Q: How will I know if the time is right to start a small business?
A: A recent poll indicates that small business optimism is at an all-time high. That’s consistent with what we’re seeing at the Small Business Development Center, where we have a surge of first-time entrepreneurs seeking startup advice.
The most common reason I hear for starting a business is: “I want to be my own boss.” I get it, but that’s not enough.
In fact, it’s not even realistic. Your customer will now be your boss. While they don’t sign your paycheck, they nevertheless pay the bills. If you are looking to reduce your stress, a startup is probably not the right place.
Another motivator is to make a lot of money. While it’s possible, it’s not likely in the near term.
Wealthy entrepreneurs are often portrayed in the media. But that type of monetary success is not typical — that’s why they make the news. It’s not unusual for a “successful” owner to draw no salary for a year or two until the business finds its footing.
But there are encouraging signs, too. Many would-be entrepreneurs think they need to wait for a brilliant new idea. That’s not necessarily the case.
A few years ago, a study was done examining the Inc. 500 fastest-growing private companies. They found that only a very small portion of them, fewer than 10 percent, were revolutionary ideas. Most were just better, faster or cheaper versions of businesses that came before. So you don’t have to be the next Bill Gates or Steve Jobs to have a successful startup.
Having previous experience in the business is not a showstopper, either. The study also indicated that fewer than half of the 500 CEOs had previous experience in their industry, though most did have some sort of startup experience.
And it’s not a matter of having deep pockets. More than half of the 500 CEOs launched their companies with less than $10,000.
My best advice is to keep your day job while you try out your idea on the side.
But if that’s not possible, give it a go, work hard and keep your expectations within reason. Conditions are good, and successful businesses start every day.
Mike Ryan is the director of the Small Business Development Center within the Schulze School of Entrepreneurship at the University of St. Thomas Opus College of Business