Being self employed and your own boss is a dream of any entrepreneur. Before you decide to leave your stable 9 to 5 job, you need to think if you have enough cash saved up before your new venture will be able to support you.
Statistically stating your own business is a risky affair and only around 50% of new status will survive through 5 years. It is always a good idea to accept that starting any business is a risky affair.
Before you leave your job make sure that you are financially prepared for the road ahead. Here are a few things to think about before you take the leap and start your own business.
Make sure you have healthcare insurance. If you leave your job this might also mean that you will also have to give up on your health insurance plan. Once again, it is a good idea to have enough funds saved to cover your health insurance plan knowing that it might take six months to a year before your new venture produces enough cash flow to cover your medical insurance.
Ask yourself if there is a Plan B. Starting any business is risky and if you fall into the 50% that fails, you will need a Plan B. Make sure that if you are in an industry that requires state licensing, make sure you keep this up-to-date.
Make sure you can cover all your fixed expenses. When leaving your stable 9 to 5 job will still mean you will have to continue to cover all your fixed monthly expenses. Before leaving make sure you have enough money to cover things like your mortgage, utilities and transportation expenses. When starting your won business the last things you need is to more stress and a whole lot of unpaid bills hanging over your head.
Have save enough money for emergencies? Before leaving the security of a stable job and income, make sure you have an energy fund stashed away somewhere. This emergency fund is notably for a true emergency but also might come in handy if your venture goes through some hard time or even worse fails. before starting your own venture it is a good idea to have at lest six months of savings stashed away to cover any sort of emergency.
Make sure to factor in a savings plan when you start your venture. When starting your own business make sure you factor into your business plan a retirement plan. Saving money for retirement when you are no longer an employee is a whole lot harder.
To improve your chances of success make sure you ask yourself all the right questions honestly and prepare a realistic business and financial plan. Ask yourself the following questions:
Can you persevere and get through tough times?
Do you have a the desire to be my own boss?
Do the judgments you make in life generally turn out well?
Do you have an ability to conceptualize the whole of a business?
Do you possess the high level of energy that is sustainable over long hours?
Do you have significant specialized business experience?
Do you have the qualities like willingness to sacrifice, interpersonal skills, leadership ability, and optimism to succeed in your new venture.
Why are you starting a business?
What kind of business do I want?
Who is my ideal customer?
What products or services will my business provide?
Are you fully prepared to spend the time and money needed to get my business started?
What differentiates my business idea and the products or services I will provide from others in the market?
Where will my business be located?
How many employees will you need?
What types of suppliers do I need?
What will your start-up costs be?
Will you need to get a loan?
How soon will it take before my products or services are available?
Who are your competitors?
How will I advertise my business?
Starting your business and entering the world of entrepreneurship can be the best thing you will ever do but it can also the biggest nightmare.