Look who’s in charge now.
You can be your own boss — just let that sink in for a minute and then imagine it. The benefits of being your own boss are amazing. You set your own hours. You don't get hung up in committees. You decide your own dress code. And most importantly, you follow your dream.
Whether you want to start working as a freelancer out of your home or create a brick-and-mortar store, starting your own business can be remarkably rewarding. It's also really hard work that is laden with pitfalls if you aren't careful.
Learn how to start your own business with these tips for beginning entrepreneurs.
1. Follow your passion
If you're going to take the leap and start your own business, it's going to take a lot of energy, time, and money. The best way to keep yourself motivated through the ups and downs is to do what really matters to you. Buying the first affordable business that comes available just because you want to become an entrepreneur is a recipe for disaster. If you take immense joy in building birdhouses or selling cookies, do your research and go all in. There's no promise that it will work, but when you follow your passion you know you'll give it your all.
2. Do your research
Okay, now that you have decided what your passion is and how you want to pursue it, you need to do some research on how to start your own business. There are a lot of things to consider: Who will your customers be? How will you get supplies? Does this type of business make a profit in your area or do you need to be strong online? Before you throw everything you have into your new business, you need to take an honest look to see if it is a viable idea. This is especially important if you're trying something new. If you are purchasing a franchise, there should be a lot of material ready for you from the parent company.
Go beyond the books and talk to someone who has started a business similar to what you want to do. What were their biggest issues starting out? Frequently, it's the things you never thought of that can hold you up. Ask someone who knows and can help you start out clean.
3. Develop a business plan
Once you've run the numbers and you're confident that it's a great idea, developing a business plan is the next step. A business plan is your blueprint for making your business successful. It lays out your business concept, how you fit into the marketplace, and the details of how your finances will work.
Your business plan is essential if you are going to need investors or a bank loan because they'll want to see that you have thought things through. Even if you don't need financing, a business plan is a great way to understand how your new venture will succeed and what issues you could face.
4. Have a one-year plan
For most businesses, the first year is spent getting things up and running, from getting the proper documentation and licenses from the government to finding your location (if needed). Even once you open your own business, it's rare that a business hits the ground running. It's okay. Develop a plan for the goals that you would like to reach in your first year of business. Keep your sights optimistic, but realistic. Your inaugural year can be a dangerous one if you make mistakes. When December comes, you can assess your business plan and see if you're on the right track.
5. Have a five-year plan — and a 10-year plan
While survival might be a sufficient goal for year one, that can't be the situation for long. You need to think about where you want your business to be in five years and so on. Will you need a bigger space? Do you want a better location? Are you going to need to hire employees?
Figure out just where you want this business to go and plot out your route to get there, step by step. Setting goals every five years helps you measure your success as an entrepreneur and as a business.
6. Consider your time management
Let's pause for a moment and remember the “self” in self-employed. When you work for a company, you might punch in and punch out — it's clear and simple. These are the hours you work; the other time is yours.
That's not the case when you are an entrepreneur. When you are trying to build your passion into a lasting business, it can be easy to lose track of your time management and get sucked into your business 24/7. Think about your family. Consider your friends. What other obligations do you have in your life? Decide how much time you can spend working on your business and hire help if necessary.
7. Hire cautiously
Few things can sink a business faster than poor quality employees. It's always better to tough it out short-handed for a while than it is to hire haphazardly. Look over applicants' credentials carefully, scope them out online to see if there are any red flags, and make sure that they can embrace your passion for your business. Remember, they could be the face of your business when you're away, even for a day.
Bringing in friends and family? That's fine as long as everyone knows what is expected of them and how they will be compensated. But again, only bring them in if they can be a boon to your business. Never hire someone just because you are connected by blood or friendship.
Also, you should know your legal obligations as an employer before you hire someone. It could affect your business in many ways.
8. Understand how your taxes work
It's easy to get caught up in the excitement of starting to work for yourself. The freedom, the fulfillment, and the feeling of building something can be intoxicating. But, like it or not, taxes will play a big part in your business. Break it down as thoroughly as you can and develop a plan to stay ahead of your taxes. If it's more complicated than you want to handle, hire a pro to help you out. There's no way to know too much about your tax obligations. The last thing you want is to get blind-sided by the IRS.
9. Have an exit strategy
So far it sounds like starting out working for yourself is a lot of tedious work. It can be. But, here comes the fun part. Think about your five and 10-year plan. Now imagine that everything goes extremely well. Your business soars and is successful beyond your imagination. Congratulations!
Now what? Do you want to continue the business until you retire and pass it down to your children? Are you hoping to find someone suitable to take over and keep it going with your vision?
What about a buyout? There's nothing wrong with setting your price and deciding that when the time comes and someone makes an offer you'll take it. You can take that money and start something new or just relax and retire early.
Keep in mind how you want to leave your business and, if necessary, start working towards that end as early as you can in your business plan.
If you dream of working for yourself, stop dreaming and start doing something about it. Millions of people have become entrepreneurs before you and many have succeeded. Why can't you be the next one? Follow these simple tips and you should be on the right track to shaking off that employee label and calling yourself the boss. Sounds good, right?
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