You've climbed the corporate ladder and made a comfortable life as an executive, but you still want more. You have ideas to share with the world and think you might be ready to strike out on your own as an entrepreneur. But, how can you be sure?
Media romanticizes about the possibilities when starting your own business -- rapid growth, large valuations, and becoming a member of the "inner circle" in business. It all sounds so empowering.
While it can pay off, it's not the way it looks on TV. Becoming an entrepreneur isn't for everyone, and even if it's right for you, you should wait until you're in the right circumstance before you make the big move.
I recently chatted with Inderpal Singh, founder of strategy and technology consulting firm Northshore Partners and the Launch & Lead network, to learn his take on how to determine whether it's the right time to leave your executive job and start your own business. As someone who left Microsoft and McKinsey & Co. to successfully start his own firm, he recommends exploring the following questions:
1. What's your number?
Being an entrepreneur is much more financially risky than what you're used to in a comfortable executive position. Often, it's months or even years before you see any revenue or profit.
"You really have to be on top of your finances, know exactly how much you spend each month, then decide how many months of resources you need in the bank to feel secure," Singh said.
Additionally, consider the amount of money you need to put into your business each month, including office space, marketing, and services like Internet and phone. Don't forget to add some emergency money for unforeseen events each month, and you've got your "number," as Singh calls it.
2. Are you willing to leave behind corporate camaraderie?
Part of the fun of working at a corporation is being a part of a team and making big decisions together. But, striking out on your own can be lonely. You don't just miss out on things like watercooler talk and interpersonal connection; you miss out on the intellectual and thought partnership that like-minded colleagues offer.
"You're shifting from being a part of an elite team, which helps define you as a professional, to being on your own," Singh said. "Without that camaraderie, it's easy to lose your sense of self."
If and when you decide to make the move, invest in a professional peer group to help fill that void and give you a sense of belonging on a team. For instance, you could join the Young Entrepreneur Council.
3. Will you mitigate risks or go all in?
There are two ways to make the leap, according to Singh: either throw caution to the wind or methodically plan the transition. Which path is better? Obviously, careful planning and strategy sounds like a clear winner, but Singh notes that some do thrive better under the pressure of having to make things work without a safety net.
"Some people need to jump off the boat and light it on fire in order to be motivated enough to get things done -- and that works for them," Singh said. "It depends on your personality. But I generally recommend being more methodical, especially when you have regular commitments, like family."
4. What's your plan?
First and foremost, set out a strategic vision. Knowing what you're offering the market is great, but if you don't have a vision for how you want to achieve success, you won't sustain traction and growth.
The most essential parts of your plan are your timeline, financing strategy, and determining your product or service's market fit.
Many new entrepreneurs focus too much on marketing in their business plans. "Don't spend 90 percent of your time planning before you make the leap," said Singh. "Spend more like 30 percent of your time planning, and the other 70 percent testing."
Your focus shouldn't be entirely on a theoretical business plan, but instead, testing the idea. You can't really validate your idea until you offer your product or service to people and see how they react.
5. Do you have a support system?
Entrepreneurship serves as a proving ground -- you're really going to test yourself, probably beyond what you thought your pain threshold was. You need an outlet to talk through ideas and help you through the difficult times.
Singh recommends finding a mentor or former colleague with a similar background who's made the switch -- and perhaps building a network of several entrepreneurs with whom you can regularly interact and engage. They'll understand the issues you're dealing with and be able to offer the support and insight you need to stay positive.
When Singh first started his consulting firm, he connected with a number of McKinsey & Co. and management consulting firm alumni who had also started their own consulting firms. These connections resulted in valuable guidance and camaraderie. Not only did they bounce thoughts and ideas off each other, but they also collaborated and worked on strategy projects together.
No entrepreneur should go at it alone. You need trusted confidants off whom you can bounce ideas. And sometimes you just need a friend who has been through similar situations to disrupt a bad state-of-mind.
6. Why does what you're selling matter and who will buy it?
The market changes constantly and is unpredictable. You might think your idea will work and you know what your audience wants, but you should never define this based on your intuition or even a past experience.
The key to truly understanding the market is getting out there and testing, Singh explains. It's called rapid prototyping. Build a basic, working prototype of your product, service, whatever, and get it in front of the people you want to use it.
Singh notes it's important you validate your idea through actual sales, rather than through people who say it's a great idea. Then, constantly take the pulse of the market and tweak your idea until you've found your niche in the market.
If your idea is struggling to take off, listen to what people tell you. Why aren't they interested? What makes them hesitate? Learn to be persistent in the face of setbacks -- and if you find you've lost motivation after tweaking your idea over and over again, entrepreneurship might not be for you.
Once you've determined if you have the right mindset, resources, and plan to see your business idea through to success, you'll know if it's time to make your move. Remember, don't go at it alone. Surround yourself with a strong network of friends and professionals who can provide you with the support you need.
Are you ready to make the big move and start your own business? Let me know your thoughts.