The recent events of a global pandemic and increasing changes to our economy and business have had many re-evaluating their personal and professional lives. Many are choosing to shoot for the stars, chasing dreams that had been dormant for a time, and as they set out on a path to entrepreneurship, many have unrealistic expectations about what will transpire as they transition from a 9-to-5 to being their own boss.
With more than 4.3 million applications for new business last year alone, it seems that everyone is getting on the start-up business bandwagon. However, before you bid your co-workers adieu, think about how your action steps today will affect your long-term success tomorrow.
Get your money house in order
It takes money to start a business! Deciding to leave behind your steady job and benefits is risky business, and something you shouldn’t do without proper planning. If you were contemplating making a move, do it the smart way. Get your money house in order so you can weather the changes that are certain to come for you and your loved ones. Take these steps and look forward to long-term success:
Create a business plan. Writing up a business plan can be as simple as filling in a pre-made template to get your thoughts down on paper. A failure to plan your next move is a plan to fail–looking at your short and long-term goals will give you a good idea of where you need to put your energy to ensure success.
Clean up old, outstanding bills. It’ll be hard to get ahead when you have old creditors and new clients both knocking on your door, asking for money. It will be significantly harder to manage all of this if you don’t have a steady source of income coming in during your first few months in business. Do what you can to clean up old debt before jumping ship, and then you’ll be able to focus your energy on building up a positive credit history with new clients and vendors.
Separate “church and state.” Many new business owners mesh their personal and professional finances, borrowing from one pool to pay another. This is risky business, and depending on how you set up your corporation, you may risk losing your personal assets if you are unable to make things work. Talk to a financial advisor about the best way to separate your personal finances from your professional expenses and keep impeccable track of each to avoid that gray area where money gets lost and you can’t figure out why you’re not making a profit.
Save as much as you can. Most start-up businesses are lucky to break even in the first few years in business. If you have a family, how are you planning on pulling them through this time? All expenses must be accounted for; the last thing you want to do is live on extended credit while you’re trying to make a name for yourself. As you think about how you will finance your start-up, add in the cost of sustaining your family for at least the first year. Everything from housing to food to clothing and beyond should be accounted for to minimize stress and allow you to concentrate on business building.
Budget, budget, budget. Things will be tight at first…..plan on it. Accounting for every expense will keep you from unwelcome surprises and additional bills that can derail your business plan. When thinking about what you’ll need to pour into your business, consider adding the following expenses to your budget sheet:
Operating costs
Marketing
Employee salaries and benefits
Inventory
Rent/utilities
Tax preparation/financial advisor services
While it may stretch you to your core, consider hiring someone to help you keep track of the books while you get on your feet. The money you pay to have financial peace of mind is well worth it, considering you’ll have your mind free to focus on business building.
6. When in doubt…wait a little longer. You’ll know it’s the right time when all the pieces fall into place. It may be tempting to jump into something that you are passionate about, but you have your well-being and that of those you love at stake here. You must plan and prepare for your significant lifestyle change before moving toward one of the most exhilarating experiences of your life. Are you ready? It’s time to evaluate!
Try us on for size!
At MaxGroup Business Solutions, we have the knowledge, tools, and success record to take your business to the next level. We know what it takes to start a business and make it grow and thrive, exceeding your wildest expectations. Cutting-edge marketing techniques, solid business-building strategies, and a passion for your success ensure that you achieve your business-building dreams. Don’t wait a day longer to reach for your own stars; visit www.maxgroupbusiness.com for more information.