Tired of working for the man? Got a great idea that you think will make you a ton of cash? There are a lot of reasons to start your own business. After all, being self-employed offers freedom in both hours and direction. It gives you the opportunity for large profits and financial stability, not to mention liberation from the office politics that plague the average working Joe. Yes, owning your own business can be an extremely fulfilling lifestyle. But before you kick back with a cold one counting your soon-to-be-earned cash, consider this. You’ve got to have a plan, man! A good one. And then some.
Building a successful business from the ground up is no easy task. Blood, sweat and tears go into getting any business off the ground – not to mention time, cash and the ability to keep getting up when you’ve been knocked down.
Does that mean you can’t do it? Of course not. Just don’t expect it to be easy. If you’re serious about striking out on your own and starting a business, take these tips to help you succeed.
1. Do the research. Know the risk.
The bad news: a good percentage of start-up businesses fail within the first two to five years. The most frequent cause: lack of money. Though this might sound obvious, it doesn’t necessarily mean they failed because they lacked a profitable product or had a poor business plan. Just like in any aspect of life, unforeseen things can go wrong. You have to be prepared for the risk involved in starting a business and you have to do the research to strengthen your odds of success.
For starters, a solid business plan takes into account where you’ll be in six months, a year, two years and five years, and details how you’ll get there as well as how you’ll react to potential problems and possible successes.
Once you have that, compare the investment (time and money) with the end result. Will the amount of time you miss spending with your kids be okay with you if you hit your goals and can pay for their college educations? Will it be worth it if you fail? Only you can prioritize your life. Just remember that as a self-employed individual, you’ll work more – not less – than you do someone else’s employee.
Once you’ve created a viable business plan and weighed your priorities, if the potential pay-off is worth the time and money invested, then self-employment may be the gig for you!
2. Start small and work up
Now comes the good news: IBM wasn’t built overnight. Many of the most successful corporations began as little more than operations out of somebody’s garage. So, no matter how impossible the odds seem, you can make it happen.
One of the reasons people avoid starting a business is that they think too big to start. Striking out on your own doesn’t mean you need to rent an office space and get employees – especially in the internet age (though there are instances where help is necessary, see below). That’s stuff for down the road. While you’re still in the early stages, think small.
If possible, ease into self-employment by keeping your day job and working on your company during your spare time. If you have a skill that’s useful to someone who has skills you need (say you’re a graphic designer but need a PR person), consider bartering. Look for ways to cut cost early on without cutting quality.
Be careful about refinancing your home or borrowing from your retirement funds without serious consideration. As you become more successful, make the transition to full-time, self-employment.
3. Learn how to network. Surround yourself with success.
Consider joining the Rotary Club, local Chamber of Commerce or other organizations where you can meet and mingle with other businesspeople. Not only will you find customers for your product or service, but you’ll come into contact with people who have businesses that can help support yours. Even more, you’ll be able to discuss your new business with people who have already succeeded at doing the same thing you’re trying to do. If you’re building an internet business, join social networking communities. Get your product out there and make friends. After all, most people choose to hire people they like — since they’re going to be spending time together.
Likewise, when it comes to the things you don’t know how to do, don’t cut corners. You can clean your own workspace, but you might not be able to negotiate your own contracts – and even if you think you can, you might be wrong. Know when to take risks and when to outsource.
Too many people with new businesses try to save money by performing all of the tasks needed. This can take a lot of time and result in mistakes that wind up costing more than the fee would have been in the first place. If you need an attorney or an accountant, get one.
4. Learn to relax.
With all this talk of hard work, this may be a little tough to digest, but relaxation may be the element that sets you ahead of your competitors.
Sure, you have to work hard to reap rewards, but if you don’t find time to collect your thoughts and re-energize, your work will suffer. Repeatedly extending work days will lead to mistakes and a feeling of being endlessly frazzled. You will not meet your goals – and then you’ll beat yourself up for it because all you’ve been doing is working!
When you plan, be sure to build in time where you take care of you – whether it’s golfing, chilling out by the pool or spending time with your family. All work and no play doesn’t just make you dull, eventually it makes you dumb – and numb – two things no successful business person can afford to be!
5. Remember your goals
In the end, as you’re working toward success, don’t forget why you began your own business. Things may get hectic, or they may be interminably slow. Whatever happens, return to your original goals – and you may need to revise them. But if you’re running into the sort of financial rough spot that makes striking out on your own so tough, think back to what brought you here. Making more money may not have been the only, or even the main, reason you chose this route. Perhaps you wanted to spend more time traveling. Maybe you have younger children who need a parent around during normal business hours. Or you might just have decided that after waking up at dawn for several years, you weren’t much of a morning person after all.
Just because your business may not be making as much money as you’d hoped at first, doesn’t mean that there aren’t additional benefits to self-employment that make it a worthwhile endeavor in and of itself… Nor does it mean that you won’t make more money down the road. Rome wasn’t built in a day – and whether you work for someone or for yourself, you are the sole contractor of your own life.
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