Going into business for yourself can be extremely rewarding and many people have made a very comfortable living or become super-rich after starting their own businesses. However, starting your own business can also be very risky and in order to make sure you are doing the right thing you need to consider a number of things before you take that final leap. In recent years more and more people have started to think about going into business for themselves after seeing how little control they have over their future career path during the financial crisis and recession. However, it is a big decision to take and you need to have your head screwed on – make sure that you weigh up the pros and cons before you make your final decision.
Some of the things that you need to consider when thinking about starting your own business include:
Can you afford to take the risk?
If you have no commitments, still live with your parents, and do not have a family to support then it is a lot easier to start your own business without any worries than if you have a mortgage to pay and a family to support. You need to consider whether you are prepared to risk the fact that your business may fail and you may not be bringing in as much money as you need to cover your outgoings, at least to start with.
Do you have financial back up?
If you do have financial commitments and family to support you need to make sure that you have some form of financial back up in case things do not work out as planned. This could be anything from savings to tide you over should the need arise to your partner or another member of the family who may not work at the moment being prepared to get a job to provide additional financial security whilst you find your feet with the new business.
Do you have enough capital for start up costs?
Starting up a business will usually cost a fair amount of money in terms of set up costs, marketing and equipment, so you need to ensure that you either have the money to cover these costs or you can get the money in terms of finance from a lender.
Are you able to commit the amount of time that is needed for start up businesses?
Sir Richard Branson and Sir Alan Sugar didn’t get where they are today by spending a couple of hours a day working at their business and the rest chilling out! A start up business will take up a huge amount of your time in most cases and you have to be able and prepared to commit this time. If you do not feel that you can commit practically unlimited time to your business you may either need to consider going into business with a partner or you may need to rethink whether running your own business is the right step for you.
Jennifer is a freelance financial journalist and business blogger. She loves to write about dancing and jazz but seems to pass most of her days writing about loans, mortgages and umbrella companies.