10 Crucial Steps Before You Move From Employee To Becoming an Entrepreneur
Are you toying with the idea of transitioning from being an employee to becoming an entrepreneur? Do you want to take the risk and be your own boss? Are you tired of helping other people grow their own businesses, and you want to become and entrepreneur yourself? I know the feeling. But before you rush out and make the switch, read on.
A friend of mine struck out and tried to start a business of his own a couple years ago. He was not prepared for the harshness that greeted him when he stepped out and decided to become an entrepreneur. He flopped spectacularly and lost almost all of his savings too.
This is the story of so many other people who have tried to do the same.
Trying to start a business has destroyed many people in the past, but this is not to say that it is unadvisable to start your own business. Most startup failures occur because the person did not adequately prepare for the ‘becoming an entrepreneur’ scene.
Preparing to transition from being an employee to becoming an entrepreneur takes more than just having a good idea that you think will sell. It requires massive forethought, mindset shift and putting the things you need in place. If you want to be successful in starting a business, there is a lot you need to do starting from when you are still an employee.
The transition from employee to entrepreneurship will be kind to you if you follow these steps below:
One of the things people are least prepared for is the huge change they experience when transitioning from employee to becoming an entrepreneur or a business owner. Once you become an entrepreneur, the feeling of security you had as an employee disappears.
This is because you suddenly find yourself in charge of everything and solely responsible for the success or failure of the business. This can strike fear into many people and is the major reason why many startups fail.
You have to start to prepare for this massive change while you are still on someone else’s books.
- Prepare to NOT have a fixed work timetable as you will need to be working round the clock – sometimes more mentally than physically.
- Prepare to love numbers – so you can always keep track of your sales, costs, profits and loss.
- And be prepared to make being uncomfortable your new comfort zone as you will constantly be taking risks.
In short, come to terms with working on a business and not in it.
2. Determine what you’d like to do
The next step would be to determine the industry you will like to plunge into. And as you determine that, specify the niche you want to go into. While making this decision, make sure that you are considering the skill set you already possess. Also make sure it is something that you love doing – or as close to it as possible.
For instance, when I finally took that decision to quit the 9-5 life and become an entrepreneur, I decided to go into the fast moving consumer goods (FMCG) line. And when I decided to start my first online business, I chose to go into the business development consultancy and personal development line. And I went further to delve into the startup niche.
First of all, I had some experience in the art of running and building successful startups. I am a skilled writer and speaker, and I love writing and coaching. So, MSC was born.
If you do not love what you are doing, you will be miserable even if you are seeing profit. This is very important, since being miserable is most likely the reason that you want to transition from being an employee to become an entrepreneur.
Next is to decide exactly what product or service you will like to deliver in your business. If you did not necessarily hate what you are doing in your current job, you can offer the same service when you kick-start your own business. Otherwise, think of something else, maybe even come up with a unique product or service.
3. Find out if your idea will sell
Your product or service idea may fill you with joy but this is no guarantee that the idea will fly in the market. You first have to find out if it addresses a problem that people need a solution to.
Talk to people who are ideal potential customers to find out their wants and needs and how your product or service will help meet these needs. Doing this at this stage will ensure that you will create something that they will be willing to buy.
While at it, you should also ask them how much they would be willing to pay for your product or service. This will help you decide if you have a viable business opportunity on your hands.
4. Draw up a business plan
The next logical step is to come up with a business plan for your intended business. Starting your own business without a plan is akin to groping around in a dark room. You will bump into tables and chairs and hurt yourself in the process.
A business plan serves as a guide to every subsequent decision you will make in your business. It is your action plan as it details how you want your business to function. This is the point where you get to choose your business name, define your vision and objectives, specify who your target market is, draw up a failure-proof marketing strategy, define what your products and service will be, etc.
You do not need to draw up some bulky 40-page document or to make it super formal. It just needs to cover all the essentials that your business needs to kick off such as business structure, operating costs, delivery systems and expansion plans.
5. Save up
It is more difficult for startups to get funding from venture capitalists or loan from banks than it is for already established businesses. The best and safest route for you to take is stacking up your own capital. And please don’t even begin to think of taking a short term business loan. At least, not unless it is your last option.
It will be a dumb move to quit your job while you still desperately need the financial security coming from it.
DO NOT quit your job until you absolutely have to. Stay on the company books as long as is necessary so that you can build up capital to run your business until it attains stability.
6. Fine tune your product or service
Until you are ready to transition fully from being an employee to becoming an entrepreneur, your product or service is a rough draft.
Test your product or service while still working your day job. This way you are under no financial risk as you test your ideas, garner your first customers and check if your business will stand the test of time.
Your customer feedback at this point will help you determine what part of your ideas to shed and what parts to improve on. You might need to do this severally until you have a final product or service that will adequately satisfies the need.
7. Assemble a team if you think you need one
Now that you know that there is a willing market out there for your business idea, you need to start thinking seriously about your startup’s future. Depending on the size and financial strength of your business and your personal experience, you may need to hire people to help with marketing, finance, manufacturing and customer service.
Remember, at this point it would not be much of a financial burden since you are still working your day job.
8. Secure external financing if necessary
Are your business aspirations larger than your businesses’ current financial strength can handle?
Now would be the time to seek for investors and raise capital for your business.
But I should note here that seeking help from venture capitalists or other outside source must be done only if it is absolutely necessary. If you do not absolutely need it, DO NOT ask for it.
On a brighter note, your startup has built up some traction and so stands a better chance of obtaining funding. This is because the investors will see their contribution as more of an investment in an already working business than a loan.
9. Scale up your business accordingly
Finally! Your time is yours and yours alone.
You have become an entrepreneur – and you are on your way to becoming a successful one!
Do not mistake this to mean that you can rest, because this is where the real work starts. Now is the time to work all the plans you have for the business and to focus on scaling it up. Of course, your plans should be flexible such that they can adapt to changing market conditions.
10. Quit your job
Your business is in a really good place right now. You can finally heave a sigh of relief and do that thing you have been planning to do since the idea of starting a business popped into your head.
Yes, you can quit your job at this point. No point staying on their payroll as it would now be more of a hindrance than a crutch. You need all the time you have to work on your business.
Make sure you give at least a forthnight’s notice to your boss, so that you do not leave a bad impression in his mind and that of your colleagues. The idea is to quit as graciously as possible while still maintaining the relationships you cultivated during your time there.
You never know where you will meet them later. Who knows there might even be potential customers among them that you have not discovered yet.
Do you have a successful transition story for us? Or did you go through a bitter experience? If so, what did you learn from it?
Share with us in the comment section below and let us learn from your experiences.
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