I made the entrepreneur leap at 35, pregnant and with a family to support. At 35, I was leaving behind a bigger paycheck than the more traditional 20-year-olds taking a bet on a start-up. Given that, it’s not very odd that one of the most common questions I hear is around how I actually made the decision to take the bold, risky leap to become an entrepreneur. For a professional with a high-paying job and a family to support, the uncertainty of a brand new start-up can be paralyzing. Here are the five questions any potential entrepreneur should consider:
Do you have a good business idea with a clear path to profitability? Having a good idea is important, but much more important is a good idea with a monetization plan and path to profitability. People tell me all the time that they wish they’d had my idea. Ideas are a dime a dozen. In reality, the idea is about 1% of it—the rest is hard work and execution. So have you figured out to how monetize your idea and stay afloat?
Do you have access to the capital required to get the business going? How much capital does your business require to get off the ground and do you realistically have access to that capital? Self-funding, bank loans, money raised from friends and family, “angel” and venture capital money: there are many options and you should have a clear understanding of which path is viable for you. For instance, banks are more likely to lend to traditional businesses (think dentist office or restaurant) than to an innovative, unproven start-up. So cross that one off the list if you have an unproven business. Venture capital and angel money is an option for high-growth companies. Know your options and assess the likelihood of raising the capital you need.
Do you believe in yourself? When 50 people tell you “no”, will you still believe in yourself and your ability to realize your start-up dream? When a single point of failure crops up, and it will, will you have the strength to navigate through it and the faith in your ability to do so? In these moments, the psychological stamina is just as important as anything else. Being an entrepreneur requires an utmost belief in yourself—both in your ability to weather the psychological storm, as well as the business acumen to make the right choices.
Do you have the tenacity? Many days, running a start-up, you will wake up and there will be more reasons to fail than to succeed. Do you have the tenacity to persevere through the really challenging, gut-wrenching moments when you are scrambling for cash or to meet payroll or to find that first lead investor in a round when you’ve already heard “no” 50 times? Founding a company is never boring—more like a roller coaster with extreme highs and lows.
Are you ready to make personal sacrifices? In the early years of building a start-up, you very well may get paid less than you made before, if at all. You may need to cut back on spending, have a spouse go back to work, cut your entertainment budget and/or use savings to get the business off the ground. In our first year of Little Passports, my sister used to send me Starbucks gift cards because my personal budget was so tight!
I love being an entrepreneur—it really is the best job I could dream up. So sit down and run through these questions, and hopefully they will lead you closer to making that leap.