Most people just take the plunge into the business world without some important considerations. This often results in a failed startup leaving the entrepreneur in ‘no man’s land’. This doesn’t have to be your situation; we provide 3 factors to consider before exiting paid employment.
Do your homework
Most startups fail because prospective entrepreneurs do not have a robust understanding of the market they intend to compete in. This sometimes brings disconnect between the intended value proposition and what the market really demands. This can prove fatal for a business. Entrepreneurs are advised to have an understanding of their market and the level of competitive activity in the industry. This does not guaranty success but it is definitely a step in the right direction.
Develop a business plan
A business plan isn’t just a business document, but a route map to commercial viability. Eugene Kleiner, a Venture Capitalist, puts it this way “Writing a business plan forces you into disciplined thinking, if you do an intellectually honest job. An idea may sound great, but when you put down all the details and numbers, it may fall apart.” A business plan helps you raise capital, sets strategy and manage the day to day implementation of the business strategy.
Raise the required capital
Lack of capital is one of the main hurdles to successful entrepreneurship. Rather than figuring out cash flow as you go along, it’s best to come up with realistic projections as part of your business plan before deciding whether you can afford to leave your job. Your business may not be profitable for three to five years, so it’s important to be realistic about how you’ll support yourself financially, says Sharon Lechter.
This article is part of a series of conversations around helping professionals in Nigeria make a seamless transition from paid employment to entrepreneurship. This subject will be discussed more extensively at the May 2017 Startit Academy, themed, Plot your Exit Strategy from Paid Employment. For more information about the event and registration, please click here.