Generally I hear two reasons about the motivation from those who started their own business: to have a certain lifestyle or to make money.
The lifestyle reason is often articulated as involving passion, needing to help people, taking one’s life into one’s own hands, and so forth. While I do not doubt the power of this motivating factor, I discourage relying upon it as the sole reason to start a business.
I submit that if you do not have as a reason to start a business the motivation to make money, then you should not start a business. If that is accepted, it must be noted that in small business money is made not by running the small business but by selling it. (There is not space here to make that argument, but if you doubt it please do the research.) You should start a small business if you have a realistic, well-considered business plan showing how for a period of three to ten years the business can be developed and sold. This means that the business plan must initially show a proven market for the product or service, how the business will transition from owner-managed to having professional (non-owner) management, and how the business will be sold through either an internal or external sale.
The key element is that to get the most value for the business (remember that is the goal), the business cannot be about you. A sophisticated buyer will not pay top dollar for a business that must include the seller’s services. The business plan must show how you can start the business and then develop the business so you are excluded from providing services to the business. The business plan should have a checklist, much like a buyer’s diligence checklist, of what the business will look like ready for sale. The business plan should anticipate the difficulty of selling a business and provide a plan for selling the business to those who are managing it if a more attractive sale to a third party does not materialize. With this work done, it might be starting to make sense.
