How to know if you’re ready to start your own business

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For most people who want to work for themselves they desire more flexibility, freedom, money and greater job satisfaction.

There are of course also the usual fears, including:

  • What if I don’t earn enough?
  • What if I don’t get enough clients?
  • Can I take the pressure?

I tell a lot of potential self-employed bookkeepers and accountants that the debits and credits part of what we do is actually the easiest part. There is a logic to what we do, which is governed by rules and regulations, which has an element of certainty.

In my opinion, the more difficult part is everything else– such as practice management, marketing, learning new software, how to deal with difficult clients and time-keeping.

How do you know if you can cope with these challenges Here are some initial questions to ask yourself:

  • How confident am I?
  • What is my level of competence?
  • How do I deal with set-backs?
  • How do I handle pressure?
  • Am I able to prioritise tasks?
  • Can I work alone?
  • Can I cope with change?
  • Am I adaptable?
  • Am I a quick learner?
  • Do I have the support of my nearest and dearest?

These are all personal qualities that you need to honestly evaluate before making that leap into self-employment.

In his book The E-Myth, Michael Gerber talks about three main characteristics that a business owner should ideally have. They are:

  • Technician – technical aptitude in a specific skillset ie bookkeeping or accounting.
  • Entrepreneur  – an ability to problem solve and find new ways to do things.
  • Manager – uses critical thinking to develop processes and identify risk.

The majority of business owners will have a percentage of each of the above in their make-up, some weighing more to the technician and others to the manager. It is rare for them to be an ideal combination of all three.

So how do you develop these other characteristics?

Confidence (and additional competence) will come with experience. That first meeting with a potential client can be a daunting prospect – “what if they ask me about something that I don’t know?”, is a common fear. This is where research will help. Try to find out as much as you can about their business before you meet them. Also, be comfortable telling a client that you’ll conduct research and come back to them on any queries that you can’t answer. This will help in the early stages of your business, then with experience, it will start to get easier.

Continuous professional development (CPD) is also an essential tool in your armoury. By ensuring you are up to date with your knowledge, as widely as possible, you will build and maintain confidence.

CPD keeps you abreast of industry changes and at the forefront of trends which can help you grow your business. For example with Making Tax Digital (MTD) business owners will have to maintain digital records and report them to HMRC on a regular basis. This is a great opportunity for the bookkeeper/accountant to provide services that ensure their clients are compliant.

And don’t forget to also try to be a manager. When you feel that urge to rush into the unknown, take some time to consider and evaluate what you are planning to do. Think of the long-term effects and if necessary, talk with a colleague or maybe a family member to see what they think.

So, what are my tips for success?

  • Be well-informed – make sure you keep up to date with as much relevant CPD as possible. The benefit here will be increased confidence as well as competence.
  • Try to be ahead of the game – research trends in your field of work, look for changes to software and procedures.
  • Be honest with yourself – don’t try to be something that you are not, work within your limitations, don’t try to run before you can walk. Don’t be afraid to say no.
  • Be patient – it takes time to build up any business. You will make mistakes along the way, learn from them and adapt for the future.
  • Be open minded – don’t assume something can’t be done, look at all of the options.
  • It’s good to talk – don’t bottle things up, talk to your network, discuss things and listen to advice, but don’t feel obliged to follow it
  • Run your business, don’t let it run you – try to ensure you have some “me time” or “reward time” and make sure you take it.

Have you got the “right stuff”?  With a bit of application, practice and hard work you can learn the skills you need and before you know it, you will be enjoying the thrills and spills of being your own boss.

Henry Cooper FMAAT was AAT's 32nd President.

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