All You Need to Know About Making Self-Employment Work

Many of us have dreams of owning our own business. Considering the fact that doing so often allows owners to make their own hours, pick their own staff, and do what they love, why wouldn’t we dream big? Of American adults, 53 percent have actually considered starting their own business, many of whom consider doing so in order to make more money. Unfortunately, according to Bloomberg, 80 percent of businesses fail in the first 18 months. There is clearly a large discrepancy between those who want to start a business and those who actually succeed at being self-employed. There are several things that will help increase the chance that self-employment will work for you, so check out our list below.

Source: Thinkstock

Source: Thinkstock

1. Come up with a good idea and a business plan

Not anyone can start a business. In addition to financial backing, you will need a good idea. If you have a unique talent that can be turned into an idea, then you might already be on your way. If you have a passion that would make a good business, then you are also set. However, if you simply know that you want to be your own boss but you don’t have any great ideas yet, you might need to think about this and do some research.

Once you have a brilliant idea, you should make a concrete business plan: include an executive summary, company description, service or product line, and more.

Source: Thinkstock

2. Do your research

Every person who starts a business has some sort of business idea, but the more research you do into your market, the better chance you will have of succeeding. If you choose to open a restaurant, you will need to research the area where you want to open it. If your city of choice already has five pizza restaurants for 20,000 people, you might want to rethink your choice of restaurant. In addition, if possible, find out which businesses have failed before. The more you know about your potential business venture and the spot you are choosing to create it, the better start you will have. Some areas really need new businesses, especially neighborhoods that are up and coming, and close to bigger cities.

3. Make sure you have the right personality

In order to own your own business, you must be motivated and on task. You also will probably need to have strong communication skills, excellent interpersonal skills, and be extremely organized. If you are starting without a lot of capital, you may need to do both the business side and the people side mostly by yourself for a while. If you are starting a business that will require you to serve or interact with customers face-to-face daily, you will probably need to hire a staff. If you are uncomfortable interviewing, managing, or simply interacting with other people, you will need to hire someone who is comfortable overseeing those aspects of your job. You also might want to consider a business partner who has the skills that you lack.

4. Get financing and make a profit

If you have a business partner who is also financially backing your company, that is great. If you need additional help, you can try to find people who can financially assist you or invest in your company. The better the business plan you have, the more likely you will be able to succeed in this area. If you do need to take a loan out, do your research and look at various companies before making your choice. Having enough money to really help your business grow will increase your chance of success. You can find out a lot of information about small business loans by visiting the U.S. Small Business Administration site, including information on grants and loans.

Once you get your business going, you will need to make a profit. Hire an accountant if possible, and if not, keep meticulous track of all of your spending. If you don’t know how much every part of your business costs, you may lose money regularly because you are not keeping an eye on it. In addition, when you have a set budget and keep track of costs, you can also track your profit margin more easily.

5. Keep your current job if possible

If you’re lucky enough to have enough money to start a business and not be seriously affected financially if it fails, then you are in the minority. If you have flexible hours and people to help you, you should try to keep your job for at least the first few years of your new business. This won’t be possible for everyone because starting a new business is a lot of work, but even if you can work something out with your boss so that you can work as a contractor or a part-time worker, you will maintain a relationship, which will help you if your business fails. The extra income will also help you with your new business and could make a difference if you face serious financial issues in the first few months of starting your business.

6. Pay attention to the legalities

If you decide to open and own your own business, you will be subject to certain tax laws. You also will have to pay attention to several other laws, including advertising and marketing laws, employment and labor laws, finance laws, environmental laws, certain safety regulations, as well as potentially other laws depending on your business. You may be able to research these laws yourself, but there are some situations in which you will want to have a lawyer on hand. If you form a corporation, you may need a lawyer, and, of course, if you face a lawsuit at some point.

7. Promote your business

Even with the best possible idea for a business and even with incredible, financially secure backers, you will need to promote your business. One of the best times to promote your business will be when you are first opening, because new businesses are exciting to people in the community. You can hire a marketing team if possible, but even if you can’t, you can still heavily promote your new business. Consider passing out coupons or purchasing a newspaper ad; also, try to get local news anchors to come out to talk to you about your business. If you have very little money to start, these ideas can easily help your business get noticed. You also should create a website, and if possible, utilize word-of-mouth or social media.

Starting a new business isn’t easy, but it can certainly be done. Whether you own your own business already or are considering starting one, keeping track of the six items on this checklist will help you succeed.

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