Here’s how to know if the time is right for you.
- An improving economy could make 2022 a good time to start a business.
- You will need to make sure you are up to the challenge and have a plan to meet it.
During the COVID-19 pandemic, many small businesses have been hammered. And some are still trying to organize a recovery.
But these days, the US economy is stronger. If you’ve been considering the idea of starting your own business, 2022 could be a good year to get the ball rolling.
But is it the right time to you to start your own business? Ask yourself these questions to find out.
1. What do my savings look like?
It can take time for a small business to become profitable. This means that you could go several months without pay while you start this business.
That’s why it’s important to have a good amount of money in your savings account. If you’ve accumulated enough money to pay for six to 12 months of essential expenses, you may be in good shape to go ahead and absorb a massive pay cut for a while.
2. Do I have the money to start this business?
Some businesses cost more to start than others. If you’re running your business from home and don’t need a lot of equipment or supplies, start-up costs may not be a big factor. But if you need to rent commercial space and invest in supplies and equipment, you’ll need to make sure you have the money for it – or the ability to borrow it.
To that end, you have options. You can borrow against the equity in your home or try to take out a small business loan. But it’s important to know how your start-up costs will be covered.
3. How will owning a business impact my work-life balance?
Owning a business is a big commitment – one that might require you to put in more hours, at least initially. You’ll need to make sure you’re okay with this potential impact on your work-life balance.
If you’re going through other changes, like having a baby, now might not be the best time to start a business. But if your kids are growing up and becoming more independent, you might feel more comfortable signing up to run the show.
4. How much help will I need?
If your small business requires you to hire a bunch of staff members, you may run into problems. Many businesses are struggling with labor shortages these days, and as a new business, you might find it really hard to hire. Be sure to assess your staffing needs and be prepared to offer higher salaries if you need to recruit new people.
5. What is my backup plan if my business fails?
No one starts a business thinking it won’t be successful. Unfortunately, it’s estimated that 20% of small businesses fail within the first year. Before you make the decision to start a business this year, you’ll need to come up with a backup plan in case things never take off.
That backup plan could be to go back to your old employer or jump into a new field entirely. But it’s important to think about the worst-case scenario before moving forward.
With the economy stronger than it has been in years, now might be the time to start the small business you’ve always dreamed of. Just be sure to answer these essential questions before taking that leap.
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