Entrepreneurship is very in vogue today. Motivated by the wave of successful tech startups, the younger generations today all want to be their own boss and supersonic themselves into a life full of wealth and glamour. Television programs are furthering the allure of leaving corporate America and starting your own company in your family garage. The coolness factor for being an entrepreneur is probably at an all-time high. While I am an adamant supporter of entrepreneurship, I do have a responsibility to provide a dose of reality to anyone considering starting their own venture. Being an entrepreneur is not for the faint of heart and there are a lot of risks involved with becoming one. I would argue that most individuals are not equipped to be an entrepreneur. Most think they are, but in reality it is an anomaly.
Entrepreneurship is like space exploration. It is a personal journey of you against the universe. If you are successful, it is an unparalleled experience. However, if you fail then you can end up marooned and with space dementia.
The below is a sample checklist of questions to ask yourself before you take the plunge and leave corporate life.
Are you mentally equipped to be an entrepreneur?
This is the most important question. Your family, friends, investors, and colleagues, all can give you advice on if you should do a potential venture. However, it doesn’t matter at the end of the day what they say. What matters is if you are mentally equipped to be an entrepreneur. Is it in your DNA? How badly do you want this? You are the individual that will be putting everything on the line and will be in the trenches day in and day out. It isn’t their lives or careers that will be risked but yours.
Can you handle failure?
You will statistically fail. It is a fact. You might be the smartest and hardest working individual in the world, but it doesn’t matter. Darwinism gets the best of most startups and will always have the last laugh. A lot of top echelon individuals say that they can handle failure, but most haven’t ever really been tested in life. It is up to you to know thyself.
Why do you want to be an entrepreneur? Why specifically now?
You really have to dig deep and understand what is driving you. When the going gets tough, (and it will) you need to grasp something pure that will carry you throughout the night.
Are you willing to change your lifestyle?
No honorable entrepreneur maintains their corporate lifestyle when starting a business. If you try to maintain a lifestyle, you are wasting investors’ capital on frivolous non-business personal expenses and overall hurting your chances of success.
Are you prepared to potentially live in a lesser quality neighborhood? What about sell your car or downgrade? Are you going to give up traveling and eating at expensive restaurants? Will you care how society perceives you?
How will you financially survive? Savings? Salary?
Just as with a business, you need to calculate your “personal burn rate”. The stakes are much higher I would argue in the “real” world of entrepreneurship than being insulated in corporate bubble. You need to price in a complete failure from the beginning to understand what could be at stake. This does not mean that you have to have a pessimistic attitude, but that you have the ability to risk assess a situation.
What is your stop loss?
How far down the yellow brick road are you willing to go? Are you willing to sacrifice everything or X% of everything? What are your metrics for pulling the plug? Is it time or money? Specifically what? What business milestones do you need to achieve to keep being an entrepreneur?
Are you a high level thinker or a hands on type of person?
I would argue that entrepreneurship is not for the high level thinkerl but the doers of the world. Are you the type of individual that will get on your knees and fix something if it is not working? This is the real world here. Nothing should be beneath you, especially if you are a founder of a startup. There are no safety lines here, and you can’t simply call the tech department at your Fortune 500 company to get someone else to fix your problems.
Can you and your business survive for minimum 1 year?
If you don’t raise enough capital to modestly last 1 year then don’t even start the venture. Nothing gets done overnight, and it takes time to build, test, and rebuild ideas. Time, capital, your career, and personal relationships will only be impaired if you don’t have the resources necessary to out of the gate. If you put your toe into the deep end of the pool, you need to be ready to go the entire distance for at least 1 year.
Are there any significant stakeholders in your life that this can affect?
You might have everything teed up, but there could be stakeholders that you need to consider. A family could be a great support network or an anchor. It is up to you to properly discuss and analyze those variables.
Some sub questions to ask or consider are:
- Significant other: If you have a wife, is she the type that is ready to sacrifice a standard of living for this dream of yours? Is she the type that will stick it out with you? — I have seen a lot of situations where starting a business can cause a lot of internal stress on a relationship.
- Family: Do you have a family that you need to provide for? (kids, elderly parents, etc.) Will you be doing a lot of traveling? Is your family mentally prepared for that? Are you mentally prepared for this?
Therefore, these are just a sample of considerations to ask yourself before starting a company. You will probably learn more about yourself on this journey than by doing any other thing. Just make sure though that you know what you are getting yourself into. If you are ready to jump into the pilot’s seat then make sure you buckle up. Good luck, as it is going to be a kick-ass yet bumpy ride.
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