by Caleb Page
You may wonder if now is the time for starting a business. For some it is a difficult question. Those with stable, well-paying jobs have a difficult decision to make. Let’s look at the reasons one would change from their current occupation to start a business:
- You don’t see a clear future in your current line of work. There are lots of studies about which careers show great potential in the future and which don’t. This infographic from Rasmussen College does a good job of looking at both majors and industries – those of you with a lot of experience will need to think about how this lines up with your stage in life:
- If you decide your career or industry needs to change, you may also find that other employers are not different. You can see the professional options they have available. You are also confident that the reality is an employer is not going to make your interests their #1 priority.
Start Another Career or Start a Business
If your current occupation has limits, you can choose to retool for another career or seriously consider entrepreneurship. Retooling (aka going back to school) requires a large investment where one runs the risk of being in the same place as before (no future with limited options). This is the point where you should think about the merits of starting a business:
- You create your future. You can choose your industry (within limits) and evolve with the external changes. While you do need to worry about cash flow, there’s no more fear of layoff notices.
- Every dollar earned works twice for you. Revenue immediately becomes net income – each year of increasingly positive net income improves the value of the business for when you eventually sell it. There are few investments that offer the same return.
- You have the opportunity to develop multiple revenue streams and not be limited to stock market investments controlled by institutional investors.
- Some of the best tax advantages go to business owners such as car expenses, some travel, and depreciation expense.
- One of the largest intangible benefits is control of your time. Honestly, a business owner has to work hard. Yet they can choose how hard and when they work.
- You have the potential to develop recurring income. One of the largest problems with having an employer is that your paycheck is a way of settling accounts for the labor you provided. When that pay period is over and paid, you’re only worth what the employer is willing to pay in the next period. When you stop, that’s it. If you set up a business correctly, it will keep earning regardless of the amount of labor you put into it.
Why Start a Business Now?
- The economic recovery is still in question – jobs are still in danger. Advanced Micro Devices, Inc. reported layoffs of 12,000 on October 16th, 2012. The public sector is still challenged – Ithaca is looking at firefighter layoffs and a bunch of EMTs in Lawrence, Indiana were laid off on October 14th. Even the folks at The Weather Channel aren’t safe; 7% of their workforce was laid off.
- Valuations of many existing businesses that weathered the recession are low. This presents a buying opportunity like real estate in Phoenix or Las Vegas.
- Franchises are giving unheard of incentives for new owner acquisitions.
- Stock investments should have mostly recovered since the crash. This may be the strongest portfolios will be for a while.
What Do I Do Next?
Start today! Here are a few actions you can take to get moving:
- Action: Be clear on your goals about starting a business. Get advice if you need it. Investing a few dollars today can prevent the loss of thousands tomorrow.
- Action: List what resources you have available. Create a personal financial statement.
- Action: Develop a picture of your perfect business and find it. Look at Dane Carlson’s site. Talk to business brokers and owners. Look at Craigslist small business section. Go to franchise fairs and small business expos.
- Action: As you find ideas you like, draft business plans to see how they might fit with your requirements.
This is a liberating experience – enjoy the ride as much as arriving at the destination!
Start Today! If you’ve decided that it’s time to stop reading others’ experiences and create your own, get started by finding your best business idea.