Guest columnist Carol Roth explains how to gain experience in a business before you commit to starting your own.
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Whether you have always dreamed of being your own boss or are motivated by being unemployed, underemployed or unhappily employed, starting your own business might be sounding more appealing than ever. However, the failure rates of businesses are as scary — if not more so — than our current unemployment rates.
I always say that if you fail to prepare, be prepared to fail. One way to get that preparation to help stack the odds of success in your favor is by gaining some industry experience.
Here are 5 ways to gain that experience (and in some cases, make a few extra dollars) before you invest you full time and effort- as well as your money- into a new business venture.
Take a part-time job in your target industry: If you want to open a restaurant franchise and you have never worked in foodservice before, consider taking on a part-time restaurant job, such as a nights and weekends position, before leaving your current job or your job search behind. This will help you to assess whether you like the industry, whether it’s as good of an opportunity as you thought and also, whether it’s a good fit for your skills and personality. These are all important things to know before you invest your money in a new business and can be done easily.
Talk to your future customers: Customers are your business’s biggest asset, yet getting good market research is tough. Find out your future customers’ wants and needs (as well as how big of a responsibility it is to deal with them) by taking on a customer service job in your target industry. By working in customer service, you will be able to gain first-hand knowledge of how your customers think, act and spend!
Learn from someone who’s been there. Question: What is most people’s favorite thing to talk about? Answer: Themselves. Business owners are no different. Ask business owners who have been in the trenches for years if they could make some time for an informational interview so that you can learn the pitfalls of the industry. Or even better, see if you can shadow them for a day or two or take on an unpaid internship to learn the ins-and-outs from someone (or a couple of “someones”) who have been successful. If you can find and interview those who haven’t been successful as well, that will provide even deeper learning. If you don’t know anyone who fits the bill, ask your personal, professional and social networks to help put you in touch with these business owners.
Start a jobbie: A jobbie is my name for a hobby that makes money (otherwise known as a side business). Having a jobbie is a great way to test out the viability of a business with a defined budget before you fully commit to it. If your industry involves a product instead of a service, develop, build, and test prototypes to try out the product’s appeal and function in tandem with your day job or your current job search. Both of these approaches will allow you to gain industry insights and if you stick to a budget, it won’t cost you your life’s saving.
Switch careers: Instead of part-time efforts, consider taking on a full-time job in your target industry. See if you can work your way up the ladder in a business similar to the one you want to start, even if this means taking a few steps back in your career. Not only will you learn the business from the ground up, but it’s a good test to see if you can get promoted. If you can’t move upwards in someone else’s business that looks a lot like the one that you want to start, think twice before starting your own.
Carol Roth is a business strategist, former investment banker and bestselling author of The Entrepreneur Equation. She was named as a Top 100 Small Business Influencer for 2011.