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Six-Week Start-Up: A Step-

The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything

Small Business Start-up Guide: A Surefire Blueprint to Successfully Launch Your Own Business

The Small Business Start-up Kit (Law for All Series)

Legal Forms for Starting and Running a Small Business

You’ve got company.

Think you have the goods to start your own business? Before you ditch your day job, take inventory of everything that’s involved in making the leap to entreprenuership, including:

The personal, financial, and lifestyle factors involved
An effective business plan and the formula for writing one
Strategies for funding, marketing, and growing your business

Should You Start a Business?

For many, owning a business is the American dream— a seemingly sure route to financial and professional freedom. But entrepreneurship isn’t for everyone. To decide whether starting a business is for you, first consider your lifestyle and personality.

Personal Factors to Consider

Some people are natural entrepreneurs, born with a knack for running their own show. Others are happier working in a well-defined role for someone else. Some important factors to assess when deciding whether you’re ready to become an entrepreneur are:

Risk tolerance: Starting your own business involves a higher degree of risk than keeping a comfortable day job. These risks include financial hardship (especially at the outset), the prospect of going out of business or going bankrupt if the business fails, and personal risks, such as not having enough time to spend with family, as starting a business can be a time-consuming endeavor. Before starting a business, be sure you’re prepared to accept these risks.
Family support: Knowing that your family and friends approve of your plans to start a business—and may even be willing to help out—can improve your odds of success significantly. Having to justify your decision to an unsupportive spouse or partner can be demoralizing and take a toll on your confidence and commitment.
Health insurance: Losing access to affordable health insurance is one downside of leaving a corporate employer. However, you may be able to share your spouse’s policy or buy one yourself, either directly or through a chamber of commerce program. Having insurance is crucial for your physical and financial well-being; an accident or illness can sideline your business unless you have insurance to absorb the bulk of the treatment expense.
Self-motivation: Without a boss to direct your efforts and monitor your progress, it can be tough some days to accomplish anything. Plus, having no other employees or colleagues around can make for a lonely work environment. On the other hand, the lack of distractions may help you accomplish more in a shorter amount of time, leaving you free time to spend with family and friends.
Experience: The more firsthand experience and training you’ve had in your business field, the better your chances for success. You might consider going to work for a company in your field for a while or hiring employees who do have experience in that field.
Weaknesses: Everyone has weaknesses, but overcoming them can be as easy as hiring employees who complement your skills or retaining advisors to balance your skill set. Just make sure you have enough basic business skills on which to base your company.

Economic Factors to Consider

Besides your entrepreneurial potential, an important factor to evaluate is whether customers will buy enough from you to keep the business afloat economically. Some financial questions to ask yourself are:

Do you have six months of living expenses set aside to live on during the startup period?
How long will it take for your salary from your new business to equal or exceed what you make at your current job? Can you afford to wait that long?
How much money do you need to open your business? Where will you get the money?
Is the current state of the economy likely to impact your business?

Overall Pros and Cons

Before you quit your day job to start a new business, take into consideration some of the pros and cons of each:

Factors	Employment	Business Ownership
Risk	Pros: Stable income; often includes benefits; standard career progression Cons: Layoffs a constant possibility, as long-term employment is less of a given today	Pros: Offers more career control and opportunity for advancement Cons: If business fails, you have more to lose financially; can require significant initial investment of time and money
Rewards	Pros: Well- defined with potential for incremental increases Cons: Little chance for major increase in the short term	Pros: Financial reward significantly greater in the long term Cons: Short-term financial rewards—even salary—may be nonexistent
Intellectual stimulation/professional challenge	Pros: Established businesses often have a training budget to keep your skills well-honed Cons: Some jobs offer little mental stimulation or challenge	Pros: Business owners are constantly learning on the job Cons: Sometimes difficult to carve out time to receive official training and development
Time and effort required	Pros: Typically well-established pattern of hours; opportunity for additional compensation or recognition spelled out Cons: Extra effort may not yield any kind of reward	Pros: Time spent on business is often within your control—you create a schedule that meets your needs Cons: Near- constant commitment required during startup; greater than average time investment required thereafter
Control over schedule	Pros: Schedule is well-defined, and expectations are communicated at outset Cons: Schedule is defined entirely by employer	Pros: When and where you work is frequently within your control Cons: Your business may require more time than you’d anticipated or wanted to invest
Vacation	Pros: Well- defined and available Cons: Limited to a certain number of days per year	Pros: Available anytime Cons: Sometimes hard to schedule due to business commitments or workload
Taxes	Pros: Withholding covered in part by employer Cons: Employees are generally not entitled to all the tax deductions that businesses are afforded	Pros: With your accountant’s help, it may be possible to reduce your total tax obligation Cons: All taxes—company’s portion and yours—are paid by business, making proportion higher