Steps to Determine If You Are Ready to Open Your Own Business

Determine If You Are Ready to Open Your Own BusinessThe following is a guest post. If you’re interested in guest posting, check this out.

If you are working for “the man” at a 9 to 5 job, you may dream of nothing more than venturing out on your own and being your own boss.  This is the true American dream, and in this age of the Internet, it has become a reality for many people.

However, before you up and quit, take some steps first to guarantee your success.

Do You Have the Cash?

Before you branch out on your own, having an ample emergency fund is a good idea.  Ideally you should have 8 to 12 months of living expenses in the bank.  Then, if you have a harder time in the beginning making money, you will always have your emergency fund cushion.  If you don’t have an emergency fund, you could feel desperate about your lack of money.  Desperation tends to repel jobs rather than attract them.

Do You Like to Sell?

You may not consider yourself a salesman, but if you are self-employed, you need to market both yourself and your business.  Entrepreneur says, “As an entrepreneur, you work in sales.  You will have to sell your products, sell your vision for the company and sell yourself.  And you will have to do this every day, multiple times.  And you will enjoy it-that is if you are suited to be an entrepreneur.”  If you don’t like to sell and market yourself, self-employment may not be the right business for you.

Have You Already Started Selling?

Ideally, before you make the leap to self-employment, you start your business on the side and work part-time in your spare time, especially on evenings and weekends.  That will help you understand if you have a worthwhile idea that can make money.  If you start to make money and find business growing, you know you are onto a worthwhile idea that you may be able to pursue full-time.  Don’t be surprised if you spend a year or two grooming your business on the side before making the leap to full-time.

Do You Understand How to Establish a Business?

Once you decide you are ready to quit and work for yourself, you need to make sure you understand what is required to start a small business.  There are many steps you must take before you ever start the business such as creating a business plan to guide your business’ growth and finding funding for your business, if necessary.  Once your business is open, you will also need to hire an accountant and a tax professional.  You may need a lawyer, too.

Many dream of starting their own business, and many have done so and are now happily working for themselves.  The key to successfully launching your own business is to take your time.  Start the business on the side first and make sure that you have an ample emergency fund to handle any period when you may not have enough funds because that time will certainly occur, especially in the beginning.

 

Kyle Taylor is a personal finance blogger that writes at The Penny Hoarder, a daily blog with 100’s of weird ways to make money.

 

Image Credit: http://www.flickr.com/photos/julochka/5432587341/


Comments

Steps to Determine If You Are Ready to Open Your Own Business — 1 Comment

  1. Very nice overview. One quibble would be that those contemplating this move should see a business/corporate lawyer and an accountant BEFORE they do anything. I cannot tell you how many new clients call me after the fact and have some real gaps in their plan or have set up the wrong structure.

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