Being self-employed means making your own hours, being your own boss, and getting to make all of the business decisions on your own. In essence, it sounds like a dream. With the economy in its current state, many people are making that dream a reality and starting their own businesses.
Being an entrepreneur, though generally worthwhile in the end, does require certain sacrifices in the beginning. Though you can dictate your own hours, here are four things to consider before quitting your day job in favor of self-employment.
1. Business Plan
Before you start up your own company, you need to be prepared. What is it you plan to do? Is it possible to do now? How profitable do you believe it will be? These are important questions to dissect before beginning your venture; otherwise you could wind up in financial trouble. Although most people ordinarily have an idea about what they would like do self-employed, in many cases, the buck stops there—literally. Being too hasty by quitting your regular job for an ill-equipped idea will lead to a financial disaster.
Research what industries within your expertise are profitable, what are new up-and-coming industries, such as outsource medical companies like BioTrackTHC, and what industries sound interesting to you. Once you determine a viable business, create a business a model, get a feel for the market, and decide if you can do the venture on your own, or will need a partner.
2. Financial Support
Since most businesses do not turn a profit until at least the second year, you will need to find financial support to start the company and keep it afloat, as well as support yourself.
New businesses are expensive, and one of the best options is to find a financial backer such as a bank, lender, or investor. Other options include using an online fundraiser such as Kickstarter or Go Fund Me, asking family for support, or tapping into your savings.
Being self-employed is a big commitment—not only money wise, but also hour wise. As an entrepreneur, you will be putting in long, hard hours in order to see your business achieve success, especially if you are the sole business employee because everything from accounting to marketing to management is on your shoulders.
As an employee for a large corporation, you generally receive benefits such as health insurance, dental insurance, 401 (k)s, etc. As a self-employed entrepreneur, none of these benefits will be factored into your salary. Although this might not seem like a big deal, starting your own business either leaves you without any of these benefits, or adds paying for them onto your pile of bills. Now that you do not have the steady income you once had—at least not at first—you are faced with more financial hardship.
Although this might not be a deal breaker, it is something to consider before diving head first into your new business venture.
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