3 Reasons you should NOT start a new business

If you are reading this, then I will assume you are interested in starting your own business or you are actually doing it. I will also assume you have already been told that starting a new business is not for the faint of heart.

Your new business may consume your professional and personal life. A recent New York Enterprise Report survey found that 58% of small business owners work over 50 hours per week and 70% work at least one weekend a month.

It is a perilous path for anyone but if you identify with any of the three reasons below I would suggest you stop and reconsider your path. Failure is not fun.

So here are three reasons that you probably need to think twice before starting your own business.

One...if you are not both flexible and resilient, you should not start a business.

The boxer Mike Tyson famously said: “Everyone has a plan until they get punched in the face.”

To be successful as an entrepreneur, you must be able to successfully navigate the daily challenges you will face. There will be multiple decision points that will impact the success or failure in your startup/small business journey. How you handle these as the owner of the business will be a key factor in your failure or your success.

As a small business owner, you will take significant risks with the distinct possibility that your new business will fail. To be a successful entrepreneur, you must be able to survive and learn from any failures or missteps you experience.

The odds are that you will experience some level of failure. Statistics show that 50% of new businesses will not survive past the 5th year in business.

You must be resilient when you fail and willing to change or pivot at a moment’s notice when things are not working in the business. To be successful, you must be willing to listen to your customers and be able to adjust to the needs of the market you serve.

No matter how strong your passion or personality is, there will also be times when you need to let others push, perform and lead. Successful leaders know when to step back and let their team do their jobs.

If you are flexible you will adapt to the circumstance you're in and find a path forward and if you are resilient you will survive the challenges you face and live to fight another day.

If you are not able to be flexible and resilient in your new business, DON”T START A NEW BUSINESS!

Two...if you do not have sufficient financial resources to both invest in your new idea and maintain current life expenses, you should not start a business

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This is especially true for those living paycheck-to-paycheck, as starting a business will require significant investment of time and money before it starts generating revenue.

New entrepreneurs almost always underestimate the amount of time and money required to get a new business launched and to a point of profitability. If you think it will take 6 months to be profitable, you have to assume it will be double that.

You should be financially prepared to live with no income until your new business is profitable.

Before you begin hunting for investors or turning to friends and family, you may want to research options for a possible loan that may be available to small business owners with what are considered "good" credit scores. But again, be pessimistic about the time frame for generating profit from the business that will allow you to repay a loan.

If you are currently employed, but lack additional resources, you can start a business as a side-hustle. This will allow you to accomplish two important things. First, if your side-hustle generates revenue and profit, then you have gone a long way in validating your new business concept. Second, you can utilize the profit from the side hustle to invest in your new business without jeopardizing your current way of life.

If the side-hustle does not generate any revenue or profit after some time has passed (typically six months), then it is safe to conclude that the idea is not worth pursuing and you should abandon it.

Financial stress can affect all elements of your new business and your personal life.

If you do not have the financial cushion to support your personal expenses until the business is profitable, DON’T START A NEW BUSINESS!

Three...If there are customers that have a need for your product or service, will they pay a price for your product or service that includes an acceptable profit margin?

You've had a business idea, and it feels like the right time to start your own company. But before you take the leap, there are a lot of things to consider.

If you do have an idea, a concept, product or service that you want to invest in, the most important step is validation. Validation is the most important step in starting a new business. It's what separates an inspired entrepreneur from someone who just spends their time dreaming about how great their idea will be and never actually puts any effort into making it happen.

Too many new entrepreneurs do not invest the time and effort doing the market research needed to validate and know that there are willing customers for their product or service.

Many get caught up in the 'That's a great idea!' syndrome. This happens when you discuss your new idea with friends, family and colleagues and you get an immediate positive response, which is usually some form of 'That's a great idea!'.

The problem with this response is that it tells you nothing about the potential viability of your idea. This is a dangerous time for any new entrepreneur, as they can become blinded to the reality of what lies ahead.

Avoid this syndrome by being very selective on who you share your idea with until you have validated it with potential customers in your target market and have confirmed that there is a market that needs and wants what you are selling.

If you are sharing your idea with individuals who are not in your target market, you should place minimal value on the input you get from those individuals. They are not your target market.

So, how do you find out if people in your target market need and want what you are offering?

Research, research and more research.

Research to find a market segment that has a need for your product or service. Then research deeper to identify individuals in that market segment that you believe have a need for your product or service. Document what they are saying and the questions they are asking when they are talking about the problem your product or service addresses and possible solutions.

And then, finally, do the in-person or direct contact research to engage with these individuals, presenting your new business idea as a solution for their needs and getting direct input specific to your product or service. Does your product provide a solution they are looking for? If it is, you need to know if they would purchase your product and, more importantly, would they pay a price that includes a profit margin that can support the business.

If you haven't validated your new business idea with potential customers in your target market, if you haven't identified a market that needs and is willing to pay for what you are selling...then DON'T START A BUSINESS!