Will the New Year Mean a New Business?

General Business News

December, 2008

Will the New Year Mean a New Business?

Happy holidays! Does that sound a bit strange given the current economic climate? Only time will tell for sure, but if you are reading this, you still have a few blessings, like your eyesight and access to the Internet. Well, at least your eyesight is a blessing; Internet access may or may not be.

With the recent bad economic news, here is some good news – 2008 is nearly over and 2009 holds its own challenges and possibilities. With the current spate of layoffs and corporate cutbacks, you may be thinking it’s time to find a new career. Assuming you have been laid off, you are certainly looking for new employment and even if you are still employed, you may be tired of the uncertainty of someone else deciding your fate. One solution to your angst may be starting your own business. This article and the ones to follow next year will help you 1) decide what you want to do and 2) help you get there.

The Good, The Bad and The Ugly

If you are thinking of starting your own business, know this for sure – it’s not easy and as prepared as you think you are, you probably aren’t. Any entrepreneur can tell you that starting a business was incredibly challenging and that they worked far longer than anticipated. The entrepreneur missed family functions because of business demands and yearly vacations took a back seat to making payroll. Still, there were numerous rewards that made the risk - and the work - worthwhile.

Pros

Here are a few of the pros to starting you own business:

You are your own boss.

You make all the decisions; therefore, you have nobody in a position of authority second-guessing you.

You have a greater chance at making more money.

If you are the bossy type, here’s your chance to tell your own employees what to do.

Since you choose the business, you will be working in a field you enjoy.

You will have the satisfaction of starting your own business and watching it grow – much like a child, only the teenage years are a bit different.

You will have a chance to work with customers directly and perhaps build lasting partnerships/friendships that you never would have if you worked in a back office.

Cons

And now, for a few of the cons:

You will probably be putting everything you own on the line.

You will probably work much harder than you ever thought possible, at least at the beginning.

You will have to deal with all aspects and details of your business, not just the fun stuff.

Your income may well suffer at first until the business is up and running. Even then, it may be seasonal and not steady.

You will be the person responsible for hiring and firing employees as well as making all the human resource decisions, some of which will be unpleasant or controversial.

Do you have the right stuff?

As a small business owner, you will wear many hats. Some of them will be pleasant, but some will not. If you thought being the “chief cook and bottle washer” at your old job was difficult, try on your roles as owner:

Manager/boss – if you have employees, you will be required to manage their activities on a day-to-day business. You will be required to schedule their activities, make hiring, firing and disciplinary decisions, as well as being certain to properly reward good work. You will have to make benefit decisions that may not always be popular, especially if you plan to offer health insurance.

Sales manager/Marketing director – If you don’t sell, you don’t eat. It will be up to you to design the marketing campaigns and sales strategies to get customers in the door. Then, you will have to convince them to make the purchase.

Accountant/bookkeeper – even if you have an outside accountant, you will still need to keep up with day-to-day receipts and disbursements. You will have to make sure the bills are paid on time and that the proper information is collected in order to make good business decisions.

Business strategist – all businesses go through cycles. During the good times, you have to plan how to meet customer demand and how you will grow your business. You will be the one to decide which direction to take it. As for the bad times - well, let’s hope you planned well during the good times.

The foregoing are but a few roles of the small business owner. Some others may include repairman, technology expert, clerk/receptionist, bill collector and others.

All these hats mean that you need to either possess, or be able to develop, certain traits. The willingness to sacrifice, work with others, lead others and manage others is critical. Good business experience, intelligence and organizational skills are also a must. Above all, you must be an incurable optimist. You don’t necessarily need to have mastered all these skills, but you do need to have access to others who exhibit these qualities. Access means that you not only know someone who will work with you, but you will also need to pay that person what he or she is worth.

As to the optimism part of the business owner’s skill set, that is something you can’t outsource. There will be bad times. This is as true in business as it is in life. A pessimist will quit, while an optimist will keep going. When you own your own business, you will find the old axiom Winners never quit and quitters never win really is true.

Parting Thoughts

This article is not meant to deter you from striking out on your own. Actually, done properly, starting your own business can be very rewarding and provide you a degree of freedom you never thought possible. Give us a call and let’s talk more about your goals and see if you are ready for a new direction in your life.

Happy holidays!

These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.