“I want to start my own business and be my own boss!” Sound familiar? It may, because nearly 95 percent of people have this pass through their thoughts at some point in their working lifetime.
“Get rich quick” schemes never work. Yet we are repeatedly bombarded with TV and other advertizing promising us riches and status if we join their programs to gain “financial success.” But regardless of if the program they offer is a valid means of making an income or being successful, the truth is, new businesses rarely show any amount of profit in their first two years.
It has been estimated that as many as 90 percent of new businesses fail in their first year. Lack of planning is the number one cause of new business failure; “financial planning” tops that list. Being financial smart is perhaps your best chance at success. Follow the basic guidelines listed here:
- Avoid business loans requiring the collateral of your home.
- Never mortgage (or sell) your home to finance your business.
- Never use a credit card to start or operate a new business.
- Keep your business idea in proportion with the amount of money you have available.
Use common sense; if your means of
Be financially prepared to survive your first two years in a new business. Allow for personal income needs as well as the businesses financial requirements. You may need to “keep your day job” until the business gets established.
Better to be one of the 10 percent of new businesses who succeed, rather than facing financial and emotional devastation due to poor financial planning.
Carol Denbow is the author of Are You Ready to Be Your Own Boss? For more on new business start-up or to read about the author, visit www.BooksByDenbow.Weebly.com