Whether you’re newly out of work or just looking for a change, becoming an entrepreneur could offer just the career challenge you’re seeking. However, starting a business is also a risky endeavor. Small businesses cost $30,000 to start on average, and half will fail within the first five years. That’s a lot of money to put on the line, especially if you’re like a lot of small business owners who tap into personal funds to start a business.
But while entrepreneurship is framed as high-risk, high-reward compared to the relative security of a full-time job, it’s possible to test the waters of small business ownership without gambling your financial security away.
First, Invest in a Good Business Idea
The biggest mistakes entrepreneurs make is failing to test a business idea thoroughly before taking it live. That’s why you should never skimp when it comes to business planning. While you might be eager to get your business off the ground, taking time to complete market research and test your business idea will keep you from sinking money into a business plan that’s not viable.
Save Money on Startup Costs
While brick-and-mortar startup costs tend to be well into five digits, a home-based business can cost less than $5,000 to start. That makes it a great choice for entrepreneurs looking to minimize their financial risk. Without high overhead costs, you can launch a business with less money and enjoy higher profit margins.
After physical space, labor tends to be the highest cost that business owners face. But you can save here, too. Hold off on hiring full-time staff and instead, use freelancers to fill your business’s startup needs while saving on payroll taxes. This is especially helpful for highly skilled jobs like branding or accounting that would be too expensive to hire a full-time professional. For example, instead of struggling to learn QuickBooks yourself, you can hire a QuickBooks bookkeeper to balance your books and show you the ropes.
Flirt with Freelancing
Freelancing isn’t just a way to hire help. It could also be a way to build your business reputation when just starting out. If you’re not ready to quit your day job, freelancing can help you build a client list on the side so you have guaranteed customers when you finally take the plunge. Just be sure that starting a side business doesn’t violate the terms of your employment.
Keep Rock-Solid Records
The hard work isn’t over when your business gets off the ground — in fact, it’s just starting. In addition to managing the day-to-day aspects of your operations, running a successful business requires careful record keeping. Record keeping allows you to determine what’s working and what isn’t so you can scale your business the smart way.
Record keeping is also essential for filing business taxes, applying for small business loans, and complying with employment laws. In short, if you want to get ahead in business, you need good records.
While record keeping can be time-consuming and tedious, it doesn’t have to be. Today’s small business owners have more record-keeping tools at their disposal than ever thanks to affordable business apps that help with everything from project management to payroll.
Register Your Business
When launching a business, to function legally, you’ll have to register your business. When deciding your business structure, consider whether you want a sole proprietorship or an LLC. The sole proprietorship is the easier of the two to form, and bestows full control to the owner. However, you’ll be liable for any debts or judgments, and this could affect your personal assets. An LLC requires a bit more paperwork, but this structure provides a safety net in that it clears you from being personally responsible for any financial obligations.
Starting a business of your own doesn’t have to mean risking it all. From starting your business while holding down a day job to running a lean, low-cost operation while getting off the ground, there are a number of things new business owners can do to minimize risk. While it may be impossible to guarantee success in business, when you take these steps, you’ll come as close as it gets.
If you’re preparing to launch a business in the near future, or if you plan to dive into the world of remote work, turn to Work From Home Jobs to find a WAH job, learn more about starting a business or even dive into stock trading.
Image via Pexels
Written by Guest Blogger: http://economymom.com
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