Have you had it with your 9 to 5? Stop dreading Monday mornings and start planning your exit from corporate America. Why not capitalize on the newness of the year and put together a solid plan to activate your dream of starting your own small business? It will take at least one year to break even before you can start trying to replace what you brought home in your paycheck. So, before you march into your boss' office and say "so long," increase your chances for success by crafting a detailed plan. Planning your small business while still working makes even more sense when you consider you need time to build up your savings to replace income so you'll have the option to become your own boss.
January is a perfect time to start a small business. You need to honestly evaluate your skills, network, discipline, niche, optimism and ability to be coachable to determine whether you're ready to start a new business. I highlight the Emerson Planning System in my book Become Your Own Boss in 12 Months to give you a roadmap for business success. Here's a breakdown of my six-step system to make the transition from employee to entrepreneurship.
- Develop a Life Plan First: You must first figure out what you want out of life, and then build a business that supports your vision. Too many people start businesses that are not good for them or their families. Your life plan should outline your financial, personal, learning and retirement goals. For example, you need to know up front how much money you need to make in order to be happy. Your personal goals will play a role in just about every decision you make in your business. Decisions relating to how you structure your life and your business. Will you take on a partner? Will you try to pursue investors? Do you want to have one great store or a build a chain? All of these decisions must be measured against your big picture goals for your life.
- Launch Your Business While You Are Working: Ninety percent of all small businesses get business from referrals, which means the person in the cubicle next to you is likely your first customer or first referral source. Take the next twelve months to build and reconnect with your network, research your target customer, and make sure you define how you will be different in the marketplace.
- Get Your Money Together: The money to start your business will come from your personal savings. Your ability to save has everything to do with your ability to become your own boss. Before quitting your job, I suggest planning your exit for at least 12 months. You should try to save 20-40% of every paycheck and start living on a budget. Try to raise your credit score to 750 or higher. Eliminate as much debt as possible. Starting a business while carrying a bunch of credit card debt will put a lot of pressure on you. Take care of your money so that you can go without a paycheck for a year or two, fund your first year of working capital and have an emergency account for your household.
- Examine Your Skills: Look at what skills you have and what skills you need to run your particular business. Be honest when making your list of skills. If you are not sure about them, ask three people close to you what they think are your best skills. You might be surprised by their responses. Update your computer skills while you are still working; particularly start working on your social media skills. You can always grab a copy of my ebook How to Become a Social Media Ninja to give you a head start. You might also want to learn accounting software or Adobe Photoshop to help with things you'll need to manage in your business.
- Who's Your Paying Customer? As you are making a go/no go decision about your new business idea, think about these two questions: Who are your customers, and why will they buy from you? You must identify a niche customer. As you are starting in business, you will have limited time and limited resources. I suggest you develop a marketing plan before the business plan to make sure there is a viable market for your product or service. If you can't answer these questions, then you need to go back to the drawing board and come up with another business idea.
- Develop Your Business Plan: You must plan for success; it will not just happen to you. You need to write a business plan, so that you can think through how you are going to run your business. It is very helpful to think through what happens when a sale is made and how many sales you will generate each month to meet your revenue goals. Don't be one of those business owners who spend more time working on their logo than on developing a business plan. Use business plan software such as www.enloop.com to get started. Then, enroll in a business plan course to finish it. Check out www.bplans.com for hundreds of sample business plans that you can review for free. Don't forget to use your business plan to run your business; in fact, it should be updated every 2-3 months to make sure your business is on the right track.
To navigate the learning curve of starting a business, it's best to implement your plan while you are still working, if you have that option. You must plan for success otherwise becoming your own boss, could become nightmare.
Are you starting a small business this year? What part of the planning process holds you back?
This was originally published under the title: January Is the Perfect Time to Become Your Own Boss at www.succeedasyourownboss.com
Melinda F. Emerson, known to many as SmallBizLady is one of America's leading small business experts. As CEO of Quintessence Multimedia, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. Forbes magazine named her #1 woman for entrepreneurs to follow on Twitter. She writes a weekly column for the New York Times, and hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for today's entrepreneurs. She also publishes a resource blog. Melinda is also bestseller author of Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works and the ebook How To Become a Social Media Ninja: 101 Ways to Dominate Your Competition Online.