A recent report claimed that a North American with his or her own business usually earns five times more than a person who works for someone else. In an economy rocked by recession, when employees are worried about whether they will have a job next month, this is heartening news. Starting your own business is not tough, but it does require dedication, hard work, planning, financial input, expertise, and some luck.
Self-employment is the most effective way to become rich. Not all businesses start bringing in profits immediately. You may need to wait for weeks or even months before the bottom line starts improving. Once the business is established, however, what you earn is limited only by how much time you can give to it and how many risks you are willing to take.
Don’t Put All Your Eggs in One Basket
A business involves some amount of risk. Businesses fail. Profits dip. Investments do not give returns. But your fulltime job may not be safe, either. You are working for someone else, building their business, spending 50 hours a week at the workplace, yet there is no guarantee that you will be spared the axe in the next round of layoffs.
The best way to start a business is to test the waters first. Don’t hand the resignation letter to your employer right away. Work after office hours and on weekends to build the business. Take a few days off your regular job, if required. Use this time to network, find mentors, find investors and create a business plan.
Establishing a Stable Business
First, you have to make sure that your current income levels are safe even as you work towards building a robust business. Next, you need to make sure the business you are building is equally safe. Generally, you should start your own business only if you have a passion for what you do and know the pro and cons involved in it. If you are going to start a software consultancy service, you need to know a lot about software, have a degree in computer sciences, and have practical experience in handling client demands.
Savings and Insurance
Take stock of your savings and non-paycheck sources of income. Can you live on that while your business develops? What about your dependants? Health insurance is always a big issue for people without regular jobs. It is possible to find other like minded people to take out group health insurance, which is far cheaper than individual insurance. If your spouse is employed, his or her health plan might cover you and the rest of the family.
Age, they say, has nothing to do with how successful you can be in your business. However, age has a lot to do with insurance. If you wait until you are in your 50s to start a new venture, you will find it tough to make insurance payments in the interim. Insurance premiums increase as you age. This is another reason for you to start your business as soon as possible.