Should You Start Your Own Business?

We’re all working hard, but in many cases, we don’t seem to be making more money. Is it our imagination, or is there something else going on? In many cases, it’s the latter. For that, we can blame something known as wage stagnation. There are a lot of job openings, but the wages just aren’t keeping up. For 2017, the Federal Reserve set a wage growth target of 3.5 percent for the United States. Instead, wages grew only 2.6 percent. Other countries are experiencing similar issues, and experts blame a variety of factors, including the decline of labor unions and the rise of what’s known as the “gig economy.” In light of all that, it’s tempting to think about quitting your office job and starting your own business. There are a variety of factors to consider before you turn in your two weeks notice, though.

Know What You Bring to the Table

It’s easy to sit in your cubicle at work and dream about starting a business that’s an instant success and allows you to retire at age 40. When you’re sitting in your office, you probably don’t have time to really map out the details of what it would take to get your own business up and running. The old cliché that “the grass is always greener on the other side” very much applies here. If you don’t like your current job, then just about anything seems better than what you’re doing at the moment. It’s an easy thing to imagine that working from home or renting a storefront will magically lead to higher take home pay, but you have to work really hard to ensure that becomes a reality. You have to talk with reputable financial advisers, like those at Global PEG, and figure out if your business plan is truly viable.

If you have a family, you also need to make sure that they’re OK with you quitting your boring but steady job for a much more unpredictable lifestyle. For instance, will you be able to get health insurance through your spouse’s job, or will you have to look elsewhere? Will your spouse and children be OK with the long hours that are required when you’re trying to get your business up and running? Don’t assume that they’ll be OK with all this; instead, sit down and have a long conversation — or five.

Beware of Scams

If you have any social media presence whatsoever, you’ve probably gotten a message from a friend asking you to come to a “spa party” or other event. When you get there, the “spa party” is actually an excuse to try to sell you facials or lipstick or something else that your friend obtained through a multi-level marketing company, or MLM. Such companies often charge people a few hundred or even a few thousand dollars to buy stock in makeup or clothes or nutritional supplements. The “independent consultants” then have to both sell their stock and recruit others to sell if they want to make any money. Making money is a lot more easily said than done, as it’s hard to find others to recruit unless you join a company that’s just starting and on the rise. Such schemes are especially attractive to parents who want to quit their job and stay at home with their kids but also need to bring in a source of income. Unfortunately, that source of income is mostly a myth, as a Federal Trade Commission report indicates that 99 percent of MLM participants lose money.

If you’re thinking, “Well, so what? 90 percent of small business fail anyway,” then think again. That 90 percent number gets thrown around a lot, but it’s not backed up by facts. According to the Small Business Administration, 39 percent of legitimate small businesses end up being profitable. Another 30 percent break even, while the other 30 percent end up losing money. Those numbers are daunting, but if you’ve done your research and consulted with some experts, the odds don’t seem nearly as scary. Be ready to work hard. Be ready for less stability than you’d like, especially in the first few months or even years. But if you play your cards right and get a little lucky, you can end up being one of the true success stories.

David Jackson

David is a personal finance expert, a professional male model, and an entertainment writer.