It’s time to grab a notebook and pen or pencil and start jotting down the thoughts that are going through your mind about your new business venture. I do strongly suggest that you do physically write down your ideas rather than typing them on an electronic device. Research has shown that the act of writing by hand leads to better retention of ideas. And, if you are like me, you love a high quality note book combined with a fountain pen. There is something deeply satisfying about liquid ink gliding over smooth paper. But then I know I am a bit of a throw back.
- Consult your spouse, partner, or significant other. You may be planning a second career but your partner maybe dreaming of lazy days at the beach, lake or even home. Take the time to discuss your plans and reach an agreement between the two of you of what is going to work. As a generation we are living longer so the additional income you generate will certainly extend your retirement savings. Maybe you need to scale back your plans, work fewer hours so time remains available for joint activities.
- What is your passion? And is it a viable business proposition? It’s a truism of business that you can only sell what the client wants to buy. But there is usually a niche opportunity for most business propositions. If it is very niche market the potential client base will be small.
- Decide on your objectives for your new business How much time do you want to commit to your business? Is this a full-time career? Part time? A weekend/evening gig? There is no right or wrong answer to this question and it may change overtime. How much money do you want, or need, to earn? Is the balance realistic? You do not want to launch a business where you hoped to work 4 hours a day, to find you are working 70 hours a week to achieve your income objectives
- How much money do you expect to invest in my business? Are you going to use the skills and knowledge you already possess? Or are going to spend heavily on getting accreditations? If so, will this be funded by money you already have on hand? Or is the business expected to generate the cash needed?
- How do want to position your business in the marketplace. Do you see yourself as charging premium prices? Will your prices be closer the local market rates? Or do you plan on giving back by working for charities, local organizations etc. at discounted rates?
- What pricing strategy will you adopt? You could charge anything from the maximum the market will bear, to the minimum you need to survive. Anything in between is positioning. For now this is not a deep dive but a general idea of what makes sense for you. Keep in mind it also has to make sense for your potential clients.
- How are you going to differentiate yourself? According to Dorie Clark, globally there are 53,000 coaches. The field for consultants is even more crowded with Inc Magazine claiming there are 700,000 consulting firms globally. Although Inc does not say I assume firms range from the global giants such as McKinsey, Accenture to the one person solopreneurs.
- What is your risk profile? Many folks equal entrepreneurship with high risk. But this does not need to be the case. Yes it is unlikely that you will become a unicorn without taking some high or extreme risks. But that is not the theme of this site. Especially if you are starting out later in life you will probably prefer a lower risk profile, after all we do not have much more runway left to fail and start again. And banks are not likely to see us as ideal borrowers. Decide how much you can afford to lose, build your plans around that number, and stick to it.
- How long before you need to start generating income? Do you need income almost from day 1? Or can you wait a few months or longer before you begin to feel the strain.
- What is your time line to re-evaluate your decision? You have to give your plan time to work.