The statistics are a bit dire: 20 per cent of small businesses do not make it past their first year — and fully half will close their doors before their five-year anniversary. Nonetheless, eager entrepreneurs regularly take the plunge in order to follow their dreams of owning their own business. If you are thinking about blazing your own path, despite the odds, you are not alone.

How can you protect yourself from excess enthusiasm and disappointment? Before you leap into a new business venture, consider these five questions:

Are you looking to create a job for yourself or do you want to grow a scalable company?

Many new entrepreneurs end up creating a job for themselves, but not a company that can operate without them in a key position. That is okay, but if it is not your long-term goal, you need to have a clear vision of how you will scale your business before you begin. Otherwise, you risk finding yourself working hard and taking on more than you should, without either the funding or the people you need to succeed. If you want to work less down the road, you will need to focus on creating a business that can operate with or without you, rather than a so-called “lifestyle” enterprise.

Who are the players you want on your team?

In real estate, the crucial factor in price is “Location, location, location!” In the small business world, the equivalent is “Talent, talent, talent!” Having great talent around you is the key to success. Keep your standards high and be meticulous in choosing those you choose to scale the company with; it is important to note that the skills required starting a company and getting it to N20m in annual sales, and the skills required to scale a company from N20m to N100m, are very different. You might get lucky and find people who have both sets of skills, who can stretch with the demands of a larger business, but more likely if you want to keep your original team, you will need to invest in them. For example, the Chief Executive Officer at Power Digital Marketing, Grayson Lafrenz, created a free 14-week MBA programme for all employees interested in growing their general business and marketing skill set to solve this problem internally rather than have to reach outside the company for experts to expand the company.

To attract good talent, consider giving your people equity as part of their compensation packages. A good rule of thumb is to set aside 15-20 per cent of your total equity for your key players. These are the people — regardless of title or hierarchy — whom you can’t afford to lose. You need their talent, and you need to offer something attractive to keep them on board and invested in your vision.

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Questions to ask before starting a business http://www.sanwomi.com/2018/09/questions-to-ask-before-starting.html