Posted by Joy & Co Chartered Certified Accountants on 3rd October 2013
For many people running their own business has been a long held ambition. With the recent economic downturn this dream has become a reality with redundancies prompting many to set up on their own.
Whether you enter self-employment by accident or by design it is essential that you think seriously before doing so as there are a number of risks to consider.
The obvious fear when starting out on your own is that your business fails after you've invested considerable amounts of time and money. This risk can be minimised by ensuring that enough time has been spent thinking and planning before finally taking the plunge.
Think carefully about the effects of ceasing employment. You'll be giving up the certainty of a regular pay cheque. You'll be giving up knowing how much is coming in every month. You may be giving up other benefits such as paid holidays, company health care, a company car or even the free company gym.
What you will not be giving up are your normal monthly outgoings such as mortgage, rent, spending on food and other essential bills.
Think carefully how this is going to affect your family. Are they supportive? How will they feel about half their house being taken over if your business is being run from home? It's essential that they understand that the demands of starting a new business can be time consuming and stressful.
What about your friends? They need to know that because you're your own boss they can't just ring you up for a chat or drop round for coffee whenever they feel like it.
Finally think about yourself. Do you have the self-discipline to stay on track when things get hard, not to slack off because there's no one cracking the whip behind you, to see each task through to the end?
The success of a new business will depend on many factors but success is more likely if all aspects of the proposed venture have been carefully considered before too much time and money have been invested.
So think… think again… and then think once more. If after all this thinking you're still determined to go ahead then it's high time that you….. got on with it!