7 Tips for Making a Successful Transition to Entrepreneurship 

My career has afforded me the opportunity to work with over one hundred franchisees, many of whom are first time business owners.  Through these relationships I have learned a lot about the “must do’s” and “try to avoids” of small business ownership, while gleaning some valuable insight about how to make the entrepreneurial experience less daunting and overwhelming – mostly via thorough planning.

Here are my tips for things to think through before taking the plunge to start your own business:

Be Clear About What You Want to Achieve
Many people view entrepreneurship as the path to personal freedom and wealth creation.  It can be; however freedom and wealth do not look the same for everyone. In addition to defining what your business will do, it’s important to consider what you need it to generate in order for you to consider it a success on your terms.

Be Realistic About What You Need to Survive
Assess your current financial situation and the obligations you have for the next few years.  Your business may not generate much – or any – income during the first few years.  Ensure that you have enough money saved to cover your basic needs and account for potential financial setbacks.  A “scrappy” entrepreneurial mindset will help you maneuver your new reality, but having enough cash to prevent you from worrying about covering the basics will free up mental energy that you can use to focus on your business.

Be Honest about your Lifestyle
Ask yourself hard questions about what you are willing to sacrifice and what things in your life are non-negotiable.  The first few years of business ownership may require you to cut back in certain areas of your life in order to stick to your budget.  Are you prepared to scale back your lifestyle in order to help your business become profitable?

Develop a Support System With Other Entrepreneurs
Being an entrepreneur can be lonely, especially in the beginning when you may be your only employee.  Also you will likely work non-traditional hours, making it harder to see your friends and family as often as you once did. Be intentional about forming a support group because it won’t be as easy to meet people who will understand the challenges you face as an entrepreneur. Consider joining existing networking groups (try Femfessionals or Walker’s Legacy) as a way to meet and befriend other like-minded women.

Make a Plan
If you’re finding it harder and harder to silence your entrepreneurial dreams, make a plan to bring that goal to fruition. Develop a budget that will enable you to survive without your steady paycheck.  Start working on your business plan in your spare time.  Develop skill sets that will make you a better leader.  Do as much planning while you still have a paycheck, but set a target date to take the leap and become an entrepreneur.

Get Some Experience in your Field
If your entrepreneurial goal involves starting a business is in a field in which you lack expertise, try testing the water before jumping in feet first.  Consider working part time in your new field or taking classes with the goal of affirming that your business idea translates into something that you would actually enjoy doing for work.  Also reach out to people who already work in the field and use their perspectives to help guide your business strategy and avoid pitfalls.

Have an Exit Strategy
It may sound pessimistic to think about exit strategies before you start your business, but it’s a prudent consideration.  The endgame will determine a lot about how you manage your asset over the years.  If your goal is to sell your business within a certain period of time, then you will need to manage your bottom line closely and build a solid team to maximize your eventual selling price.  Always be aware of your breakeven point and what debt you owe.   Set your business goals and exit strategy around what your business can deliver, and what you need to get as a return.