If you’re one of the 58% of Americans who have considered starting a business but don’t know how to proceed, help is at hand. The following steps will show you how to transform your dream of business ownership into reality.
1. Figure out what you want to do. You’re not alone if you know that you want to work for yourself but aren’t yet sure what exactly you want to do. Start by making a list of your interests, talents, and skills. Talk to your family and friends and begin brainstorming ideas. The sooner you begin your quest, the sooner you will find the answers.
2. Start saving now. It is wise to have at least one year’s worth of living expenses in the bank before you quit your day job. It will take time to make a new business profitable, and it could take longer than you expect. Start saving now so you can be prepared for the worst while you hope for the best.
3. Educate yourself. You can take classes through your local Small Business Administration (www.SBA.org) or seek free small business counseling from the Service Corp. of Retired Executives (www.score.org). Business books and magazines are also essential, and so are industry-specific trade associations.
4. Utilize a checklist. There are many tasks involved in starting a business and using a checklist will help you keep your priorities in order. Take it a step further by adding target completion dates to each task.
5. Formulate a plan. No matter what business you decide to start, it’s crucial that you outline a plan for success. A formal business plan is best, but at the very least begin by mapping out your goals and ideas. Committing your plan to paper will help you anticipate the direction of your business and identify potential weaknesses.
6. Obtain licenses and permits. Business license requirements vary by state and county, so check with your county offices to find out what the requirements are for your area. In most cases you will pay an annual fee to renew your license ranging from $50 to $300.
7. Start part-time. There are numerous advantages to starting your business part-time. If you can find a way to keep your day job while you launch your venture, you will have the opportunity to test your business model and make sure it’s viable while you evaluate your passion for the business and determine if it’s something you would truly enjoy on a full-time basis. You can also reinvest any profits from the part-time venture into the future of the business, and may even be able to take advantage of home business tax deductions at the end of the year (talk to your accountant for assistance).
8. Dedicate the time it takes. Planning your business will take free time from your day, but if it’s something you want badly enough, it can be worth the sacrifice. You can get up an hour earlier, skip the evening news, or work during your lunch hour. This extra work time will also prepare you for the first two years of business ownership, which typically require long hours.
9. Develop a backup plan. Many businesses fail due to under-capitalization. Forecast the cash that you need for both your business and your living expenses and have backup sources for money in case you get into a jam.
10. Don’t take the leap until you’re ready. Before you even think about quitting your day job, make sure you have everything in place: a solid business plan, enough capital to make the business successful, a savings account to cover personal living expenses, insurance (medical, dental, liability and any other required policies), a thorough understanding of what you’re in for, a backup plan if things don’t go as expected, and the passion to make it succeed.
Unfortunately there are no guarantees in business. You could have a rock solid business plan but be hit with a natural disaster, new competition in your area, or other uncontrollable circumstances. As long as you don’t invest more than you can afford to lose and your business is carefully-planned, you can minimize many of the risks and increase your chances of success.