What You Need to Know Before Becoming an Entrepreneur
By next year, it’s estimated that more than 27 million Americans will leave the traditional workplace to start their own businesses. And according to Forbes, half of the American workforce will consist of freelancers by 2027.
What does that mean for you?
If you’re thinking about becoming an independent contractor or starting your own business, you’re in for some stiff competition. Besides having a great product or service there are other aspects of working for yourself that you may not realize. With so many others taking the plunge into self-employment, you’re not going to make it on a niche product and your sparkling personality alone. Starting your own business is tough. Whether you’re planning a startup, going into direct sales or becoming a full-time freelancer or independent contractor, there’s a lot of research and planning you must do to make sure the odds of your success are high. Not only that, but you also have to think about the effects it will have on you and your family from a time and money standpoint.
Here are some aspects to think about as you decide whether starting your own business or going freelance is the right choice for you.
1. Create a business plan.
Seriously, this is one of the first steps you need to implement if you’re remotely serious about starting your own business. A business plan serves as a guide to how you’re going to approach your new endeavor. Though it’s not meant to be the end-all-be-all document for how you run your business, it is a roadmap to help keep you on track as you set your business goals and to brainstorm ideas for how you want to run your business. If you’re starting your own company or business and will be applying for loans, a solid business plan is required. Even if you’re simply thinking about freelancing or getting into direct sales, a business plan will help you realistically plan for what to expect.
Aspects you should include in your business plan are:
- Your company overview
- Your business structure
- Goals and objectives
- Available and potential business resources
- A marketing overview
- Your target audience
Other things you should think about when developing your business plan should include your mission statement and values, your business, an overview of the industry you’re thinking of entering and your relevant experience. The Balance Careers has a more in-depth guide on starting a business plan.
2. Be Mindful of unforeseen expenses.
Starting your own company can be expensive. If you’re going the startup route or opening your own storefront, you’ll most likely apply for a bank loan. But even if you’re freelancing or going into direct sales it’s essential to have a strategic financial plan outside of the obvious aspects such as renting or leasing space, supplies, and salaries. For example, if you’re striking out on your own with your freelance services, it’s best to establish a savings account—a nest egg, if you will—beforehand just in case business isn’t as profitable as you expected it to be. That way, you are still able to pay all of your bills when money isn’t coming in from your business.
Other expenses to keep in mind include money for:
- Social media, TV, and online marketing
- Website fees and maintenance
- Catalogs and brochures
- Business cards
- Direct sales starter kits
- Cost of expired products
- Membership fees
Having a thorough accounting system covering every foreseeable and unforeseeable financial aspect of your business is absolutely essential to the health of your business and the wellbeing of your family.