How to start a business without a trust fund. (For the rest of us.)

How to start a business without a trust fund. (For the rest of us.)

by Nancy Benjamin

Our survey just confirmed what you may already know to be true.

The #1 doubt when starting a business.

More than confidence, working independently, business knowledge, discipline or initiative. There are two words that describe the biggest doubt a would-be entrepreneur has.

Financial security.

I get it.

Never fails. Every time I consult with someone just starting a business, they have fears about making it fly financially.

Of course.

Why wouldn’t you?

Presumably you’re not independently wealthy and you’re leaving a solid job for a chance to chart your own course, practice your passion and make your own schedule.

So what do you do about those financial fears? Many of us have a few commitments—family, a mortgage, car payments, student loans even. It’s not like when you were 8 and set up your lemonade stand for a little more pocket change.

Praying at the altar of the business gods won’t help you succeed, knowing your numbers will. It just takes 3 little things to do it.

Cement your budget

Know your expenses, as exactly as possible. Pull QuickBooks reports of all of your expenses, by category, for every month, for a year (or make an Excel spreadsheet). Look at those numbers. Are they realistic? Do you need to pad some items to make sure you’re covered? (I know my gas bill was crazy last winter.) Did you factor in computer repairs?

Make a realistic budget so you know what’s the minimum you, or you and your family, can live on.

How much can you invest?

It’s a rare business that takes a $0 investment. At the very least, you probably need a webpage, a hosting fee and a phone. You may need to buy product. Or equipment. Some sites require website developers. So, you should have a clear picture of how much money you have to invest.

If you don’t have much, it doesn’t mean you can’t do it. I started my import business at 28 with $6,000 and enough mileage credit to fly overseas.

But it may mean you have to do your business on the side at first. Or get the best possible margin by selling retail instead of wholesale. It may mean you have to borrow money, or raise it.

Project your earnings

How much money can you actually make? That depends on your “product”, how fast you can sell it and how much it costs you to sell it.

You’ll probably need to do a little research on this one. And be conservative. When a good financial advisor gives an investment analysis, he or she will say that the first number for investment returns is 80% likely, the second is 50% likely and the third is 30% likely. Of course, you hope for the returns like the third number, but you better bet on the first number, the most-likely scenario. (Our upcoming Business Rebellion course will walk you through this little minefield.)

If you’ve got all that laid out, believe me, you’re miles ahead of most of the entrepreneurs out there.

Pat yourself on the back. And get to work.

Chances are much better that you’ll succeed. Especially since you’ll know immediately if your actual numbers don’t meet your budget and projections.

12 reasons to start a business anyway

Meanwhile, think of the pros of starting a business, not the cons. (Need no more convincing? I’ve created a master task worksheet just for you, that focuses your business quickly and easily so you’ll have a mission, positioning, a goal and a plan.)

After all, more than 500,000 new businesses are started every year. For very solid reasons. And while you can’t eliminate risk, you can manage it and recognize the positive attributes of the entrepreneurial life.

When you have your own business, you’re no longer beholden to just one revenue stream (the company you work for), you usually spread your risk over several clients or revenue streams.
Starting a business isn’t about taking a risk, it’s about managing the risk. If you can keep your costs flexible (variable), they can respond to your revenues.
You not only take on the bulk of the risk, you realize most of the rewards. Your income is a direct effect of your efforts. That’s a real incentive.
You can establish the flexibility and freedom of choice you could only dream about at your corporate job. It can lead to that revered work/life balance.
The people you surround yourself with are people you choose. No more putting up with that lousy boss or inefficient assistant.
Forget bureaucracy. You can eliminate the layers, cut through the red tape and get things done. Fast.
Accomplishment is a beautiful thing. Starting your own business will make you proud. It’s quite an achievement.
You can tap into what you love, work that really drives you and feeds your soul.
Lead your field with a radical new concept or technology that a large company wouldn’t dare to do. You don’t need a committee to ratify the concept.
Love a challenge? Here’s your big chance. It can be a motivated, energizing experience for those who thrive by upping the game.
Solving humanitarian issues can be your focus, if you like. Set an agenda that benefits others. Or give a part of proceeds to a charity.
By your positioning and your screening process, you choose the clients you’d like to work with. No more unreasonable demands or thankless jobs.

All of a sudden, the positive attributes outweigh your fears. Go on. Make a difference. Start a business. It will change your world.

For more tips on earning and succeeding with your startup, go to http://businessrebellion.com/mastertask for all the details you need in your business plan.