It is so easy when you have a great idea for a business to get swept up in trying to launch it. But is it the right decision for you? Not everyone benefits from investing time, money and relationships into a start-up. It’s important to think about what it could really mean to your life should you throw yourself into this challenge.
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Your family situation is an incredibly important consideration when starting a business. Remember, you are potentially risking all your personal assets. Should something go wrong, you need to know no one else is going to suffer for your gamble.
If you are married then your partner needs to be behind you 100%. If you have children, you need to consider the ramifications owning a small business will have on them. Will you be available for family holidays and days out? Will you be able to afford to send them to college and university? What about healthcare? If you have a family, these are all points you need to have worked out before you start your business.
Even if you are young and single with no assets to lose, you still need to consider you family and seek their advice. What will happen if you can’t make rent one month? Is there someone that will be able to support you should you need it? Maybe your parents would consider letting your live rent-free in their home while you plough everything you have into the business?
Whatever your situation, you need to know that your family are behind you and that you have a strong support network.
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Do not underestimate what a commitment this is. Yes, your boss isn’t going to mind if you leave at three to get the kids, but your clients might. A new business requires a huge investment of time to get it off the ground. You need to consider realistically whether you are happy to work evenings and weekends for months in a row.
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Funding a start-up is no small undertaking. Do not embark on this journey unless you know how you are going to fund it and what your contingencies are. If you will need to hire contractors or employ staff early on, you have a responsibility to ensure these people are paid for their work.
You also need to think realistically about the amount of revenue the business is likely to bring in, particularly if you will be making loan repayments in the first year. Do your research and make sure you don’t commit yourself to payments you can’t afford.
It is also important to consider the fact that you might not make any money in the first year. That is not to say the business will fail, just that it will take awhile to build brand recognition and a loyal customer base. Think about how much money you personally need to live on. Are you willing to make sacrifices for a few years whilst the business gets established? Owner salary is one of the easiest cuts to make but if you are not willing to take a hit or reduce your standard of living, starting up a company may not be the right option for you.