Owning a home used to be “American Dream.” However, this long-standing goal that so many aspired to, and ultimately reached, has been replaced with a new goal -- becoming a business owner.
At first glance it sounds perfect: Leave corporate world behind and become an entrepreneur. No more commuting, office politics, difficult co-workers and demanding supervisors. You’ll be your own boss and reap all financial rewards. It will be a brand-new lifestyle with incredible opportunities and much less stress.
Others have achieved new “American Dream.” Look at young kids who started Apple on a shoestring in late 1970s. Don’t forget two engineers who launched a little company called Hewlett Packard out of a small backyard garage. Mrs. Fields took a cookie recipe -- of all things -- and built it into a national model that is taught in many business schools.
Why not you? Yes, you could have next great business idea, but that alone might not be enough. Ask yourself, do you have right stuff to launch and run a successful business? Here are five questions to consider before making big leap from a steady paycheck to business owner.
1. Are you a self-starter? With no one looking over your shoulder, it’s easy to procrastinate. You must have discipline that is needed to plan, set goals and stay focused.
Since many small businesses initially start out as home-based to keep overhead low, working from home brings additional distractions. Can you resist temptation to eat cookies and watch reruns of “Law and Order” when you should be making marketing calls?
2. What are your expectations? If your goal is to work fewer hours and feel less stress, then think again.
The U.S. Small Business Administration estimates that business ownership requires a tremendous commitment, with 12-hour workdays, often seven days a week. Needless to say, this can be a strain on family life. If you think it might be too much, then consider a job change or a new career with an established company rather than launching your own business.
3. What are your financial goals? In short-term your income will probably be lower, and it could stay this way for a long time. Additionally, no one pays for vacations, health care plan, profit sharing or stock options. You must set up your own retirement plan as well.
The U.S. Small Business Administration offers some sobering statistics. It reports that half of small businesses started will fail within first year. Furthermore, by fifth year 95 percent will have ceased operations. While reasons for failure vary, one of most common is a lack of adequate financing. To beat odds, meet with an independent accountant to honestly discuss your finances and expectations. The good news is that if your business takes off you will reap financial benefits.