Most aspiring entrepreneurs I know are just waiting for that unique idea to strike them that will kickstart their new venture, put them in control of their lifestyle, achieve financial independence, and maybe even change the world. Unfortunately, these goals are often mutually exclusive, and focusing on the wrong ones won’t bring you that business success and satisfaction you crave.
Thus, in my role as mentor to young entrepreneurs, I always recommend that you first take a hard look at your own values and priorities, before jumping into any new startup, as the founder, or even as a side hustle. Here is my list of key questions to ask yourself, to best route your passions to a business that will bring you more visibility and respect than pain:
- When is the best time to embark on this journey? Timing is critical for every startup. I know too many who have failed due to pending family commitments, lack of preparation, or health failure. Of course, if you wait for the perfect time, you may never start. I do first recommend getting some business experience, building relationships, and managing risk.
Some advisors recommend that the best time for a startup is immediately after academic studies, or even earlier, but I find that real business experience, perhaps many years in business, is the best education on the realities of business, current tools, and processes.
- Should I start out alone, or assemble a team first? For me, the acid test of a leader and an idea is whether you can convince other people, and perhaps a co-founder, to join you in your quest. A business is never a solo operation. You need complementary skills for marketing, financials, and operations. If you find no takers, you may not have a future.
- Is monetary return or helping others your priority? Only you know whether you can find passion in creating the next Amazon or bringing joy to people who are suffering. I often hear that the people who have made a lot of money are still not happy, and wish they had taken a different path. Think twice before committing to a business that is work.
A winning strategy today is to combine these objectives, by committing a portion of your profits for a higher cause. For example, TOMS shoes agreed to donate a pair of shoes to the needy for every pair sold. The return was far greater than the cost of donated shoes.
- Do I rely on my own resources or seek investors? Bootstrapping is always a great alternative since you can retain full ownership and make all your own decisions. Yet, I find that most of us don’t have the financials for that option, so we must share the equity, control, and reward, and rely on funding from family, friends, and professional investors.
- How do I assign responsibilities and compensation? Usually, people who are capable and willing to join a startup, especially for a key role, expect to be given a big title and real equity, if not top cash compensation. It takes real work and skill on your part to recruit the right people to the right roles. Friends and family should not be your solution.
- Would I prefer a local business or global enterprise? If your comfort level is local, and you don’t like too much complexity, then a small successful business will serve you well. If your goal is to compete with Jeff Bezos, then be prepared to manage thousands of locations and employees around the world, with all the issues to get exponential growth.
- What do you see as your legacy and exit strategy? Some people like the challenges of building a product and starting a company, then doing it again, while others look forward to scaling the business and driving a worldwide public enterprise. Your legacy may be that of a serial entrepreneur, or an industry giant and a worldwide leader.
For example, Richard Branson relishes the satisfaction of initiating innovative startups, and rewarding strong team members with the opportunity to run a joint spinoff. His Virgin Group now encompasses over 400 companies, and his legacy as a leader is assured.
Not recognizing these dilemmas early has cost many an entrepreneur his sanity, as well as his business. We all have strengths and weaknesses and are driven by different values and expectations. Only you can turn these questions and related decisions into your competitive edge, as well as satisfying results. It’s easier to set your direction early than to change it later.