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Are you fit to run your own business?

There are many reasons and circumstances for someone running and owning a business. Of the clients we work with the reasons for doing so vary from it being a long-held ambition, the result of redundancy, a bright idea, the challenge of ‘doing it better than the current boss’ and a multitude of other, often personal, reasons.

We use the phrase ‘running and owning’ to emphasise the twin aspects of being an owner manager. Ownership can be passive, although usually not for smaller companies, whilst running a business is very active. Both aspects generate demands and pressures and both create the opportunity for reward.

In considering a new business venture sometimes you just need to act and sort out the implications later as you may have a short period of time to decide whether to go for it. Considerations about your own suitability to be an owner manager may be relegated to the future. In an ideal world the considerations about setting up a new business should be as much about your own suitability as the product, the market, the brand, the cash flow or the supply chain etc.

Here are five points to consider when contemplating the prospects of starting a new business. These are also useful as occasional checks on progress once you are up and running. Even some considerable time into your new venture it is sensible to take a look at how you are doing. The business may be growing and revenues climbing but if you are feeling out of sorts one or more of these points could be the cause. The good news is if the business is performing well these are much easier to address with a little independent support.

Related: The seven qualities you will want from your adviser

  1. Can you manage the financial implications for you and your family? Business ownership is usually undertaken to advance your own financial prospects and provide a better and more secure future for those close to you. The key word is ‘future’ as for most new owners the short-term is characterised by lower income, higher commitments and possibly personal guarantees on a business loan. Any good adviser will help you model the cash requirements for a new business and then repeatedly challenge you with ‘what if?’ questions – both on the upsides and downsides.
  2. How do you cope with working and making decisions alone? There is plenty of evidence that one of the main reasons for early life failure of a new business is not the product or service nor the financial performance but the ‘loneliness’ of business ownership – especially compared to a previous corporate role. In reality there are plenty of people around you – clients, suppliers, team members, for example – the problem is having the confidence to share your thoughts, feeling and ideas when you are fixated by your perception that being the boss must mean you have the vision, the capabilities and the answers to succeed.Related: Is there a gap in your management team?
  3. How good are you at building and developing a team? Along with managing cash flow and prioritising your time the biggest frustration for owner managers is in recruiting, developing and retaining a high performance team. The frustrations are borne out of how long it takes to recruit, misjudgements based on a poor selection process and impatience with new recruits who you expect to deliver very quickly. You may perceive people to be expensive but recruitment mistakes are very costly so get some help, always have a second opinion and plan for success by recognising that while training is necessary ongoing coaching and good leadership are equally important.
  4. What is your appetite for multi-tasking? In the immediate post start-up period you will quickly realise that there are many business activities to undertake to keep the business running, often necessitating you learn new skills for example bookkeeping, marketing, selling, etc. Understanding and controlling these activities is fine but spending too much time on them and diverting you from your core strengths is a mistake. There are plenty of low commitment and low cost ways to get these activities done by specialists.Related: A little help goes a long way: five things to outsource now
  5. How resilient and determined are you when the going gets tough? And it will. If you have a business plan with revenue and growth targets the graph may look deceptively smooth – but also unrepresentative of what will happen. You will have successes with new sales and you will have set backs with a client loss or a failed supplier. How good are you at looking for the positives and seeing the upsides without deceiving yourself if there are real problems? One of the valuable attributes of a good adviser is to help you see the real picture and to provide a smoothing effect so the ups do not get out of hand and the downs are treated pragmatically and quickly.

Owning and running a business is a fantastic experience and one we have undertaken since we started in 2003. Preparing yourself for the race and creating the conditions to win involve getting yourself into the best possible frame of mind as well as having a great business idea. Good coaching support has helped many business owners over the years and the earlier you get the support the greater your chances of success.

To explore this further contact us today.

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We have talked to other business owners and they are taken aback that we forecast our revenues, costs and cash flow

Meret Maynard
Outspoken Projects

Downloads

We’ve written a number of guides on selected business subjects that will set you and your business in good stead for whatever future you may choose.

These are free for you to download and to make use of in your business, so please help yourself.