By Dee Dee Sung
Starting on your own
Q: I have been dissatisfied with my work for some time and am thinking about making some changes and going into business for myself. I'm a woman in my mid forties and am nervous because it seems like a big step and I don't know how to go about making a plan. Could you suggest what I need to take into consideration?
A: Any change can bring about an array of emotions including uncertainty and self doubt. Above all, know that when thoughtful planning is involved, the change can lead to all things positive. Change is always easier when you know your financial needs are met. Before you make any final decisions, here are the three areas you need to consider:
* FINANCIAL: review your finances and get a clear accounting of what it takes to run your household – your total monthly debt payments, your monthly household expenses as well as your current savings. If you have credit card debt that needs to be reduced or eliminated, now is the time to tend to this while you're currently employed in a salaried position. Conservatively, you'll want to have 9 to 12 months of cash reserves on hand which will allow you some breathing room as you embark on this new chapter. If you don't have this amount saved and you own a home, don't despair. You'll want to explore getting a home equity line of credit. This way, you know you'll have access to these funds if needed. What you want to avoid is being in a position where you don't have enough cash to cover your expenses as you're starting your new business and have to access your credit cards. I suggest you speak with a financial advisor and/or accountant who can help you look at the "big" picture of where you are and what you'll need to do to get to where you want to go. If you have a significant other, you'll want to clearly communicate your intentions and make certain the he or she is enrolled in your plan.
* START UP: be clear on what type of business you want to get into. You must take the time upfront to do your research to define the niche you want to serve as well as determine that this audience is hungry for the products or services you intend to offer. Remember that what we think may be a great offering is not always a guarantee that the public will think so. It's critical that you do your homework before you spend your money to go to market. In addition, you'll need to form a clear plan on how you intend to market your products or services. Will you require a store front or will you be marketing online? Enjoying a hobby and creating a profitable business out of that hobby can be two very different things. If you do your due diligence upfront, you'll increase your chances for success The bottom line is that you go into business to make money and you might as well be in a business that brings you joy!
* GET EDUCATED: becoming self employed will demand that you wear many different hats. These include becoming knowledgeable in the areas of sales, marketing, finance and specific product/service skills. There are many wonderful resources both in print and online to give you a head start on what it takes to become a successful entrepreneur. One of my favorite reads on this topic is "The E- Myth Revisited" by Michael Gerber. What you want to do is to avoid getting into overwhelm and you can best do this by understanding from the start that as a business owner, you will be wearing multiple hats. For this reason, it's also essential that you have an extremely effective time management system in place.
The reality is that there is far more information to share with you than space allows for. My best advice is that you plan this next step with diligence and patience. While at your current position, be sure to continue to give it your best efforts and, remember the adage, people who fail to plan, plan to fail.
Metro Detroit speaker, author and syndicated radio personality Dee Dee Sung is the founder and creative director of The Debt Free Diva with a mission to educate, entertain and inspire people in reinventing their relationship to money.
