Here are the Million Dollar
Questions for hard working people. Are you unsatisfied with your job? Have you ever thought about starting your own business?
You might want give starting your own business some serious consideration.
Popular startup businesses include gift shops, cleaning services, accounting
services, and so forth. In addition to the type of business that you would
like to start, you also have a number of different options when it comes to
operating a business. Many entrepreneurs run online businesses, storefront
businesses, or even both
If you are serious about starting your own business or at least learning if running your own business is something that you are capable of doing,
here are a few important points that should be taken into consideration:
Start Up Costs
Startup costs are the costs and
expenses associated with opening and operating your own business for that
period of time before the business finds its legs and starts to support
itself, and you. No matter how much you think you know about the business
plan, the market, the economy, start up costs are ALWAYS higher than you
expect. We have yet to come across a single entrepreneur who has said, "gee,
those start up costs turned out to be really low!" Whether you would like to open up a
small online gift shop or a big auto parts store, you will need to incur
some start up costs.
The startup costs associated with starting your own business will all depend on the opportunities that you choose,
the cost of money, the economy, the competition, the winds and vagaries of
an ever-changing marketplace.
The Business Plan
The Business Plan is where you first
start to look at the Start Up costs. Do not get so caught up on the business
plan that you forget about why you are interested in starting the business,
and it does not matter if the plan is on heavy cream paper stock or on the
back of a very large napkin. However, you must do a business plan, always!
What this plan does is help you to
examine the current costs of your expected operation in your planned market,
and what it does is give you an anchoring point for when you are up late
nights putting together a big order for your biggest customer or for when
prices change for your raw materials. For a small online gift shop, those
costs may be the wholesale cost of your gift offerings, the price of your
webhosting plan, the rates on your shipping company. Could be anything.
The Business Plan also gives you the
opportunity to chart out what you plan to spend for basic a office setup: computers, internet service, a business phone, business phone service, a fax machine, a copier, an office desk, and other office furniture.
A good rule of thumb is: calculate what you think you will spend to start
and run your business until it breaks even...then TRIPLE it.
You may decide to go ahead anyway if
you do not have triple your evident start up costs but at least you will not
be shocked into inaction if your financial well runs dry before your
customers start to stampede your (online or actual) door.
Financing the Business
If you have an ideal credit score, you may be able to receive financial assistance to get your business up and running.
Another factor that you need to take into consideration, when looking to determine if you should leave your current job and start your own business is time.
All businesses, no matter what the type, take time to see profits and success. You have to
set up your operations, market your business, and do so much more. You do
not want to go irretrievably broke just as the business is starting to take
off. That is why it is important that you not only have enough money to get your business up and running, but you will also want to make sure that you also have enough money to support yourself and your family until you are able to start making a profit with your own business.
Do not underestimate the value of
friends and family financing. Such financing is not "mom and pop" or small
time. You would be surprised at how many mega businesses started out with
friends and family financing, including Microsoft and others. Venture
capitalist and angel investors almost expect these days for the budding
entrepreneur to have tapped into this type of financing first. The thinking
goes that an entrepreneur's friends and family know him or her better than
the banks, credit reporting agencies, or commercial investors ever could
early on. Family knows if you are honorable with you debts!
Insurance
Another one of the many factors that you will want to take into consideration, when trying to determine if you should start your own business, is insurance.
Such a topic seems mind-numbingly boring when you are all hyped up on
starting that great business. You will be tempted to forget about such
things as insurance. Don't.
Turn to your local paper to read
about those store owners and such who are wiped out after a fire that
absolutely no one would have expected. Things happen, no matter how careful
you are.
Also think about health insurance. At your current position, do you have health insurance? If you are married, would you be able to get health insurance through your spouse? If you would be unable to do so, health insurance is something that you will want to take into consideration. Even if your health is fine right now, you never know what could happen, especially if your health insurance is also used to help cover the rest of your family. Should you decide to start your own business, you
have to be able to purchase insurance for yourself or for the rest of your family.
It only takes on accident, one illness to wipe you out.
With that in mind, it is important
to remember that insurance costs money, quite a bit of money to be exact.
What is nice about starting your own business is that you, literally, have
an unlimited number of options.
The decision to start your own
business is yours to make. This freedom to choose is one of the most
alluring features of self-ownership. Caution: any successful entrepreneur
will tell you that they enjoy working for themselves--most days--but that at
the end of the day, there is only ONE REASON to go into business for
yourself and that is money.
This last statement may seem cold
and unappealing. If it does, you may want to reconsider going into business
for yourself. You see, a self-employed business owner may love freedom,
working with his or her hands, meeting people, pursuing challenges, and all
of those wonderful elements may be core values and extremely valuable to the
entrepreneur, but just as we have never met a successful entrepreneur who
has not underestimated their start up costs on any venture, we have never
met one who was neutral or blase about money. Never. Money may just be "a
way to keep score" to a hard-charging entrepreneur, but they want that score
to be well in their favor.
Trust us on this. With that in mind,
the decisions that you do make can have a huge impact in determining whether
or not your business, should you decide to start one, is a success.
Make sure you:
Calculate your startup costs
Write up a business plan
Consider your available sources of
financing
Make sure you are covered with
financing and insurance!
Good luck.
