So you want a business?

The headwind of the downturn has created; in unprecedented numbers, an abundance of newly unemployed people. Most of these people have had very successful careers in the past and fortunately, many were smart enough to have put away sizable savings over the years. However, as months pass, many are recognising that the job search is lengthy and the opportunities few. Those who were fortunate enough to have a redundancy package are seeing that source of income winding down and those who are without are seeing their savings dwindle each month.

This set of circumstances is leading people to look at alternatives to traditional employment with “Owning my own business” becoming more attractive. Past success, ready capital and the widely-held dream of “One day being my own boss” team up to make this route seem very attractive; becoming more so each day that passes without  any response to the many calls they have made or the many CV’s they have sent out. Increasing numbers of people in this situation are now thinking: “Well, nothing else is happening. I guess I should look at having my own business”.

However, theses very circumstances that lead these people to self employment should be at least a caution flag for the following the Warning signs:

They “know” what they want. They say they want a coffee shop, a consulting business, a cafe; restaurant or maybe a bar or any number of other opportunities.

They are supremely confident. Put very simply, if they are not scared, they don’t know enough.

Remember, these are all very successful people. People who are over-confident tend to do less due diligence [“I understand business!”], are more likely to ignore a successful business model [“I know a better way!”] and will almost always downplay how hard it will be [“If it normally takes 5 appointments to make a sale, I know I can do it in 3!”] .

Money is no object. Obviously, if they have always succeeded, they cannot imagine their money running out. They have made money and are proud of it. The cost of an opportunity takes on too little importance, since they know they will succeed.

The only antidote for those who exhibit these signs is education and perhaps the only way to drive that point home is to politely begin making them aware of what they don’t know. The list of questions we can raise is limitless but such basic things as:

• “How well is that type of business holding up in this economy?”
• “What will be your total investment including working capital?”
• “How many people in that business have you talked with?”
• “How does the lifestyle inherent with this business match with what you and your family want?”

Fail to plan and you plan to fail

People should be saying: “I’ve investigated and I have found I can afford it, the lifestyle it provides seems to coincide with what I want for me and my family and I feel it gives me the opportunity to use my business and personal skills to good advantage”.  Lacking the response, we need to patiently and politely lead them into a process of education; a process that gets them to document exactly what they are trying to achieve, both personally and professionally, and then, once that is done, do a careful search for opportunities that are proven to truly provide those core values.