KNOW THYSELF

The pandemic and its ensuing macro and micro economic shocks have brought about the interest by many people to start their own company.

Being an angel investor who enjoys investing in and coaching startups, I spent a good amount of time in the past 6 months listening to new would-be entrepreneurs.  Listening and asking the right questions, gave me an incredible insight into some common areas of concern.

I realized that most newly minted entrepreneurs are so concerned with the validity of their new business idea, that they neglect a very important, essential I believe, area: the impact that the decision to start a company will have on their personal lives and their level of wellbeing.

I would be remiss if I did not share with you the questions to ask in my preferred Socratic style, which prompts reflection and analysis.  Here are the questions that are vital to ensure that there is a personality and lifestyle fit between the business idea and the business owner.

1. What do I consider a successful outcome?Will your business be a hobby, a lifestyle or a multimillion dollar business?  Define the goal of the start, or you may end up pursuing something that does not make sense for you and the people involved.
2. What kind of lifestyle do you envision living in 10 years?Do you see yourself traveling a lot for business?  For pleasure?  Do you want to be involved in your children’s activities and education?  The kind of business you choose will determine the kind of life you will live.
3. Do you have the 5 to 10 year stamina and enthusiasm it will take to build your business?From the ideation stage (where most of the enthusiasm resides) to the implementation and scaling (where most of the work and effort resides) it may take 5 to 10 years.  Do a serious self-analysis of how you handled projects in the past: do you persevere or tend to go sideways when the going gets tough?
4. Do I have the skills needed to for this kind of work?Are my strengths and weaknesses aligned to the sector?  What are my strengths and what are my areas of weakness?  This analysis will tell you what skills you will need to hire to be successful.
5. Can my business be profitable?Account for all costs involved in making a prototype, getting a market validation, for marketing expenses, sales strategies, admin costs and everything else needed to establish a profitable price for your product or service.  Do not underestimate the time you will need to invest.
6. Do I have clear values that I want to be aligned to the business?Will they impact profitability?  How?  Am I prepared to compromise my values for profit?
7. Am I the first in the field?If yes, why? Is there a market?  If other people have tried it, how did it go for them?  What can I learn from their experiences?
8. How much time, effort and money am I willing to invest and am I ready to lose if things go badly?
9. What are the competences and experience I need now?Are they available to outsource and at what price?
10. Am I able and ready to spend a lot of time alone?Is my personality fit for such strain, loneliness and pressure?
11. Are there any unintended benefits to starting the business even if it will not go as planned?

Honest answers, a good self-audit and the subsequent analysis of the results will most definitely help.  It is a worthwhile exercise that can make the difference when making such an important and life changing decision as starting a business.

Most importantly, once you have the answers, they can become part of your story telling, such an appealing area that most investors really value.

A good decision is almost never a quick one, take your time, I promise that carefully considering all the pros and cons will give you an incredible insight into your strengths and at the same time it may save you and your loved ones a lot of stress, grief and resentment!