Chapter 21. WORKING FOR YOURSELF
Should You Take the Leap?… Do You Know the Risks?… How To Get Started
A. When is a Good Time To Start a New Venture?
1. Personal Factors
a. Inflated expectations (See Personal Action Worksheet,
Text page 640)
b. What do you really want to be when you grow up?
c. What are you giving up?
d. Credit
e. What’s your fallback?
f. Energy sources
g. Your Business Plan - Don’t leave your day job without it
h. The Small Business Administration (SBA)
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A. When is a Good Time to Start a New
Venture? (continued)
2. Economic Factors
a.
b.
c.
d.
e.
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Growth or recession?
Specific industry trends
Easy money?
Changing neighborhoods
While you wait……
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B. Taking the Leap
1. The Legal Status of Your Venture
a.
b.
c.
d.
e.
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Temping
Independent contractor
Sole proprietorship
Partnership
Corporation
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B. Taking the Leap, (continued)
2. The Start-up Choices for Your Venture
a. Where will you work?
i. Leasing
b. Purchase contracts (in general)
c. Franchise contracts
d. Buying an existing franchise
e. Buying an existing non-franchise business
f. Starting from scratch with a franchise
g. Starting from scratch independently
h. Some special consideration for professionals
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C. Where Will the Money Come From?
1.
2.
3.
4.
5.
6.
7.
8.
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Personal Savings
Family and Friends
Lenders
“Built-in” Credit
Governmental Sources
Other Investors
Tax breaks
Debt vs. equity
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D. Nit-Picked to Death by Regulations?
1. Employment regulations
a. Tax matters
b. Employee well-being
2. Financial regulations
a. Credit matters
b. Retirement plans
3. Miscellaneous regulations
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E. Where to Get Help - The F.A.I.L.-Safe
Team and the M&Ms
1. The F.A.I.L.-Safe Team
a. Financial
b. Accounting
c. Insurance
d. Legal
2. The M&Ms
a. Marketing
b. Management
3. Seek and You’ll Find
4. It’s Your Move
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TALKING POINTS…
Chapter Twenty-One, Number One
People who’ve offered to help you get started in your own business have given
you several choices. Evaluate each.
1. Your parents will bankroll you with a no-interest no-collateral loan. It’s a big part of their
retirement nest-egg, so the loan must be fully paid in 3 years. OR, your bank will lend you
what you need, at 8% per year interest, renewable yearly for 10 years at the going interest
rate, assuming your payments are up- to-date. Your business, inventory and equipment will
be collateral for the loan.
2. You can rent ideal space in a mini-mall for $2,000/month. OR, your cousin Murray will rent
you comparable space in his mini-mall for 500/month, but he expects each of his 2 teenage
kids to work for you at least 20 hours/week. And he will remind you of the favor and the
requirement often.
3. A local P. R. firm will service your needs for $500/month on a 5-year contract. OR, your old
pals, Pat and Fran, who have a public relations firm, offer to provide their service free in return
for a share of your profits. They make it clear they will be “on top of” your day-to-day activities
to protect their interests.
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TALKING POINTS…
Chapter Twenty-One, Number Two
Everyone who supports you in your new venture has advised you - and
wisely so - to set a cut-off point. That is - if you haven’t met certain goals by
a certain time, you’ll give up the venture and go back to working for someone
else for a reliable wage. Evaluate and rate these possible cut-off scenarios:
1. If your take-home income from the venture has not equaled what you were
earning in your previous job within 3 years, you’ll give it up.
2. If, after 1 year, you run out of capital and have to borrow in order to meet your
goal in #1 above, you’ll give it up.
3. If, after 3 years, your spouse tells you that your venture is harming your home life
and threatening your emotional or physical well-being, you’ll give it up.
4. If, at any time, you can honestly look at yourself in the mirror once a month for 3
months in a row and say, “I am really not enjoying this,” you’ll give it up.
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