Once you’re satisfied your business idea is viable and you want to start up, you face several choices about what form your business could or should take.
Work-life balance and how much you want to earn are key considerations. You also need to decide on a legal structure, guided by how much personal financial risk you can live with and other key considerations.
A growing number of people in recent years have started highly successful online businesses. This can be a lower-risk option, yet one that can still prove lucrative.
Many entrepreneurs minimise their costs by starting a home-based business. Others share responsibility by forming a business with family members, friends or colleagues. Rather than starting from scratch, you might decide to buy an existing business or a franchise.
Part time or full time? That is a, if not the, question. Your business idea might only work as a part-time or even seasonal venture (eg summer business). There are many people who run such ventures to supplement their main income. Others combine various part-time businesses to generate an overall income.
Before making a full-time commitment, you might hedge your bets by sticking with your day job and starting a part-time business. If things work out, you might be able to commit more time later on.
Alternatively, you might need your new business to provide a full-time wage from the off. Whatever your preference, carry out basic calculations to find out what wage the business could (bare minimum) afford to pay you. If that’s not enough, you’ll have to reconsider your options.
A part-time business might be more suitable for you – especially if you have family commitments. When circumstances change (ie your young children reach school age), you could scale things up.
Be warned: running your own business can be significantly more time-consuming than you might expect. There are many tasks to get through each day and you might have to take some home with you, which will have an impact on your home life.
The dream of running a part-time business can quickly turn into a full-time headache, while running a full-time business can mean you have little time for anything or anyone else.
When considering which legal business structure to go for, you need to think about cost and administration implications, as well as how much personal financial protection you want. Whether you start a business with other people will also influence the legal structure you choose.
Setting up a business doesn’t have to be about making a lot of money and building empires. You could set up a social enterprise or Community Interest Company, which are intended to meet societal needs rather than generate vast profits. Such businesses can still provide a good wage for those who run them.
If all this has done is left you with more questions than answers – good. It’s far better to have to do the thinking now, because basic errors made when starting a business can be difficult and expensive to rectify later on.
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