Complaining about working the 9-to-5 grind is something many people do incessantly. Complaining, however, never changes anyone’s position in life. Action, on the other hand, could set preferred changes in motion. One action disgruntled and underappreciated employees may do is start their own business. Taking a life-changing initiative certainly deserves praise. That said, even the most motivated shouldn’t venture into the business world without serious thought. An entrepreneur must consider all the costs and responsibilities associated with striking out on his or her own.
Quitting a job and rushing a new business into the marketplace isn’t likely the best plan of action. Deliberate thought must go into any plans to leave the steady paycheck of gainful employment for the uncharted waters of running a new business. Here are things to think about:
The Costs Involved
Starting a new business can be expensive. This is especially true when the business requires purchasing significant inventory along with the other expenses associated with running a storefront. Home-based businesses may obviously be less costly. Home ventures do not, however, without costs whatsoever. Anyone planning on launching a business must accept the fact monetary expenditures can’t be avoided.
Adherence to a smart budget becomes necessary, too. In order for anyone to survive in business, a venture must run lean. Unfortunately, there are expenses that cannot be removed or else the business will not be able to function. Budding entrepreneurs you choose not to spend on vital components find themselves undermining the cause.
Cash flow won’t exactly roll in immediately, either. A certain amount of time may be required in order for the business to generate enough cash to break even much less generate profits. These economic truths about a new business must be considered prior to quitting a current job.
Where will the money come from in order to actually start the business? A loan might be the necessary source. Without huge cash reserves, financing the endeavor might be required. This could be the case even with low-budget ventures. Banks may not always be willing to lend money to start a business. Still, it makes sense to look around at various lenders to find someone willing to issue a loan or line of credit.
Borrowing alone cannot be the only source of funds to draw from. Long before quitting your job, you may wish to start putting money away in savings. Such funds will turn out the important since income may be limited. Relying solely on your savings could be a disastrous decision, though.
Procure an Additional Source of Income
While it may require more work beyond the responsibilities necessary of starting a new business, taking a second part-time job might be unavoidable. Entrepreneurs need an income or else they find themselves running into financial jeopardy within a short period of time.
Unless you are ready to take on that large of a workload, you may wish to wait a little bit longer before quitting your current job. Financial considerations cannot be ignored and fate shouldn’t be cast to the proverbial wind. Too much is at stake from a fiscal perspective. Starting a new business comes with personal net worth risks. Added income streams may offset some of the risks.
New Expenses Emerge
Money is not the only thing to think about when weighing options to the launch a new business. Since you won’t be using the tools and resources an employer provides, you must spend money to acquire them. If you need an exceptional computer to perform daily tasks, the $1400 to pay for one must come out of your own pocket.
Other expenses will become your responsibility as well. Leaving your current job may require purchasing your own health insurance policy. Performing an appropriate health insurance comparison could lead to finding better rates with appropriate coverage.
The key point understand here is launch in your own business requires absorbing certain costs. The costs may be eventually paid back if the business turns out to be a success. Careful budgeting and hard work become the unavoidable combination required for achieving results.
by: Sia Hasan