By Chris Wendel, Regional Director, MI-SBTDC
Start up companies can geminate from the strangest of circumstances; getting back at one’s boss, realizing a childhood dream, or just getting out of the restrictive nature of an office job. Lately, there has been a trend of laid off or “displaced” employees starting new enterprises as an alternative to unemployment. Taking the plunge into self-employment when out of work is not for the faint of heart and offers additional challenges to the traditional startup.
The first hurdle for any new business is money, more specifically cash flow. Recent upheavals in the banking industry have affected, to some extent, the ability of start up businesses to secure funding. Alternative sources such as savings, family, friends, and even peer to peer lending can finance a small scale enterprise. Thinking through and writing down both your start up costs (any cost incurred before you actually open for business) and recurring monthly costs is imperative.
Secondly is the issue of how you generate money to support you and your family when business starts. If you are out of work and are claiming unemployment payments, it is still possible to retain those payments while the company goes through the phase of building customers and sales.A small “micro-business” makes the most sense in these situations. This means a modest beginning in the form of a home or internet based business that doesn’t take up time you could also be using to find a new job or have a part time, short term job that can help your family make ends meet.
The biggest mistake you can make is to jump whole hog into the new business venture and betting your future on its eventual success. Learning more about the right ways to start a business, is our business. Give us a call at 231.922.3730 to find out how we can help.