Guest Author – Tina Martin – ideasinspired.com
If you have been contemplating making a move into entrepreneurship, what’s holding you back? For many, past financial hardship or losses may make them reluctant to take this first step. They may worry that past mistakes will return to haunt them, or that potential lenders or investors will be put off by anything less than perfect on their financial record. If you have a viable idea for a business, however, you should not be prevented from pursuing it, even if you are still recovering from financial difficulties. Here are some guidelines for moving away from past setbacks and into a more promising future as a business owner.
Learn from the past.
Often, financial hardships happen to people through no fault of their own. And sometimes it can be only a minor error in judgment that leads to financial problems. Perhaps you were too trusting and didn’t do your research before committing to a venture. Perhaps you spent beyond your means. Take note of where you went wrong so you can be careful not to repeat bad patterns. If, on the other hand, you experienced loss due to illness, job loss, or an accident, try to be insured against similar hardships.
Take care of any credit problems.
If your credit is bad due to unpaid debts or other issues, resolve them before you start your business. Check your credit score to see if there is anything you should be concerned about. A poor score can be due to outstanding debt, missed payments, and bankruptcy. See if you have any debts that have been sent to a collection agency and deal with those first. You can improve your credit over time by staying within your limit and paying more than the bare minimum.
Make sure you have capital.
No matter how low your overhead and how high your anticipated profits, do not go into business ownership without sufficient capital not only for startup costs but to keep your business running smoothly for several months, too. You don’t want to mine your personal savings to fund your business, either. So if you don’t have enough set aside to finance your launch, look into funding options such as loans, grants, and investments.
Use your business funding wisely. Don’t be lured by the temptation to splurge on trendy toys, or on anything unnecessary for the well-being of your business. Having a strict business budget will help you curb any spending impulses, as well as monitor funds, cash flow, and profits. Your budget should account for both fixed and variable costs and not make any assumptions about profit that isn’t guaranteed yet.
You can save on paying rent for office space by working out of your home, but you’ll need a standalone home office away from distractions. A spare bedroom or basement can be a terrific spot for a home office, but if you’re making significant renovations, you’ll need to budget for the work. It’s also a good idea to document any value-boosting improvements you’re making to your home in case you decide to put it on the market at some point.
Consider supplementing your skills.
Perhaps you feel you need more knowledge or training before starting your business. If so, this is actually a positive sign: Good managers believe in always continuing to learn and grow. While there are many great learning resources on the web, if you feel you want something more intensive, consider signing up for an online course, or even going back to school for an MBA. You can pursue your degree online and learn more about business, finance, and management, with a flexible schedule that allows for your work hours.
Consult with experts.
Even the most seasoned entrepreneurs routinely rely on others to keep their businesses thriving. Hire experts to assist you in fields where you have less proficiency or simply to free you up to focus on building your business. A professional accountant can make sure your books are in good order and you are sticking to your budget. A web designer will make sure your business site is professional-looking and secure. And when you need support growing your business, work with consultant James Solomons who can help you set up new systems, streamline workflows, and create marketing strategies.
Everyone has their ups and downs. And hard times can often leave you discouraged and frustrated, second-guessing yourself. But hard times can also help you grow more resilient, creative, and empathetic — all great qualities for a business owner. So keep your focus on the positive, follow good management principles, and you can look forward to a better future, as a business owner.
Tina stays busy as a life coach and works hard to help herself and her clients achieve a healthy work-life balance. She started ideaspired.com as a side project to reach as many people as possible, and encourage them to put their dreams first