Are you ready to start a small business?

http://www.thestate.com/business

Michelle Woodbury, a business consultant with the Small Business Development Center, tries to help you answer the question: “Are you really ready to start a small business?”

When facing a pressing deadline or rude customer at work or the frustration of finding a job after a layoff, many people find comfort in daydreams of owning their own business.

What could be better than sleeping in late, working in your pajamas, calling all the shots, and getting all the glory?

If, like so many of us, you find yourself seduced by these dreams and are considering branching out your own, consider the following issues:

WHAT COULD BE BETTER THAN CALLING ALL THE SHOTS?

If you think the pressure at a job is bad, imagine being responsible not only for your current position, but all the positions in the company.

You have to make all the decisions, and there’s no one to pass the blame to.

While you may have no “boss,” you still have to answer to plenty of people: your customers, suppliers, creditors, employees, and your family.

Ask yourself: Can you handle all that pressure?

BUT I’LL MAKE SO MUCH MORE MONEY!

Lots of people are drawn into owning their own business by this common assumption.

But before you set out for your own pot of gold, take a minute to seriously plan out your business’ financial future.

Do you have all the money you need to start a business?

If not, do you have good credit and at least 20 percent to 50 percent of the amount you need to start it?

Costs depend on whether you’ll need a physical location, inventory, equipment and employees.

If you plan on having a physical location, count on spending at least $50,000 in startup costs.

Even without one, forming and incorporating your business at least $600. You’ll also need to pay for legal time for forming contracts and lease, operating and partnership agreements.

How much are your monthly operating expenses going to be?

How many customers will you need to meet your monthly financial demands?

What taxes, licensing fees, and other fees will be applicable to your business?

How much do you need personally to survive, and will your business be able to provide that amount?

If you business fails, what will happen to you and your family? Know that half of startups are no longer in business five years after they open.

If you don’t know the answers to the questions above, please don’t start a business until you have thought these issues through, as financial problems can be the most tricky to overcome.

SO, WHEN SHOULD I START A BUSINESS?

If you feel passionately about something, take the time to write down a plan for your business:

• What its mission will be and how much money you’ll need to start it.

• Where it will be located.

• What it will be called and how it will be organized.

• What the short-term and long-term goals for the business are.

• What projected revenues and expenses look like for the next three years.

Taking the time to plan out your business will help prevent you from rushing in to something, only to find out later that it was not as profitable or interesting as you thought it would be.

Next, do a self-inventory.

• Can you make decisions under stress?

• Can you handle multiple deadlines and tasks?

• Do you work well with other people?

• Can you personally afford it if this doesn’t work?

After examining the issues above, share your ideas with others you trust and get their opinions.