Question

In order to ensure success, what are the five rules you need to follow before going into business for yourself?

Answer 1

Here are five practical rules to follow before you go into business for yourself — each with the key actions you should take.

1. Validate demand first
- Talk to real potential customers; do not rely on assumptions.
- Get commitments: pre-sales, deposits, letters of intent, or pilot customers.
- Test a minimal version (MVP) to confirm people will pay for the value you offer.

2. Know your numbers and secure a runway
- Create a simple financial model: pricing, gross margin, fixed/variable costs, break-even and cash-flow forecast.
- Ensure you have enough personal and business runway (savings, funding, or revenue) to survive until you reach steady cash flow.
- Plan for contingencies (3–6 months personal expenses is a common target).

3. Define a clear business model and go-to-market plan
- Be explicit about who your customer is, the problem you solve, and why customers will choose you.
- Document channels and tactics to acquire customers and estimate customer acquisition cost (CAC) and lifetime value (LTV).
- Set measurable milestones and a timeline for achieving them.

4. Handle legal, tax and operational basics
- Choose the right legal entity, register your business, and get necessary licenses/permits.
- Put in place basic contracts, simple bookkeeping, bank accounts, and insurance.
- Protect key IP or brand elements where appropriate.

5. Build the right skills, team and support network
- Identify gaps in your skills and plan how to fill them (hire, partner, outsource, or learn).
- Line up mentors, advisors, or peer networks for guidance and accountability.
- Prioritize early hires or contractors for sales, operations, or technical work only after validating demand.

Follow these rules to reduce avoidable risk and increase your odds of getting to sustainable success. If you want, tell me your business idea and I’ll help you apply these rules to it.