Small Business Owners Need to Be Aware of Financial Situation
Author: Keith Huggett
Launching a startup business is exciting, but you can't ignore the practical realities of your personal finances. If you're one of the many people who created a startup business while being employed by another company, you will likely experience a point when you need to decide whether to stay with your day job, or quit and pour all of your energies into your own business. This is a difficult decision. You can't effectively run your startup with the limited time that you have, but you're not sure if it will be successful quickly enough to sustain your financial requirements.
So how do you know when it's time to take the plunge? First, get the following ducks in a row to protect your own financial health:
- Save up for a long haul: Pay down as much debt as you can and save enough money to sustain your lifestyle for at least six months. Separate your personal money and the funds you plan to dedicate to your startup business so you don't face any unpleasant financial surprises down the road.
- Have a solid plan: While you may have fully thought through your business idea, if you don't have a plan to follow it's easy to get distracted along the way. You may be able to afford these distractions now, but this won't be the case if you give up your primary income source.
- Consider factors other than money: What will you do for health coverage? Do your kids currently participate in a daycare program through your current employer? Are there other perks that you currently take for granted that will impact your lifestyle or finances?
To make sure you have the full financial picture of your startup business, consider working with a qualified tax professional like those at The Tax Office Inc. We can help you evaluate your current financial situation and the various consequences of striking out on your own. Contact us today to learn more, or schedule a meeting online. For quick answers to your questions, find us on Twitter at #Plan4Tax.
