I get it, you’ve gotten tired of the corporate grind. All the meetings, status meetings, and teambuilding activities have destroyed any remaining corporate pride you may have had left. The seemingly endless freedom of self-employment becomes more of a necessity than a far-off daydream. You’ve made up your mind, you’re going to start a business. Being a small business owner in my opinion is a pursuit, most noble. But beware, there are many pitfalls ahead. To circumnavigate this somewhat, be sure to ask these questions before taking the plunge.
Is My Business Needed?
I imagine that you think your business is probably super cool and totally necessary. However unfortunately, you can’t be your only customer. Other people are either going to have to buy your wares or buy your services. And if you don’t have anything useful to sell then no one will buy. One would be surprised how many businesses sell things that aren’t necessary at all. If no one needs your services or products, then realistically speaking your business isn’t needed either. And if your business isn’t needed expect it go out of business fast.
What Are My Living Expenses?
When you start a business, no longer have access to the security of a paycheck. While your corporate job may suck, you at least get a certain amount of money twice a month. When you run a business, this doesn’t exist. This means your living expenses will have to come from the business. This seems pretty intuitive. However, a lot of people will go into huge amounts of debt to run a business, and this can cause people to struggle to pay their mortgages or keep up with credit card payments, etc. Having a budget will help you keep your expenses straight and allow you to cashflow to the extent that it is possible to do when you’re starting out.
How Much Money Do I Need to Start a Business?
This may seem like the same question as the previous one but it’s not. Instead of focusing on living expenses we’re talking about the actual costs of running the business. Make sure to calculate, or at least estimate the fixed and variable costs that your business idea will incur. You’ll want to figure out if you’ll need to take on any business debt to get started. Pay special attention to small business loan rates and make projections of the interest that you will have to pay.
Who Is My Support Network and How Can They Help?
Your support network is most of the time family and friends. However, if you’re more “entrepreneurial inclined” this may also involve venture capitalists, bankers and the like. The main thing is you need to identify who your “support network” is and identify how they can help you with your business. The obvious answer is “money” but try to think outside of the box a little. Maybe you have a friend who is a great writer, and you can give them free products in exchange for them writing a blog about your business? Or maybe your spouse can help you with your portion of the chores in exchange for doing their chores sometime in the future? The point is having a support network is critical to any small business’s success.
In Summary
The best businesses may have been already started but if you can identify a niche and monetize it you will be better off than most. Also being able to identify how much cash you use for daily expenses as well as business expenses is critical. Variable expenses and fixed costs are two main components of business expenses to focus on specifically. In addition, having a support network ready to reassure you that your business can and will turn a profit, can help when you start to have doubts. In the end starting a business is never easy but with great planning it can be a significantly less stressful than it usually is for small business owners.