Dream of quitting the rat race and becoming your own boss? Better read this list first. According to the U.S. Small Business Administration, 50% of all new businesses fail in the first five years – probably because they didn’t have one of these essential seven items.
1. A successful business.
Wait, what? You’re supposed to have a business before you start a business? If you plan on quitting your job to go into business full-time, yes. You need to give your small business at least a year of part-time work in the evenings and on weekends while you keep your current job. This will tell you two things: first, whether anyone wants to buy what you’re selling; and second, whether you’re really prepared to handle the day-in and day-out work of running a business.
2. A good tax advisor.
Once you start a small business, everything about your taxes changes. Hire yourself a tax adviser, because otherwise you are going to get pummeled by the complicated rules and regulations. If your business isn’t making enough profits to afford a tax adviser, you’re not ready to quit your job and go into business full-time.
3. Business-level computer security.
Once your home laptop becomes the hub from which you earn your livelihood, you need to do everything in your power to keep it safe. This means you need a bit more security than the typical virus protection software provides — and you need to start learning how to translate business-level (or “enterprise-level”) computer security jargon. You need to know that virtual infrastructure security, for example, goes deep to protect your business from server breaches, including cloud server errors. Security experts at Trend Micro insist that’s a must-have, especially if you’ve got a lot of sensitive customer information stored in a spreadsheet somewhere.
4. A strong work ethic.
Some people think that going into business for themselves means they won’t have to work as hard. Completely the opposite. If you want to start a business to escape a 60-hour/week corporate job, be aware that you will be putting those same 60 hours — and more — into your business.
5. A love of administrata.
Let’s say you love knitting adorable dog sweaters, and you want to start a business so you can create and sell those dog sweaters full time. Be prepared to spend 80% of your time handling business administrata, including updating your records, ensuring you are compliant with local and state regulations, and doing the administrative work of seeking out new opportunities to promote and market your business. Another 10% will be marketing and customer management work. You’ll have 10% of your time left over to knit those fuzzy little sweaters. This type of administrative balance exists in every small business, regardless of the actual product you’re selling, so be prepared.
6. Delegation skills.
Part of being your own boss is knowing how to delegate. Know when to take on a consultant, when to hire your first part-time staff member, and how to delegate tasks without feeling like you’re losing control of your business. Here’s a list of 132 tasks that you can delegate. It’s also a good reminder that running a small business means managing all 132 of these tasks, every day.
7. A long-term vision and plan.
When you cut the cord and start running your own business, you need a long-term vision and a detailed action plan. You need to know exactly where you want your business to be in five years, and how to get there. You need to have a plan for what happens if you go into debt, what happens if you can’t pay your rent, and what happens if you get more customers than you can handle.
Planning and vision are, ultimately, the two keys to small business success — though you’ll need all seven items on this list to create a business that lasts.