Assessing the Risks of Starting a Business
There are great rewards in being the boss and running your own business. However, to reap the rewards, every entrepreneur has to take a few risks. Before you dive into the world of independent business ownership, take a minute to assess the risks.
The sacrifices every entrepreneur must make
Your passion and industry insight is going to play a big part in the success of your business, but passions don’t pay the bills. There are startup costs and costs of running the day-to-day of a business, and no amount of insight or dedication to your new business is going to replace cold hard cash when it comes to paying for the certain expenses of starting a business.
Dipping into your personal savings
The thought of being independent is liberating until you realize that you’ll have to let go of your steady paycheck.
Unless you have an angel investor or another source of external funding, you’re going to have to dip into your personal savings. Putting up the starting capital for a business is the scariest part of going independent.
Even if you manage to crowdfund some startup capital, most entrepreneurs will have to put up some of their own funds, and that is not something that should be taken lightly.
If you have a family that is counting on your paycheck or your savings aren’t solely your own, you have to talk to your partner and your family to make sure that everyone is comfortable taking a risk with your personal finances to start a business.
Dipping into your personal time
Once the safety net of a steady paycheck is gone, you have to work hard to make sure that your sacrifice pays off – or pays you back. That means putting in a lot of hours. If you thought that being the boss meant long lunches and leisurely work hours, then you’re in for a big surprise.
For one, you may be the sole proprietor of your business, or you may have a tight-knit circle of a few trusted employees. Either way, most of the workload is going to fall on your shoulders. You’re not just the boss; you’re the assistant, the office manager, the employee, the accountant, and finally, the boss. Every job takes time, and starting a business takes time. You need to be prepared to work harder and longer hours than you’ve ever worked before.
Giving up your personal time to start a business is almost unavoidable, so make sure that you and your family are prepared to make that sacrifice.
Become an independent business owner
Affordable American Insurance has helped entrepreneurs in Colorado, Arizona, and Utah maximize their potential and become independent business owners.