From Employee to Entrepreneur: 4 Financial Tips To Ace Your Transition

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By guest writer Brittany Thorley

Giving up job security to become a full-time entrepreneur can be a risky bet. Regardless of the reasons why you want to be your own boss, chances are you will face several financial obstacles. So here are 4 important tips to help you make that transition and increase your chances of success:

1.     Get control of your personal finances

Before launching your business, you will need to write a good business plan and come up with realistic expense and revenue projections. Once you have determined how much money is required to get started, you will need to make a solid budget in order to decipher your current financial situation. You will have to put some money aside (to survive during the early stages of your business), reduce your spending habits and pay off your debts fast. Finally, in case you lack the required capital to start your business, you may opt for taking a part-time job to ensure more financial stability.

2.     Explore all your financing options

Before investing your own money, it is generally advised to look into all the financing options available to you. Depending on your geographic location, your business idea and your industry you could benefit from bank loans (commercial banks or development banks), government grants, startup competition prizes, or even crowdfunding.

3.     Ensure your family’s financial security

As a parent or a spouse, you will have to take necessary steps to protect your household from potential losses. Plus, as an entrepreneur, you won’t receive the social benefits generally provided by companies to their employees. You may therefore need to subscribe to a private employment insurance, medical insurance, disability insurance and a life insurance policy (add to that list a mortgage insurance if you are a new homebuyer). In addition, contributing to a pension fund, your children’s college fund and a savings account should be part of your priorities (avoid risky asset classes if your savings are invested in mutual funds or  a brokerage account).

4.     Stay aware of the economy

Regarding the current and future state of the economy, you can never do too much research. Read every piece of research on your industry and how the economy will impact your target audience’s consumption habits and consuming power. This will help you launch your business with the best possible grounding.  Economic indicators that may be worth following include sector GDP, interest rates, stock market predictions, national budget, trade balances and consumer debt. The political and regulatory environments also represent important external factors that can affect the way you do business.

About the author: Brittany Thorley is a business consultant for Forsyth, and personally and professionally helps companies of all sizes find the solutions they need to succeed in today’s economy.

Did this help? Your opinion matters. You can rate this article, leave a comment below or share it on social media. Follow Bobbyfinance for more financial tips.

1 Comment

  1. Elicia Smith

    August 23, 2018 at 5:20 pm

    The best businesses come from people’s bad personal experiences. If you just keep your eyes open, you’re going to find something that frustrates you, and then you think.

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