What do you need to start a business? Drive. A great work ethic. An amazing idea. Skills and knowledge. Yes! But are you financially ready to start a business? This is something you truly need to know. Don’t jump into business ownership, quit your job then wonder how you will keep the lights on.

    You need to be practical as well as a dreamer when you become a business owner. The dreamer in you is what will keep you moving forward and climbing mountains and overcoming other obstacles. The practical side needs to know how you will pay the bills, find clients and be and/or remain viable.

    Are You Financially Ready To Start A Business?

    1. What are you worth? Not you, personally, but what is your business idea worth? What can you charge for your services? What will it cost you to make your products and what do you need to make to break even? What will you need to make to turn a profit?
    2. What do you need to earn to be viable? Write down ALL of your expenses. Write down all of your income from other sources. Write down what you will need to earn in your business to pay your expenses and have some money left over for future growth.
    3. Have a business plan written and follow it. Don’t “wing it” when you’re starting out. Your business plan is a well-thought-out document that you will spend time with and explore all the positives and negatives about your business idea.
    4. Do you need help? Can you run your business on your own or will you need help? If you need help, what kind do you need and what will it cost? If you have talent in XYZ — great — that’s what you need. That’s the core competency you need to focus on. If you need a website and a social media presence — and you do — who will build it and manage it? If you think you will do that AND run your business you’re giving yourself too much credit. Don’t spread yourself so thin that every aspect of your business suffers. You will also want to budget for a financial advisor and a lawyer.
    5. Track your successes and your failures. Don’t leave a failed business experiment to chance. Learn from your mistakes and implement changes to help assure they don’t pop up again.

    It’s usually recommended that new entrepreneurs have six months of living expense money in the bank before he or she quit a job to focus on their business. Are you financially ready?

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