For some people, starting your own business is a dream come true. The idea of being your own boss, working whenever and wherever you need to, certainly can be a fantastic experience. For many of us doing something that you are really passionate about is very appealing. But before you hand in your notice at your day job and get those new business cards printed, there are many things to consider to make sure you’re ready to take the plunge. Here are just a few:
Your Personal Finances
Are you ready and able to give up a steady income? Think about your personal finances and plan a survival budget. What is the minimum income needed to pay essential household bills? Then ask yourself and perhaps your accountant: can the business support your survival budget?
Are your income expectations after a year or so realistic? If the business grows as planned will the cash generated allow you to take your desired salary?
In most cases, the shareholder of a new business is required to put some capital into the new business. How much capital is needed and where will this come from? How much money does the business need to borrow and from which type of lender? Remember if you saddle a new business with too much debt the business might suffer and fail under the weight of interest costs and debt repayments.
Family life can be very different when you run your own business. Suddenly the 9-5 day goes out of the window and you are working all sorts of hours trying to get your dream off the ground. If you have a partner, how will they cope when you can’t spend as much time together as you would like to? Long working hours can take their toll on a relationship so ask yourself and your partner if you are both prepared for this change. Equally, the flexibility you can enjoy if running your own business can be very attractive.
Likewise, relationships need to be strong to survive a crisis in a new business – what happens when money stops coming in? Most new businesses need a lot of drive and impetus at an early stage in order to succeed. You may have to adjust some of your spending habits, and miss out on some of the regular treats.
What about the children, if you have any? When you’re working long hours you may no longer be able to take them to where they need to be. Who will deal with the school run, clubs, sleepovers and so on? Who will walk the dog? You may find your furry friend missing out on his daily circuit of the park if you don’t have a strong and supportive network of people willing to rally around and take care of the things you’re no longer able to do.
Here we have covered just a handful of things you need to consider to make sure starting your own business is the right decision for you and your family. As a responsible lender, Arkle would like you to think not only about the nuts and bolts relating to the business but also how well prepared you and your family are to deal with the stresses and strains that a new business can bring.
There is so much to think about, and if you are about to embark on your own self-employment adventure, we wish you the best of luck! Arkle Finance is here to help, so if you find you need financial help in the form of asset finance, contact one of our friendly and helpful members of staff on 01933 304791 or contact us online.