It’s driving you nuts that your current boss seems like a bonehead.
You know that life could be much better going solo.
Or maybe you’re passionate about the gadget you’ve designed, and feel compelled to build a zillion of them to sell worldwide? Or maybe you imagine earning mega bucks by becoming the next Bill Gates, sailing away on your yacht before age thirty?
How do you assess your personal and financial situation to determine the feasibility of starting a business? Could you quit your job to give this new venture 100% of your time? Or do you need to transition into entrepreneurial life gradually?
Is it better to just say no?
Type 1. If the idea of no steady paycheck and no benefits terrifies you, and you excitedly look forward to three weeks paid vacation and the holiday bonus check, then starting your own business might not be for you. Does the threat of too much risk and uncertainty ruminate around in your brain? Have you bitten your fingernails to the bone?
Type 2. When you own a small business, you are the boss. You make the decisions and you have the ability to earn more money because you directly reap the rewards of your hard work compared to an employee with limited income potential You’ve been told you’re a self starter, hard working and never lazy. People say you’re a born leader, decisive, disciplined, a great communicator, and a peacemaker. You’ve always been an innovative problem solver who thinks outside the box. You’re super organized with an overabundance of stamina and an uncanny ability to get more done in less time, compared to your peers.
If you are a Type 1, you should probably leave entrepreneurship to someone else. However, if you are a Type 2, this might be the perfect life for you.
Writing a business plan is essential. It keeps you focused on what you will sell, when you will start, how much profit you anticipate, and growth and marketing plans. Numerous books, websites and software packages make business plan writing a manageable task.
First, decide if you will be selling merchandise or a service. Service businesses are generally simpler and quicker to set up. If you’re providing computer troubleshooting services, for example, start by finding a few clients and you’re ready for business. You could probably work from home with little difficulty.
If you have a product that you manufacture or an item you sell, location is a necessary consideration. For example, if you build custom bicycles, you will need a garage, warehouse or workshop. You may also need inventory, supplies, tools and possibly some larger equipment, know as capital expenditures, and might require more money to get started. A bank loan may be needed.
Keep it legal
Before you open for business you must decide the most beneficial legal structure to choose.
Proprietorships are easy and inexpensive, but put the business owner in a vulnerable legal position.
Partnerships work well in many ways as long as the partners have an equitable agreement. Do not enter into a partnership without giving serious thought to the possibility that the partners may not agree on certain important issues in the future.
Corporations legally protect the owner, called a shareholder, but can be costly to establish. Limited liability corporations (LLC) have become very popular in the past several years; they combine the best qualities of each of these legal business structures. There is crucial tax implications specifically related to legal structure, so do your homework before making this very important decision.
File the necessary city, county, state, and federal forms and pay the required monthly, quarterly and yearly taxes. Ignorance is no excuse.
And, don’t forget to apply for any necessary licenses or permits.
Staff with success
There are various ways to staff your business. Temporary help can be valuable if your business is seasonal. Some businesses use independent contractors instead of or in addition to employees. Again, there are many tax implications and differences in work and commitment between them. Make it your business to know the difference before bringing anyone into your business.
Create your market
Customers and clients are out there but you need to get them to your door. That’s what marketing is all about. Advertising is one of many components of marketing.
With enough perseverance your business will grow and change over time. Start small and cautiously, and you will never need a “real job” again. Whatever your motivation to be an entrepreneur, with a bit of gumption and some calculated risk taking; you can truly have it all.