Entrepreneurship is often associated with taking a leap into the unknown. Quitting your job is a daunting prospect for many, and can often involve sacrificing financial security. But there are some simple ways to assess whether you should become a founder, and what you should work on.
At Entrepreneur First, we see more and more people quitting lucrative City jobs to start their own business, and this is the advice we give them.
Find your edge
Many first-time founders, particularly from the City, are keen to distance themselves from their work in finance or professional services when they start up.
However, the knowledge and skills you have gained from your career are some of your most valuable assets and can give you an edge on your competitors. Not only will this give you a head start in the market you are targeting, but will also make you more attractive to investors.
Know the opportunity cost
There are two opportunity costs to consider when founding a startup. The first is that of pursuing a startup rather than continuing on your existing career path. The second cost is choosing one business idea over another.
Many first-time founders pursue ideas that are too small, like lifestyle businesses that could make a lone founder a decent salary. But if you want your new career to be as lucrative as your City one, you need to think about how you can create a scalable company from Day One.
In particular, you should be focusing on how software can help you to scale. The capital requirements are very low compared to traditional bricks and mortar businesses, and it allows you to reach millions of potential customers very quickly.
Seek out support
Startups are booming right now and there is plenty of support available.
Think carefully about where you find your mentors, investors and advisers. To be able to create and grow a startup effectively you need to find advisers who have experienced this process. It’s an inherently creative one, unlike more traditional business roles which are typically about optimisation.
Try to find angel networks, apply to accelerators, and track down exited entrepreneurs to get advice on starting up your own business.
Build a product, not a startup
When first starting out, it can be easy to get distracted by trying to create a company.
Spending time on creating a logo, buying business cards, and going to startup networking events are an easy way to feel busy. But they will ultimately have little impact on your success.
In the early days you should concentrate on speaking to your customers, and building your product. Work out what they really want and deliver it. Don’t get distracted by anything else.
Take the leap
Most people talk about being an entrepreneur, but very few people take the leap.
It can be hard to find the ideal time to quit your job, but there is never a perfect time to do it, and whether it’s a promotion or next year’s bonus, there will always be an excuse for staying put.
The truth is that the perfect idea doesn’t exist, and you will never have enough money in the bank. Maybe your plan won’t work out, but what’s the worst that could happen?