Christmas and New Year is a period of relaxation and reflection for many people.
Time away from work is a chance to take stock of the journey thus far and to take control of the road ahead. This sometimes involves making the decision to go it alone by starting a business in the coming year.
As a Small Business Specialist and Bank Manager, I saw many businesses come and stay, and others come and go.
There are a number of ingredients that go into a making a winning new business but, in my experience, the most important of these is time. What I mean is, the longer you are in it, the more likely you are to win it. It’s almost as if, as a budding entrepreneur, you don’t need to plan for success, you need to plan for longevity.
Each milestone – be it three, five, seven or 10 years – brings with it an invisible but very tangible boost to the business. The longer you have been around, the more people have heard of you until, eventually, you no longer need to chase the business, because the business starts coming to you. That’s the sweet spot you are aiming for.
Planning for longevity means planning your finances. If you start the new business without having to give up the day job, things are looking good before they’ve even begun. Similarly, if your partner is the breadwinner and you can both live off one wage . . . way to go!
Otherwise, savings or a loan – combined with an effective personal budget and cash flow forecast – will help you survive on the money you have for as long as possible, which will delay the date that you need to start drawing a wage from the new business; the day on which all that planning will have been worth it. When the decision to go into business back in that life-defining Christmas break never felt so good.
David Rankin is an author, public speaker and founder of the award-winning personal budgeting service Sort My Money. This article does not offer personal financial advice.