So many times after someone has been laid off they think about starting up their own business. If you are one of these people who would like to work for themselves, I suggest you ponder the following:
- How are you going to generate business? Do you know that as a start up organization the owner has to wear many hats, including salesperson. If you cannot get comfortable with spending 80% of your time prospecting for new clients, then I think you might not be ready to take the plunge. The worst thing that can happen to a new business is that a good client falls into your lap and provides revenues for a good period of time. What happens in this situation is that the business owner spends all of his/her time delivering their product or service to the client that they forget to mine for new business. When that client goes away, the business is left with zero income, and no new prospects in the pipeline.
- Do you have enough money to support yourself and the business for at least a year? It takes start up capital and the ability to stay afloat for a long time to survive the first year.
- Have you created a viable business plan that outlines if the business is viable in the long term and what needs to happen to be profitable? Whatever number you think you need, allow at least 50% more because unforeseen expenses come along all the time.
- Do you know what state/federal licenses are needed to start your business? Have you allowed for worker’s compensation insurance to cover employees? Do you know that as an owner you may not be able to be covered under your own worker’s compensation policy? If that is the case, you will need to think about buying yourself a disability policy (all things you learn the hard way!!).
- Decide on which legal structure is best for you – LLC, S-Corp or C-Corp?
- Do you need to go into an office or can you start up from home? Where I live, there is an ordinance prohibiting home based businesses. Consider getting an office in a shared space rather than signing a lease. We started our first year with 2 offices in a Regus facility, then graduated our second year into a larger leased space.
- Figure out who is going to do your books, file your quarterly taxes, etc. Accountants cost money – but it is money well spent to have a good accountant advise and guide you.
- Will your business model require legal advice? If so, this can get expensive.
- What kind of software will your business need to operate? We had to purchase specific software to run the temporary staffing business division.
- Who is going to manage the office if you are out selling? New business owners often don’t have the luxury to hire staff at the beginning.
- What about social media, a website, branding? Who is going to handle this for you?
So, if you are not scared by all of the above, you might just be the person who can have their own business and be successful. I always say that the worst day working for myself is still better than the best day working for someone else! I love the fact that I can come up with new ideas and implement them it they make good business sense.
I really hope you get to live your dreams!
As always, happy hunting!