Do you like being in charge of your destiny and are you able to handle stress well? Do you have a great idea for a new business? Or are would you rather cut past that risk and buy into a ready-made proven franchise deal? Either way, you may be able to strike out on your own and become the entrepreneur you want to be. Here are some ideas that may help clarify your thinking and help you decide if you could become a successful entrepreneur and self-employed business owner!
What’s Your Personality Type?
If you like routine, stress-free days and the predictability of a regular paycheck, and you are not comfortable taking full responsibility for work-related matters, you may not have the traits necessary to become an entrepreneur. Entrepreneurs have to be highly motivated, driven individuals who can handle high levels of stress and lots of unpredictability. They know that the success or failure of their new ventures depends in large part on their own decisions and actions.
What Is Your Idea?
Is your business idea for a new product or service, or does it reimagine or improve an existing one? New ideas often come from listening to other people expressing frustration with how certain things are. For example, the founders of ride-sharing service Uber recognized that the lack of frequent, reliable taxi services was a huge frustration for them and their friends. They worked on finding a solution that was profitable and scalable.
Other entrepreneurs refine and improve existing products — the classic “building a better mousetrap” approach. You may be working in an industry where you recognize room for improvement. You may decide that items you use every day can be made better, cheaper, or with more features. Your big idea may be the one that delivers the most value to consumers while making their lives more pleasant. Many successful new ventures are crafted from innovating new combinations of existing services, technologies, and market venues to create new ways of delivering what people will gladly pay for.
Is There a Need?
Once you have decided on your entrepreneurial idea, you have to determine if there is a need for the product or service you hope to market. You can only ascertain the true extent of that need through market research. It does not have to be an expensive or complex undertaking — you could, for example, use social media to reach out to potential customers and gauge their interest. You could offer early access or future discounts to people in return for them filling out a questionnaire about your product or service.
Can a Franchise Operation Cut Your Risk?
A franchise is a kind of a shortcut to entrepreneurial business ownership, without the risk of coming up with an innovative big idea on one’s own. It entails buying a proven success formula for owning and running a business that is already established in other locations or markets. Typically, a franchise agreement includes all the branding and market presence, and comes with complete instructions on how to set up an outlet, how to run it, what suppliers to use, how to advertise, and what expenses to expect. Yet the franchisee owner is also given latitude to set their own business structure, employee wages, hours of operation, and other variable factors that may enhance return on investment — provided, of course, that the franchisor gets their payback for sharing their business formula and brand.
What About Funding?
Can you fund your start-up using your own money? If not, family and friends may agree to be early investors. Crowdfunding sites, angel investors, or venture capitalists might be other sources of start-up funding. You could look into local, city, or state government economic development offices to see if they have any programs that offer funding to entrepreneurs like you.
If you have already built up a decent sized 401(k) retirement portfolio, you can legally use it to serve as an investment source for your entrepreneurial ambitions, without having to pay income taxes or penalties on the funds. This arrangement is called ROBS — Roll-Over as Business Startup, and Baum CPA specializes in advising on the accounting and tax considerations of this funding approach. ROBS is also a frequent favorite for franchise acquisition.
Will You Go It Alone?
Having a co-founder is not always feasible, but certainly desirable for a number of reasons. Having someone at your side who brings the same passion but different skill sets to the business can be invaluable. Additionally, a co-founder can help you critically assess which parts of the business are working and which are not. Essentially, a co-founder can serve as a sounding board for your ideas as to the direction of the business. If it is not possible to have a co-founder, look into bringing trusted advisors, mentors, and other entrepreneurs into your circle.
Taking on any business partners greatly impacts your tax filing obligations and always should be discussed with a CPA before you create a partnership filing requirement. You can sign up for a free appointment with an expert tax accountant at Baum CPA today, to find out more about what’s in store for you as an entrepreneur. It would be a good idea to consult a reliable business attorney, too.
How Will You Connect to Potential Customers?
Today’s consumers want to feel a connection to the brands they support. By using social media to reach out to your potential customers with a compelling story that humanizes you and the business you founded, you can build loyalty and help your customers feel part of your success. Just be sure that when you use social media to communicate to customers that you are being transparent and authentic. You want your customers to trust you and your business at all times.
Look for Trusted Advice
If you truly believe that you could build a good livelihood for yourself and for others around your ideas, then maybe you are ready to take a next big step. You should absolutely consider reaching out to a financial professional for input and advice on the many financial and strategic details involved in running your own business. You also absolutely must consult a business attorney for input and advice on the many legal details involved in running your own business. And then, before putting pen to paper or breaking ground on any new venture or franchise contract, talk to a reliable expert CPA on tax considerations, business accounting, and payroll matters.
You can contact the accounting professionals at Baum CPA now for help planning and managing your future enterprise! Gain extra peace of mind by making Baum CPA your trusted, expert, professional, full-service accountant and tax preparer. We know how to help new business owners stay out of trouble. And your first conversation with us is free! To schedule a free hour of initial consultation with us today, click here.
This blog and its authors provide this content strictly for informational purposes. No content herein should be misconstrued as financial advice. Everyone’s specific circumstances vary — Always consult with a qualified, licensed financial advisor, legal counsel, and tax professional before venturing into any investment or business activities.