There are advantages both to starting your own business yourself and to starting your own business together with others. Start a business yourself if you start your own business, you can make quick decisions without having to discuss with anyone else, you have full control over your business and can work efficiently. But at the same time, you are the one who has to cough up all the start-up capital. Start a business with someone else. When you start your own business together with someone, you share both responsibility and risk with that person.
You can complement each other both in terms of knowledge and personalities. You always have someone to bounce ideas and thoughts off of. It is easier to grow and develop a business when you are already two or more people. The step of employees if you need to is also not felt as big when you are already more than one person in the company. Now you have hopefully got some idea of what your intended path into life as an entrepreneur will look like. Now is the time to talk money – starting your own business involves costs.
Going from employment or studies to becoming an entrepreneur requires, in addition to mental preparation, also financial preparation. Here we have to talk about two different aspects. The private financial aspect buffer and the business financial aspect start-up capital. So what does it take to start a business. The buffer is the one you have to save up for before you start your own, especially if you invest in a clean break with your previous life as an employee or student. Then you have no other source of income than that generated by your new business. And income is something that you can not count on getting from day one.
Therefore, make sure that well in advance of starting the business you save up to a buffer that you with or without family can live on during the first six months. Here we are talking about 6 net salaries. If you plan to sneak in your business on a smaller scale, to test whether the concept holds up, you may be able to get by on a smaller buffer. In this scenario, you can keep your employment at the same time but, possibly, reduce your working hours. More about this in the section ambition level – jump start or stealth start.
