Deciding to leave your current job to venture out on your own and start up a small business is a personal decision that you should make after weighing both the pros and the cons carefully. While there are many benefits to owning a business, it does not come without risk and a lot of hard work.
Leaving Your Comfort Zone
Once you make the decision to start your own business, you leave your employment and a guaranteed paycheck behind. For many people, the first year or two is the hardest. There are months that you will do very well and then there are months that might not.
After years of counting on a regular income, this can become challenging. The good news is that once you establish yourself, your income potential also grows. This means that instead of having to ask for a raise yearly, you can improve your salary by building the business. With each month that passes, your customer base will expand and you’ll reap the benefits of all your hard work.
The state of your current finances is the most important component it getting your business off the ground successfully. Initially, you will need capital to fund the business and pay for all the necessary permits, rent and supplies. The numbers will vary depending on the type of business you have.
For example, if you estimate that your expenses total $12,000 monthly, you should have at least 3 months in reserve. And, the initial investment can consume $30K, $40K or even $100K or more.
It’s not a good idea to start your business in a deep hole. Having the money saved to fund it on your own is always best. However, while traditional banks tend to avoid investing their money in a new startup business, there are other lenders who are willing to provide loans for a small business. Your best bet is to do the research ahead of time and see what options are available to you.
When you work for a company, you show up and perform the duties of your position. On the other hand, when you are the owner, every aspect of the business is your concern. When you first start the business you must prepare yourself to spend a lot of hours on it each day.
This can cause a lot of stress on not only you but also your family. Make sure that you sit down with your family and explain that you will need to focus on the business for a while so they prepare themselves for your absence.
Starting a small business is a risk that can either work out in your favor or take your savings. That’s why it’s so important to weigh the pros and cons first. Then, if you decide to move forward and create a thorough budget and are willing to dedicate yourself to the business, you can transition from a typical 9-to-5 job and enjoy the benefits of being a sole proprietor.