Most business owners who start out on their own choose their product or service based on their past experience. The owner of that new restaurant two blocks down the road may have had a position as a chef during his previous employment. The owner of a car rental business may have held CDL truck driver positions Mid South. Someone who took over the fast food chain in your hometown may have been working as a manager of the same store. These people do what they are good at, only this time they are working for themselves. In other words, they have become self-employed.
The good news is that there are many opportunities to make money being self-employed. The bad news is that there is no safety net as well. You as a owner is responsible for everything that will go on in the business. Every cent of income that is produced in the business stops at you. You can make a lot of money eventually, but you will start out with less in the beginning. And you are responsible for every task such as paying taxes, payment to employees, social security, cost of health insurance, supplies, raw materials and so on.
What you need is planning before wearing multiple hats or delegating multiple tasks. Essentially, this is a step by step process executed on a regular basis. For example, instead of planning to make the rest of the money in a month, plan for the revenue each day. And work toward achieving that goal. How much do you want to charge for a certain product or service? You may realize that you can’t reach your goals some random days of the year. The invoices for the service need to be consistent, on a daily or weekly basis. This means you should be able to work for it every day and meet the daily goals. If your goals seem to be too lofty, break them down into smaller achievable parts.
Also important is to write down the goals. This gives you a higher percentage edge on achieving them. Goals are also crucial when drafting a business plan. There are several reasons to officially have goals and therefore your business plan. For one thing, lenders hesitate to offer loan without a proper plan. Clients may not be willing to do business with you without a business plan in place. Having a business plan is the key to getting deductions during tax filing. For instance, the IRS allows only real businesses to deduct business expenses and not a hobby activity. Business plan is also essential to create a team and departments, both internal and external to the business.
In essence, wealth through business in most cases is achieved through income generated as a result of selling products and services and not through equity. For instance, when you sell the business, there is no real value to the business because every penny that is generated is solely through the effort of you and your employees.