It can be nerve wrecking to consider starting a new business, especially when you have to leave your job behind, and if you’re supporting a family it can be an even more difficult choice.
Still, without risks there are no rewards, or so they say.
Ask yourself these questions to make sure you’ve considered all parts of the laborious process that registering a new business can be:
Do you have the capital to see it through?
One thing is to consider the price of a company incorporation, but te other is to make sure that continued costs of operation will not hinder the success in the long run. In other words, you need to make sure you have enough money stashed away for a rainy day, week or even month.
How much of a risk are you willing to take?
If you have children depending on you to feed them, perhaps you should not spend your life savings on that great idea your friends and you got last night. But without any risks at all, little is ever gained. Find out where the balance between risk and reward makes the most sense to you and your surroundings.
How much time will it take to make profits?
It’s not always that turning the “Open” sign will automatically lead to profits. Sometimes you need to build up a reputation, a brand an a userbase. This can take years, even when you are working 50 hours a week on it, so make sure to have room in your business plan for quick profits too. For an example, if you are building a new website, then it will take some time for visitors to find it once you go live, and you have to expect some months if not longer before you see any sales.
Is it worth taking a loan for?
There might come a time where you might need more money than you have to actualize your idea. Consider it wisely before going into debt, but once again: risk to reward.
What business type would it be?
Depending on your country there are hundreds of different types. Let us take how Singapore company incorporation works. There are private limited companies which means you as a private individual do not share the liabilities the company does. So if the company goes bankrupt nobody can come after your house for instance.
How much do you need for utilities and food?
Many people are worried that they will have to cut back on luxury items, but calculate how much money you need for surviving, and take it from there.
Is it difficult getting work if you fail?
A very important part of this is to never burn any bridges. You want to make sure you can go back to work if you fail your business, so it is not advised to break contract rules for instance.
Do you have previous experience?
Finally, do you have any experience in this field? And do you have experience with starting, growing and maintaining a business? If not you might need help sooner rather than later. Consider a consultation with someone you know that has his or her own business, an hour or two with an entrepreneur that is willing to share can be worth 2 years of school!
So risk it, or don’t – just make sure to register your company and follow your dream!