BEING YOUR OWN BOSS

Working for Yourself

At some point in your career, you may decide that you’d like to start your own business instead of working for someone else.

DEVELOP A BUSINESS PLAN

The first thing you’ll need is a business plan. This means looking at the potential need for whatever product or service you plan to offer, researching your probable expenses and income, determining the best location for your business, researching sales channels, and profiling your potential customers. There’s no need to rush this process; the more developed and thorough your business plan, the better your chance of success. You can find a thorough, easy-to-navigate business plan template on the Small Business Administration (SBA) website at www.sba.gov.

Let’s assume you’ve already thoroughly researched the viability of your idea for a business, prepared a business plan, and are confident that you have the skills, discipline, and work ethic necessary to be successful on your own. Here is what else you need to consider:

• Can you live without a steady income for an undetermined period of time? Before you give up your day job, you should have a healthy savings account to fall back on while you build a customer base, especially if the business is seasonal or cyclical.
• Will there be start-up costs? Do you have a solid, detailed estimate of what they’ll be? Have you prepared a budget detailing projected monthly costs and estimated sales? Talk to your banker and find out what financing options are available, if any, and what’s required in order to qualify for them.
• Have you thought about the legal form your business will take? Read up on the subject or talk to an accountant or attorney about the pros and cons of being a sole proprietorship versus a partnership, LLC, or corporation.
• Have you familiarized yourself with the laws regulating your business and made a plan to comply with local ordinances and laws regarding business licensing, safety, workers’ compensation, and sales tax?
• Have you talked to your insurance agent? If you’re running a business out of your home, you may need a rider to your homeowners insurance policy. If you have employees, you’ll need workers’ compensation and liability insurance. If you have inventory, you’ll want property insurance.
• What about the tax issues? You’ll be required to file quarterly federal and state estimated taxes for yourself, or, if you have employees, you’ll need to register to withhold and submit income and other taxes to the state and federal government and file quarterly and annual payroll tax returns. Who will do your payroll and prepare and file these reports? Do you need to hire an accountant or payroll service, or will you do this yourself?

Keep Up with Bookkeeping

If you’re running a business, you need to keep track of the finances, and that means doing some bookkeeping. Talk to an accountant to help you get set up properly. The easiest way to manage your books is with online accounting software like QuickBooks or Xero, which can more than adequately handle everyday bookkeeping tasks (like invoicing) for most small businesses.

THE TRUE COST OF HAPPINESS

Your job is where you spend most of your waking hours. Therefore, it’s a significant part of your life. Even if you just view it as a way to pay the bills, it affects you in many ways. If it makes you unhappy, evaluate the alternatives. Maybe you can afford to take a lower-paying job that you’ll enjoy. If you’re stressed and unhappy at work, you may be setting yourself up for bigger problems. You may have higher medical expenses down the road (for you as well as your family), which could offset the benefits of your larger paycheck. Keep the big picture in mind and consider the rest of your life as you evaluate your employment situation and choices.