Things to know before you can be your own boss
By Robert Nelson
So you want to start a business and be your own boss. That’s great, being the boss of your own business can be rewarding. But before rush in and start investing time and money there are a few things you need to consider first.
Why Do I Want To Be Your Own Boss
When you ask someone why they want to start their own business the answer you’ll hear most often is “to make money”. While that is a good plan (no one plans to lose money) it may not be the best reason to start a business. It takes a lot of time and effort to start and run your own business and it can take a long time before you start to see a profit. Being the boss means you are the one that makes all the decisions, making you the one who is responsible for every thing that goes right with your business, and everything that goes wrong too.
Can you stay with it for the long haul?
Take some time and ask yourself what your reasons are for wanting to be your own boss:
- Tired of working for some else – We all have days when we wish we where giving the orders. But running your own business will take a lot of time, do you have the time to invest?
- You have the perfect idea – you may have what appears to be a great idea for a business but do you know how to proceed?
- To supplement my current income- creating a part-time business that you can run in your free time may be a good way to start. Allowing you to test and fine tune your business model without giving up your current income.
- Transitioning to a new career – You may be leaving your current position and want to try to be your own boss and start a business of your own. This can be a good time to start.
Everyone has different reasons to want to start a business, take the time and identify your reasons. Once you feel you have the right reason for yourself, you can move on to the next step in becoming your own boss.
What Do You Know About the Business
You don’t need to have a business degree to start a business lots of people start new businesses every day with little or no business background at all. But knowing the basics of the business like bookkeeping, taxes, marketing and how to pay your vendors before you begin is good. Knowing what you don’t know is just as important, being willing to learn how to do these things and more is important.
Start slowly and gather the information you need. You will learn more as you progress, take advantage of the local book stores and library as well as online resources. You will be amazed by what you can learn on your own.
You should call your states Secretary of State and local Chamber of Commerce and ask them about what you will need to know to get started and what time lines apply.
Weigh The Pros and Cons
Make two lists, one for all the positive things in being your own boss, and one for all the negative things. Don’t worry if the cons list is getting longer then the pros list. It’s not how long the lists are but rather if you feel you can handle the cons as they come up.
Your family and friends are a good place to start, ask them what they think about your ideas and plans and what they would want from a business like yours. Their answers can help you refine your ideas and give you incite into your future customers needs. There are many business owners that started where you are and many of them have websites that discuss what they encountered and advice on how you can avoid it. When you have questions do a web search for an answer, you will be surprised how much good advice is out there and can help you handle issues and even avoid some.
Develop a funding plan
How will you fund for the new business?
Do you have a plan to cover your business and personal expenses until it does?
There are many ways to collect start-up capital but be sure to investigate the terms closely before signing.
Use your savings – this may be enough to get you started bust what will you use to keep the doors open until you get enough customers to cover the expenses
- Ask Family and friends to invest – this can be a good source of extended financing but are you comfortable asking family for money?
- Ask for a bank loan – getting a bank loan is not easy in todays economy, some banks are denying up to 80% of small business loan applications
- Crowdfunding – There are more and more Crowdfunding sites online every year. Before you sign any agreements be sure you know and understand all the fine print. You want to be sure you know what the interest rate is and how you will make your payments while developing your customer base.
Have an exit plan
This sounds like giving up before you start but having an exit plan in place is one of the most important planning steps. Say your business is a total success and you want to take your profits and retire to someplace tropical. What do you do about your business?
You may want to pass it down to a daughter or son, sell it to one of your trusted employee’s or maybe just close the doors and liquidate the equipment. Over time you will need to revisit your exit plan as your business changes and make adjustments.