Are You Ready

Why go into business?

There are many reasons for wanting to go into business. You may have a good business idea related to your current line of work, or have been presented with a specific business opportunity such as taking on a franchise or existing business.

Alternatively, you may have come into money through an inheritance or retrenchment or have experienced a change in personal circumstances. Many people decide to go into business for themselves to enhance their lifestyle or achieve personal goals.

Step-By-Step: Are you ready to start a business? A short guide to help you decide if you have the right skills to run a business, whether you’ ve done enough preparation to start your business, and where to get the help you need.

Advantages of starting a business

Running your own business requires a broad range of skills and can provide many benefits. Some reasons for wanting to own and operate a business are:

• to earn a better living
• greater feeling of control over work destiny and outcomes 
• to develop your own creative ideas
• to produce a quality product
• to build a business asset that you can leave to your children
• to assist with your retirement
• you dislike working for other people
• you enjoy leading a group of people
• you have identified a need in the market that you can profitably fill
• working hours can be more flexible
• the personal pride of ownership

Disadvantages of business ownership

To help provide a realistic picture of business ownership, it is important to understand some of the potential disadvantages of going into business:

• long working hours can cause physical and mental stress and strain, especially in the early stages of the business 
• high levels of responsibility
• you are usually the sole decision maker
• your income will vary and you may need to live on other income (from family, partner or spouse) until the business is profitable
• you may lose some employee benefits, such as holiday pay and sick leave
• there may be hidden costs associated with your business, such as public liability insurance

How do I prepare?

In any circumstance, the most important thing when starting a business is to make sure you are well prepared. A lack of adequate preparation is the main cause of small business failure. Before making any concrete decisions, start by asking yourself the following:

• what type of business do I want to be involved in
• what information do I have about the industry
• am I fully able to prepare a business plan and deal with issues of employment, marketing, sales and financial management
• if not, what training is available to help me gain skills and knowledge in areas I’m not familiar with
• do you have sufficient funds for your personal needs until the business starts generating a surplus
• how much money can you put into the business (prepare a statement of personal assets and liabilities)
• what security can you offer for a loan