Thinking of starting your own business? You are not alone. According to research, small businesses, defined as fewer than 500 employees, produce more than half of the non-farm, private gross domestic product. In addition, about half of all employees in the private sector work for small businesses. Small businesses with fewer than ten employees provide the majority of jobs in the small business sector.
So if you’re ready to work for yourself and add to the economy, I applaud you! However, there are some things you need to know before you get started.
Whatever product or service you will be selling to your customers, it is best if it is something you are personally passionate about.
There will be times in your business when you are ready to quit because of how difficult it is. Begin passionate about what you are doing helps you get through those rough times.
Do your research.
Just because you are passionate about your product or service doesn’t mean your potential customers will find it valuable and be willing to pay for it. Utilize the services and information provided through your local Chamber of Commerce and through the Small Business Administration to help you with your research. These organizations can also help you as you move forward with your business.
Smart small.
Don’t quit your day job until your small business is providing enough net income to replace the income from your regular job. Remember to consider income taxes and other taxes you may have to pay. Also, don’t forget to think about the benefits offered by your employers such as health insurance and retirement plan contributions. You will need to have enough income from your small business to cover these expenses.
Be honest about your own capabilities.
Having a great idea for a business doesn’t ensure that you will be great at doing all the tasks it takes to be successful. You may need to look at outsourcing some functions such as accounting, human resources, and business management.
Starting your own business is a big decision and one you shouldn’t make before doing a lot of research and soul-searching. If you don’t, you could end up with a stressful and struggling business or, in the worst-case scenario, starting a business that will fail.
In the next few weeks, we will continue our discussion on starting a business by talking about other considerations such as entity selection, accounting, and tax implications. I hope you’ll join me on this journey!
Have questions about starting your own business? Please reach out so we can chat more!
