So it is good to start by asking a few questions and it might sound silly but your first question should be
“Do I need to earn an income?”
Will you need a wage from the get go or can you take your time to build a profit?
if you are the main breadwinner in the house then how much do you need to bring in to fund your portion of the household budget. It is important that you know this from the beginning because then you have something to aim for.
In effect do you need to set a goal and a time frame to achieve it in.
Let me give you an example. Let’s say you are the main breadwinner in the home and your family rely on you to bring in $4,000 per month to foot their cost of living bill. If you are presently in work and bringing home that amount of money then you have a few options:
If your prospective business is the kind that will need your attention full time to be able to build it – then set up a bank account now and start to save for 6 months worth of wages to keep your home afloat whilst you are starting to get your business underway.
Find out if you can take a leave of absence some employers allow you to take time off without pay for a few months to a year whilst still having the security of knowing that there is a job waiting for you if you decide that this working for yourself is not for you
If you can’t have leave without pay then do you have long service leave or extensive build up of holidays. Anything that will help to fund you whilst you are finding your feet in business.
whatever you do don’t quit your job until you have at least 6 months worth of guaranteed income to put your mind at rest. This will mean that your dependents won’t starve and gives you the ability to focus totally on your business to grow it and bring it to a profit of at least your present monthly wage or what you know you can live on if you need to take a pay cut.
If you are not the main breadwinner then things are a little more relaxed but this can be a false sense of security as if you are not careful your new business can start to place an added strain on your family budget as unplanned or thoughtless purchases in the name of business start to appear regularly.
Always the business should afford itself.
So income less expenses should either equal out or bring a profit. Or if you are really astute income less profit equals expenses…..but I will go into that more next time…..