Is it Time to Start Your Own Business?


businessThere is a lot of focus these days on job stability. That’s a significant factor by itself, but there’s another consideration that’s equally important. In many fields today, career “ceilings” seem to be lower than ever. It’s become very difficult to get a promotion, particularly one that’s accompanied by significant raise in pay. Is it time to start your own business? is a question being asked more frequently all the time.

With all of the risks in the job market, having your own business isn’t as risky as it once was. In fact, self-employment may be the more secure career option right now.

If you’re seriously thinking about starting your own business, there several questions you need to ask yourself before you do.

Do you have the specific business skills?

This is the most basic question that needs to be asked. Do you have the skills that are necessary to start the business you are considering?

Some business ventures are natural transitions from a job. For example, starting a bookkeeping service is an easy move for a person who is already a bookkeeper in a full-time job. The same would be true of a person who does computer repair on their job, but wants to move into self-employment doing the same work.

The situation gets more complicated if the business you want to go into is completely unrelated to your current job. If that is the case, you’ll need to get the required skills for the business venture before you start.

If that is your situation, consider either doing a part-time apprenticeship with another business in that field, or start your business as a sideline. Either way, you’ll be able to learn the skills you need to have while you still have a paycheck coming in from your present job.

Do you have marketing or sales skills?

This is a consideration that most would-be business owners tend to ignore. But if you’re going to start your own business you’re going to have to have the skills necessary to bring business and revenue to your company.

If you don’t have sales or marketing experience, you’re going to have to find ways to acquire the skills. You can take some courses, earn a marketing degree and read a few books, but that training will need to be strengthened by real-world experience. It will help if you can get a part-time job in either sales or marketing.

Sales and marketing are more art than science, so you want to try things and make mistakes while you’re working for someone else. You don’t want to assume that you will learn sales and marketing while you are in your business. You’ll need those skills from the very beginning.

Are your finances ready?

In addition to acquiring business and sales skills, you’ll also have to prepare your finances for the transition. There is a very real likelihood that your business will not have a positive cash flow during the first year of operation.

If that is the case, you have to have sufficient cash reserves to pay your bills during the startup. As an alternative you can hold a part-time job or work on contract assignments to supplement your income while your business is in the startup phase.

Still another consideration is to start your business as a side venture while you still have your full-time job. That will provide a ramp-up period for your new business. You can delay quitting your job until your business has a positive cash flow.

Is your family ready?

This is another unappreciated aspect of starting a new business. Once you get started, you’ll probably work far more hours than you did when you held a full-time job. This will be partially because you will not be able to afford employees, but also because it takes an extreme number of hours to make a business profitable at the start.

In order to do this you will need the support of your family. You’ll have to clearly explain your time investment in the business, in addition to the rewards that you hope to eventually gain. If your family isn’t on board with the new, heavier work schedule, your business may not work.

Do you have a back-up plan?

Some people think that having a backup plan when you are starting a new business is like planning to fail. I think it’s just good common sense.

The reality is that many new businesses to fail, and you are better off being prepared for that possibility. And it’s not so much planning to fail either. Just knowing that you have a viable backup plan in the event your business falters or fails, can give you the confidence that you need to succeed.

In addition, your business may experience slow times when you will need to put your backup plan into effect at least on a temporary basis. This is a way of ensuring the survival of your business. Having a cash flow source during lean times only makes good business sense. Not having one is truly preparing to fail.

Worried about the credit crunch? Don’t. Hitachi Capital PLC  are  offering a handy cashflow guide  and to $1 million free of charge in funding in the  Inspired Cashflow SME  Competition.

photo by usacehq

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Written by Kevin

With backgrounds in both accounting and the mortgage industry, Kevin Mercadante is professional personal finance blogger, and the owner of OutOfYourRut.com, a website about careers, business ideas, money and more. A committed Christian, he lives in Atlanta with his wife and two teenage kids.

Kevin

With backgrounds in both accounting and the mortgage industry, Kevin Mercadante is professional personal finance blogger, and the owner of OutOfYourRut.com, a website about careers, business ideas, money and more. A committed Christian, he lives in Atlanta with his wife and two teenage kids.

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