How are you with handling money
11) Are you comfortable dealing with money ?
Some people are terribly inept at finances. Others can do it but hate it. Like it or not, financial management is an inescapable fact of business ownership. You’ll be dealing with complex monetary issues, from financing the business to handling the day-to-day receipts.
You’ll be responsible for paying the bills,
making the bank deposits, doing the payroll, and sending in withholding taxes and quarterly reports to the IRS and the state. You may be handling substantial amounts of cash, and there are certain risks inherent in that responsibility.
You’ll also be making business plans.
These are detailed projections of your income and expenses for a given period of time, usually three months, six months, or a year. In some ways, they’re quite simple—you want to maximize your income and minimize your expenses. But they take careful planning and budgeting.
What are the minimum staffing expenses going to be to operate the business?
What will your overhead and utilities be? How much money can you spend on advertising? When are the taxes due? How will you determine the price of your products? What will you charge for shipping and handling?
Any financial experience you may have had will help you with this aspect of your business. And if you like this type of activity, it will be to your advantage. But if you find it burdensome, you’ll have to be ready to deal with it.
12 ) Are you financially prepared to open a business ?
Starting any business requires money. The nice thing about E-Commerce is that you can make it about as bare-bones as you care to, particularly if you’re starting a small operation that you’ll operate in your spare time. Many people have started E-Commerce businesses for just a relatively small amount of capital .
But the bigger your dreams,
the more money you’re going to need. If you’re planning a full-time E-Commerce business with numerous products, the start-up costs will be considerably higher. Then a whole new batch of considerations comes into play. Do you have the financial reserves to support you and your family for a period of time until business picks up?
Some business advisers say you should have enough on hand to survive for a year with no income whatsoever. While that may be an unrealistic goal, you do need to consider what happens if the business fails altogether. Do you have the resources to weather such a catastrophe?
Before you begin planning your business, you need to take a careful look at your finances. How much of your available capital are you willing to risk? Are you willing to personally sign for a business loan? What do you have to offer as collateral?
How much cash will you have in reserve for emergencies? If you don’t have enough to start the business yourself, are you willing to take on a partner or partners? Are you staking your entire financial future on the business?
Under capitalization is the main cause of failure for small businesses in the United States.
Yet many people, caught up in the entrepreneurial fever, continue to start businesses on a shoestring, woefully unprepared to deal with the bad times. If you can’t start your business with a comfortable financial cushion beneath you, you may be taking a risk you can’t afford.
13 ) Is your family ready to make the commitment
Whether your family is actively involved in the business or not, business ownership is going to have a huge effect on them. If you’re the only one involved in its day-to-day operation, the rest of the family isn’t going to see you very much. If they’re used to having you around on evenings and weekends, this may cause problems.
Your spouse may be unhappy having less time to go out to dinner or the movies.
Your absence may also mean he or she is going to have to assume a lot more responsibility at home— chauffeuring the kids here and there, helping with homework, doing the shopping, cooking the meals, cleaning the house, paying the bills, and all the other odds and ends that are part of day-to-day life.
Your kids may have to make some big adjustments, too. You might not be available for Little League games, dance recitals, school plays, and all the other events of childhood.
There may also be some financial adjustments for your family. If you’re like most fledgling business owners, you’ll be running a tight ship for a few years. Your family will have to realize there might not be money for some of the luxuries they used to take for granted.
It’s extremely important to think about potential family problems early in the process.
Sit everyone down together and tell them what you’re thinking of doing. Make sure they know what it will mean to the family’s day-to-day routine and find out how they feel about it. Their support will make your life a lot easier. You’re going to have enough stress just handling the business. The last thing you’ll need is a family crisis.
The other side of the coin is having your family members working in the business with you. The dynamics of family businesses can be quite volatile, and you’ll want to make sure everyone can get along. A major question will be, Who’s the boss? Are the lines of authority clearly drawn?
Are you and your spouse going to be equals in ownership and operation of the business? If so, are you able to work together cheerfully and consider each other’s opinions? If you are, you’ll probably have no problem running the company together. But if you can’t even agree on what kind of soap to use, you may have trouble.
14 ) can you handle stress ?
It comes with the territory. Long hours, endless responsibility, dealing with customers, worrying about money—these can take a huge emotional toll. Some people thrive on stress. It actually makes them perform better. They stay calm in a crisis and can react quickly to change. Others fall apart when things get too hectic. Which kind of person are you?
15 ) Are you in good health ?
Running a business can be physically taxing as well. You may have to spend a lot of time on your feet and not get as much sleep as you’d like. You may not have as much time to eat properly or exercise regularly.
There may be activities in the business that require a fair amount of physical strength. Take an inventory of your physical health. Do you have any chronic problems that might prevent you from operating the business efficiently?
Remember, when you own the business,
you have to be there day after day. A long absence because of a serious illness could spell disaster.
These questions may be heart wrenching and difficult to consider but are essential if you are to consider whether you are ready willing and able to run your own E-Commerce BUSINESS?