With unemployment in Illinois at 9.8% and getting a job for still a major challenge for many, is it time to start your own business and skip the job hunting all together? This is what some people are doing. It may be the right choice for you but you need to make sure you consider the following before you use your life savings to start your own business.
Here are some things to think about before you embark on this adventure:
(1.) Make sure you are adequately funded before starting a new business venture. There are many hidden costs when starting a company that can bury you in debt. Make sure you have enough money to operate your business while you develop a client base. Developing a sustainable business always takes more time and money than anticipated. Get a SBA loan or a loan from your community bank or bring in investors in addition to your own savings.
(2.) Create a one, three and five year business plan before you invest any money into a business. It will force you to think through what your business is and whether there is a market for your company, where you can make a living. Many concepts are great, but you need to ask yourself, Can I make enough money to justify my investment? This is not the fun part of starting a business, but is what will “make or break you.”
(3.) Do your homework. Read, ask, and analyze all the information you can about your business concept before you invest in your company. You need to know your competition and what need your company will fill in the marketplace. You have to know this to be successful.
(4.) Create an Advisory Board of professionals in your chosen business. Listen to them for they are there to help you succeed. You need their unbiased opinion and expertise.
(5.) Don’t put your entire life savings into your new business. It is an enormous risk and making that money back is difficult, if not impossible. Invest in yourself, but only use a portion of your savings, not all of it. So if things don’t go as planned, you still have assets left to regroup, without risking your home and becoming immersed in debt.
Most new businesses take at least 18 months to become a success. Many businesses fail. But, if you think you can deal with these odds and follow my advice it may be a great alternative rather than waiting for a hiring manager or recruiter to get back to you for an interview. Sometimes we all need to take calculated risks to get us to the next level in our career and life.