Here we are at the end of the year. Been an interesting ride for sure. So was this the year you started your business because you became a causality of long term unemployment? Or was this the year you took your hobby business full time because your significant other lost their job or got their hours cut? If so welcome to the world of the full time self employed. Whether you’re a one person army or have found the means to go out and hire some people be it as employees or as independent associates.


So not what you are among “Us” do you have what it takes to last. To pass the tests of time and business? If you are this far you have probably gone though the attorney and accountant thing. Just remember that at attorneys and accounts are there to advice you as to your liability and exposure not necessarily as qualified business advisors to dictate where you should take the chance on a project or not. You might have gone as far as hiring a designer to put a corporate identify together of business cards, letterhead and envelope. Maybe got yourself an honest web designer. Maybe you have constructed a business plan. Remember this does not have to be an elaborate document. Unless you’re trotting off to the bank for a loan a 1st or 2nd time business plan is your road map for your business and does not have to be a 44 page document. Maybe you have gotten the answers to the burning question of who is going to buy my stuff. I have yet to see a company that is selling enough stuff go out of business.


If you’re like most new businesses or if you have been hit hard by the recession and are sort of starting over, your long on time and short on cash. So you need to answer as honestly as you can “How long can you hold on” and “How much are you willing to risk?” Yes sport fans life as a business owner is not all wine and dine roses with a fat bank account. It can be sleepless nights, holding your pay check so others can get paid, its praying the bank renews your load and doesn’t call it in.


Ok so if you are still with me take a giant step back and take a deep breath. Clear your head. Now what do you need to become a self-sustaining business? What is your true minimum money need figure. You may want $100,000 but you might only need $42,000. Keep in mind that as a self-employed person there are things like self-employment tax there is paying your own health insurance. There are day to day business expenses marketing expenses, phone and communication expenses, the base cost of your goods or services, your fixed business costs such as rent, gas, electric, garbage, etc. So go on and do the math what is your break even figure?


Let’s say you’re a consultant.  I am picking this because it is relatively easy with no cost of goods to calculate in. Now you are planning on working a 40 hour week, with a couple weeks off for vacation. Ok 50 x 40 = 2000 right? And your goal is to take in $200,000. Well if Mrs. Yant in math class taught me anything it’s that $200,000 / 2000 = 100 an hour. But enter Dr. O’Leary in business 110 at college. He taught be that all those wonderful 2000 hours are not billable. He taught me that probably 1/3 (I have found a way to get it down to 1/6 but don’t tell him) is not billable. So what I am telling you is that you might actually lose 1/3 of your billing time. That is give or take 700 hours. Trotting back to Mrs. Yant 2000 – 700 = 1300 and now I need to be making $153.85 an hour. Doable?


Too many start ups don’t really understand the kind of start up money involved. Working capital necessary to get your business into the profit stage.

Larson Notes & Satire:  I’m on your side, r

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