If you’ve been wanting to start your own business for a while, there’s no time like the present. However, you should think through a few scenarios regarding your current job, your financial situation and the company itself before making the leap.
Quitting your day job to sail off into the sunset of entrepreneurship may be the dream, but it might not be the best path to success. You may want to consider hanging onto your job for a few months or even years while you get your business up and running. There are a few good reasons to do this. When you do not have to focus on earning a living right away, you can instead put your energy toward marketing and making contacts. You can put the money that you make back into the business. Of course, there are drawbacks as well. You may not be available during regular business hours to run your company, and you may have very long workdays as you try to essentially juggle two jobs. Only you can be the judge of what option is right for you and your situation.
If you’re limping along in debt, behind on your taxes and don’t really know how much you’re spending on a monthly basis, it’s not the best time to start a business. You need to get your finances in order before you proceed. Even if your financial situation is in pretty good shape, you may want to look at where you can simplify and save. For example, if you are paying off student loans, this doesn’t have to stop you from starting a business. However, you may want to look into refinancing with a private lender. You may be able to combine all your loans and make one payment that saves you money on your monthly expenses—and saving money might be a priority for you right now.
It’s important to think through the specifics of how you will run your business, who your customer or client base will be and how to market to them. Even if you are not planning on seeking loans or investors, it can be helpful to write up a business plan. You may also want to plan a meeting with an attorney to ensure that you have any necessary paperwork in place and to discuss what type of business entity you should be, such as a sole proprietorship, a partnership, an S-Corp or a limited liability company. Another thing to consider is whether you will need office space or a storefront or if you can work from your home. In the latter case, there may be zoning issues to consider. Meeting with an accountant might also be useful to talk about such issues as when and how to buy equipment to maximize your tax deductions. You may want to think about whether there are tasks you want to outsource, such as bookkeeping, even if your business is a very small one. You can hire a virtual assistant if you only need help on some tasks a few hours per week.