3 Significant Personal Risks in Starting a New Business

Many people want to be an entrepreneur. When you own a business, you have control of your schedule, and you can get out a job that you dislike. You’ll also enjoy the opportunity to build something that you can take pride in. But with the incredible benefits of running a business come with a lot of risks. There can be dry spells in which you have difficulty finding work, and there’s always the possibility that you could fail. People who are interested in becoming entrepreneurs should know some of the risks before they take the plunge, and here are some of the biggest hurdles that you’ll need to overcome on your way to owning a successful business.

You Will Have to Give Up Your Current Job

Even if you don’t particularly enjoy your current position, there are benefits that you receive from it. For instance, you have a steady paycheck that you can consistently rely on to pay your bills. Depending on the job that you’re in, you might even have extra money to enjoy vacations and other luxuries. When you own a business, you don’t necessarily know how much you’ll make from one month to the next. You also won’t be receiving employee benefits, such as insurance and 401K contributions, that you’re currently receiving on behalf of your employer.

While you can still make contributions to a retirement fund and get insurance through the government’s marketplace, you’ll need to do the planning that your employer currently does for you. My Wife Quit Her Job compares and contrasts the two positions. When you work for a day job, your work usually stays at work. When you put in your 40 hours, that’s usually it. Day jobs can also teach skills and help you build up capital you wouldn’t have been able to do otherwise. However, with a day job, you could be let go without any notice. You also have very little say in the work you do, or anything above your position. You have very little control.

You May Lose Your Personal Assets

When you start a business, you could be taking on several risks that jeopardize your personal assets. If someone sues your business when you don’t have the ways of protecting yourself in place, you could end up paying the claim from your personal money. This scenario, along with many others, is why you should take the time to ensure that you have the necessary safeguards in place. There are several strategies you can look to when protecting yourself. Legally Mine recommends some tips such as separating your assets, buying umbrella insurance, and putting in the proper contracts and procedures in place.

You’ll Probably Spend More Time Working

While starting your own business can be very rewarding, it’s not easy. Some people see the great lifestyle of someone who has owned their business for 25 years, and they might think that it was always easy. Most successful business owners spend more than 40 hours per week developing their business, and it might take several years to develop it into a source of income that pays all of the expenses. More Time More Profit discusses how many people who want to start a business expect to work maybe 20 or 30 hours and spend the rest of the time relaxing in some way. Instead, the reality is that many business owners work 50 to 60 hours a week, depending on the stage their business is in. After many years, they may come a time when the business owner is able to work less than 40 hours, but that’s only when a business is stable and able to take care of itself without your near constant attention. Starting a business isn’t for people who want an easy path.

There are great rewards to owning your own business, but like everything worth doing, it can come at a cost. If you’re thinking about starting your own business, minimize as many personal risks as you can.

Coming up with your business pitch can be a hard trial and error process. Let Plan Thy Business help! We know all about how successful businesses get started, and we’ll help you find the success you’re looking for!

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