So you’re thinking of starting a business. Whether it be going out on your own or buying an established business – it’s a huge step.
As a Certified Financial Planner, I’ve noticed that aspiring business owners tend to:
- Overestimate the amount of money they’ll bring in, and
- Underestimate their business expenses.
Having your own business brings many benefits, like freedom and flexibility. But it’s also hard work. Which is why I’ve got three financial tips for the aspiring business owner. If that’s you, then whatever industry you’re in, these tips will help you feel clear about your decision to start a new business.
Tip #1: Get an independent professional to look over your business plan
Starting a new venture brings lots of emotions. Especially if your business is born from a passion, it’s helpful to have someone objective to assess your plan. A certified financial planner can help with that. We can help you plan for business expenses, and ensure you’ve got a profitable plan in place.
Tip #2: Take out Income Protection before you quit your job
If possible, it’s highly recommended that you take out income protection insurance while you’re still employed. It’s not impossible to take out income protection after you’ve started your business, but it’s trickier. So if you can, get that insurance sorted before you make the leap into full-time self-employment.
Tip #3: Get a financial back-up plan
Business Expenses Insurance is a smart back-up plan that will give you the confidence to leap. I recommend this kind of insurance to many of my clients as it’s relatively cheap and covers stuff like office rent, leases on cars, equipment, and staff salaries. This means, should you be unable to work due to accident or illness, your essential business expenses will still get paid while you focus on recovery.
Now if you’re thinking of starting a business, I encourage you to start with Tip #1. Wouldn’t you feel better about making that leap if you knew your plan was financially sound?