Wednesday, July 28, 2010

Be your own boss: the best time to jump in to self-employment

Say you've worked hard your entire life, lining someone else's pockets and now you'd like to start your own business. Only you know if the timing seems right for this venture, but a few things you'll need to be sure of is your own dedication, your financial situation and some expertise in the area you're considering. If you're currently struggling to make ends meet, you'll need to postpone the change until you've got some cash reserve. A new business takes time to turn a profit, if it ever does, so plan on having at least enough money saved to support your family and pay all the bills at home and business for at least two years. This is in addition to the cost of setting up the enterprise.

Before even considering setting out on your own, it's vital that you have the proper training to not only speak informatively about your products, but to have some kind of business training to help you in making decisions for and about your company. Whether your business will be a restaurant, a dry cleaning store or a print shop, it's recommended that you take some initial business courses before proceeding. Of course, there are people who will be happy to keep your records, pay your bills and manage your business, but these services are costly and may not leave you with the input that you'd like to have in your own company. There are others who do need to have some input in your business - your family. If they're not happy with the decisions being made, you're likely to have family problems that will later become business problems. Discuss the business plans with your spouse or potential business partners, so that each is aware of where they stand in the company, if they have a place in the company, and what is expected of each person.

Having the right approach is a necessity to starting your own company. Be prepared to work long hours, possibly for months or years, with little reward or income. And, don't be surprised if you not only don't break even, but you also show a loss over the first few years. It might even be necessary to have family or friends assist you with little or no pay to keep your head above water. Expect the unexpected. Prepare for the supplies you might not need, have money put back for vehicle repairs that might not come about, and set aside time for working when you might not have to. This way, you're prepared for much of what will pop up with little notice.

Before starting, have a workable business plan. Be realistic. Consider aspects of the area where you'll set up shop, be aware of tax issues and think about licenses and other additionals. Have capital and resources established long before the welcome mat is in place. Be ready to take action and implement various plans at different stages in the setting up of your business. And, include in your business plan a program of studying the job market, particularly in your chosen field and making discoveries of how others in your field operate and what they charge.

Being self-employed usually requires more knowledge, time, resources, and energy than working for someone else. Make sure that you are committed to whatever it takes to make your venture successful. This may mean putting off other goals and plans in your personal life. A general rule of thumb is to estimate how much time you think it will take to operate your store, then double that estimate. You might not think that this many hours will be needed, but it is an accurate way to determine how much commitment will be required of you. Likewise, estimate the cost of setting up and running the business for a year, then add half that figure again to get a realistic view of how much of an investment will be needed.

Of course, some types of businesses are a little more flexible in terms of time and commitment than others. You might want to adjust your business goals to fit in with your lifestyle. For instance, if you're determined to have your nights and weekends free, you'll have to eliminate many businesses from the list of possible ventures you can start, such as a real estate company. But, this doesn't mean that you can't run your own company. There are businesses to suit every lifestyle; you'll just need to choose an appropriate one for yourself.

If you're the nervous type, afraid to fire someone, too meek to speak up or you spend endless nights not sleeping then you're probably not ready for your own company. And, if the company is eventually started, recognize if the business is not succeeding and when to pull the plug if it becomes necessary.

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