One of my favorite sayings is “You need to start your business two years before you start your business.” If you are considering owning your own microbusiness, there are certain things that you need to tend to while you are still employed. The term “You, Inc.” refers to aspects of you and your personal life that need to be in order before you can head your own company. 

For example, getting your personal finances in order and treating your personal finances like a business is a big part of the “You, Inc.” mentality. If your “personal house” is not in order, how do you expect your “business house” to be? Businesses that open with their owners in deep personal debt have a tough time succeeding. Personal debt causes a cash flow problem within the business because the owner is constantly pulling out money, the shortage of money can impact business decisions, and drowning in debt instills a sense of panic in the business owner. It can also negatively impact morale when employees see their employer constantly pulling money out of the business while, at the same time, not investing in the business or the employees. 

Now that you understand the importance of running your personal life like a business before you ever take the plunge into becoming a business owner, let’s discuss three steps that will help you do it right.

Identify Your Market and Customers

One of the first decisions you must make, way before you take the plunge into business ownership, is to determine what your market and who your customers are going to be. When I say “market”, what I’m referring to is “marketability.” Will the good or service you will be offering in your business have a market? Will people want and be willing to pay for what you intend to offer? 

As for customers, while you are still employed, they are your current clients, customers, or employers. For example, if you are a software engineer trying to get a job, what would be the “best deal” you could get from other employers in terms of compensation, lifestyle, and career opportunities? Do they treat their employees better than you, at your present job, are being treated? If you moved to one of those other companies, would you be more successful? The answers to these questions are important and things to keep in mind if you are intending to hire employees for your own business at some future time.

Keep Your Customers Happy

If you are currently an employee, this means keeping your company, and, in particular, your boss, happy. A good employee is one who doesn’t cause problems at work while a great employee is one who has the initiative to bring in new work to the business and performs his job well. If you are going to eventually own your own business, you have to start by being a great employee to the business in which you already belong.

It boils down to this: business and farming have a lot in common. You’ve got your plot of ground, which is the overall market for your product or service as well as the location of your business, regardless of whether that location is a physical location or online. Then you’ve got your crops, which is the actual product or service your company is offering, which can change over time depending on the wants and needs of your customers. Lastly, you have to deal with the weather, which is the changes in the economy and the market. With these metaphors in mind, you have total control over your crops, some control over your plot of ground, and very little control over the weather – but knowing what these influences are prior to starting a business will help you plan for the future.

Make a Profit

As stated earlier, before starting your business, it is important to get your personal finances in order. Start thinking of your paycheck as a business income stream. You want to have a little profit after paying all of the bills because, just like a business, you will eventually go bankrupt if you don’t make a profit along the way. Therefore, it is important to watch your personal cash flow way before you start a business. You need to make sure that “You, Inc.” doesn’t get into too much debt and that your cash flow stays on the positive side of the equation. If you cannot stay out of debt in your personal life, how are you going to do so in your business?

Running your personal finances, like a business, will prepare you for when you actually start your business and will help to keep you and your business financially healthy. It will give you confidence to make business decisions about your long-term future instead of allowing fear of loss to dominate your decision-making. In addition, having your personal finances in order will help you qualify for funding for your business. If you do not have an income or if you are upside down in your personal finances, you will not qualify for the funding you need when you finally decide it’s time to take action on your business plans.

So, congratulations on your future business plans, but don’t leap into it just yet. Take some time, roughly two years, to begin running your personal life as a business. This includes making your current “customers” happy, identifying who your market and customers will be, and running your personal finances like you would a business. By doing these things ahead of time, you will greatly increase your chances of succeeding with the business when the time comes to act.

For more tips to help you plan for and succeed in your business, consider ordering my book, A Sure-Fire Microbusiness Guide: From Startup to Maintaining a Truly Small Business. It is currently available for download, and a print version will be available soon. It’s a must-have for anyone considering owning a microbusiness in the future.