Wise Wednesdays - Pillar # 3: Reality Testing

Before I say anything about reality testing I would encourage you to reach for your dreams. It should feel scary. However, that should not be confused with just blindly leaping in the air and hoping that a net will appear. That kind of philosophy leads many people to come crashing down.

Reality testing is about being honest with what’s out in the marketplace, where you are in life and what you can realistically expect to make from your business. In short: Getting real.

Getting Real with the Marketplace
Poor market research is one of the key factors that most businesses fail. Although it’s important to be passionate about your business, in many instances it can get in the way of being objective about the marketplace because you so desperately want to be making a living doing the business. Getting real is about digging deep and finding out whether people are willing to pay for your goods and services? How much? Who is in the market now? What are the lead times in making a sale? Who is the ideal customer? Be prepared to substantially change HOW you go about setting up the business if research tells you to change your approach (as it inevitably does). Take out a successful business owner, ideally in your field, for lunch or dinner. It will be the best money you will ever spend.


Getting Real with Your Life
How is your personal life? Is it a mess right now? If it is this may not be the best time to start a business. Even at the best of times you will need a great dose of emotional stability. How are your finances? Do you have some cash reserves to dip into in hard times? Do you have a lot of outstanding debt? If so it’s best to clear that before you begin.

Getting Real with Making Money
How much money will you require to start the business and what will it be used for? Have you drawn up a month-by-month projected cash flow for your business with realistic time frames? Be very detailed. I have yet to hear an entrepreneur tell me, “Oh ya, I had all the money I needed and it happened quicker than I thought.” Most people are off the mark because they haven’t taken a hard look at what is involved. There is nothing wrong in reaching for your dreams. Just make sure you’re giving yourself enough time. If market research is the number one reason why most businesses fail to get of the ground then a poor cash flow is what will sink a business once it does get off the ground. Entrepreneurs ultimately are pragmatists. Reality testing is a way to step back and be as objective as you possibly can. You will need it time-and-time again.

Next week will be the last and most important pillar --- Pillar # 4: Character