Every entrepreneur needs to weigh the risks before starting a business. Even when you are confident of your business plan, the risks to your personal finances can be daunting. However, you can mitigate the risk by making sure you have a safety net in place.
Find a Partner
Partnerships must be set up legally, but going into business with a partner has multiple benefits. Most obviously, a partner will contribute needed funds for capital and operating costs and will also share the financial risk. With a great initial investment, your business will begin on solid footing. A partner will also share the work, both physically and mentally. Startup Daily says your partner’s knowledge, skills, and ideas may complement yours and lead to better innovation, networking, and production. Partners also give one another moral support and confidence, especially when facing the inevitable obstacles during that first year.
Invest in a Franchise
Investing in a franchise will start you out with a well-known brand and a proven record of success. Many franchises will cover the basic start-up requirements for you, including location, supplies, equipment, and marketing. Most franchise companies will also provide training opportunities.
Franchises can be an expensive initial investment, however, and you may need to secure funding. Conventional small business loans are available at financial institutions, but you might also consider a loan from the Small Business Administration. According to Franchise Gator, it can be easier to get an SBA loan if you own a franchise.
Start Part-Time at First
Depending on the nature of your business, you may be able to keep working at your full-time job while conducting your business part-time on the side. This will allow you to keep a steady income while you slowly build your business to the point where you can go full-time. By the time you’re ready to quit your job and devote full-time to your business, you will already have many of the basics in place. You will have built up a client base and developed relationships with suppliers and others you network with. MBO Partners says the transition to full-time will be easier and less risky with this method.
Entrepreneurs are known for their enthusiasm and hard work. Yet, it makes sense to have some safety rails in place while you are beginning your own business. There will always be some risk involved, and reducing that risk can increase your odds for success.
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