Choosing Your Business 10
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
Should I quit my job to start my business?
The answer really depends on your financial status. If you need your income to pay for food, clothing, shelter, and bills, try to develop some customers and have at least 6 months' to a year's worth of living expenses put aside in the bank before quitting your job. Here's why:
Suppose you are a graphic artist. You quit your job, start your home business, and, after two weeks, meet someone from a medium-sized ad agency who says he has a job for you but is waiting for the client to give the go-ahead. Two weeks later, the agency contact calls you and sets up a meeting for the following week with you and a copywriter with whom you'll be working.
After the meeting, you do a rough layout but have to wait for the writer to send you the copy before you can continue. That takes another week. You finally finish the job and send it to the agency, they send it to the client, and a few days later the client requests a minor change. You make it, and at long last you can bill for the job.
At this point, a month or more has elapsed since you first heard about the job. It is likely to be another 30 to 45 days or perhaps longer from the time you submit your bill until you get paid. That makes the total elapsed time from the day you heard about the assignment until you actually got a check in your hands close to 75 days. If the check is big and drawn on an out-of-town company you may have to wait 5 days more for the check to clear your bank and the money to become available. If the check was drawn on an out-of-state bank, it could take 2 weeks.
While quitting your job may be tempting, a better path to follow, if possible, would be to work at the business part-time until the following factors are in place:
- You have a cash reserve that will last you 6 months to 1 year.
- You have run the business long enough to see there is a lasting demand for the product or service.
- You know how long it takes to collect payment from customers.
- You have a steady stream of customers.
- Profits allow you to pay yourself a salary and replace medical insurance or other benefits you'll lose when you quit your job.
- The business has grown enough that it requires your attention full time.
If I use my own name as the business name do I have to register with anyone?
That depends on where you live. In some states you are required to register your business even if it operates under your own name. In other states, you don't have to register the business unless it operates under a different name.
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |
