
    February 19th, 2009 at 12:29 pm

    #3 and #4 are the biggest things to pay attention to and when you are comfortable with those, leap and leap big.

  10. Learn Stock Market Says:
    February 23rd, 2009 at 8:38 pm

    Planning is an important part before starting a new business. We should have enough funds and proper strategies to run our business successfully.