Many of us want to become business owners — and for good reason. The American dream of being our own boss and making big bucks is a smart strategy in today’s competitive economic climate. But that doesn’t mean entrepreneurship comes easily or without risk. What does becoming an entrepreneur mean for your finances? Can you be a thrifty risk-taker?
One Forbes case study notes that everyone is an expert at something. Figuring out what your expertise is and how to turn it into a business where you can sell a unique product or service is key. Once you have a passion and an idea for a company, you can take the necessary steps to entrepreneurship.
Many of us already have creative ideas and talents that could lead to a business. The trick is coming up with a small, profitable business idea. It doesn’t even have to generate mass money but simply be something people will buy, even if it’s only a particular market.
Next, come up with an acceptable hourly wage for yourself, and commit to devoting several hours per week to your endeavor. Aim to yield your minimum salary or exceed it with a modest profit.
“There is no reason to require that your first business be a blockbuster. Many successful business owners have failed multiple tiny businesses on the way to their success,” Forbes notes. Most businesses are also started on the side, while the owner is still employed elsewhere.
The point is to figure out how to create something others need or want, produce it for a fee, devote time and decide if that product is something you want to continue with. If you can do this, you’ll prove to yourself you have the business spirit you need. Then, figure out how much money you’ll need to get started and where those funds will come from. Savings, investments, a relative or a business loan? Devise the least risky plan, and go with that one.
When that’s all set, try out your idea on your friends and loved ones before you invest real money and time — it can be safer to receive feedback on whether there’s a market for your business sooner rather than later.
“People often paint a ‘death or glory’ image for the entrepreneurial approach to life… Let’s jump off this cliff and see if we can put the hang glider together before we hit the bottom,” serial entrepreneur and college-level business lecturer Stuart Morris writes for The Guardian.
Morris disagrees with this all-or-nothing outlook on business ownership and sticks with some early advice he received: Always use a limited company, and never risk the family home. Basically, using this method, both the financial and emotional risk are low. So what if your business fails? You got some experience and learned a few lessons along the way for the next time. Aim high, but with low stakes.
Becoming an entrepreneur isn’t necessarily an easy life. Being your own boss comes with hassles and responsibilities — but if it’s what you desire, you can begin while you’re still employed, start small and devote your spare time to your endeavors. Who knows? You may even land on the next big thing.