Things to consider when starting your own business

I am in the process of starting my own IT consulting business as a part time gig. I have been doing research into the local market and am sure I can make some extra money doing it. I have also discovered that owning your own business is a lot bigger commitment than most people realize. Here are a few things to weigh if you are thinking of venturing out on your own:

  • Taxes: Any income you make is not only taxed at the federal and state and local level but you must also pay the full amount of FICA (Social Security and Medicare) tax on it. This amounts to 15.3% of the income on top of normal taxes!
  • Time: You have to factor in that not only will you be spending time on doing the actual work but also marketing, accounting, errands, phone calls, sales, etc. Make sure you have the time to do it all or can afford to pay someone to help you!
  • Savings: If you are venturing out on your own full time you need 1 year's of living expenses saved over and above your emergency fund. I recommend this to total 18 months of living expenses to be on the safe side. You also have to keep up this amount at all times!
  • Office Space: You need to have a proper office space in your home dedicated to just business. A rented office is even better but not always feasible. It helps to keep you organized and allows you to separate home from work (very important!).
  • Dedication: You have to be behind your ideas and your business 110%. If you can't put in the time and effort to be successful you should look at other options. It is not easy to run your own successful business and keep it running!
If you can agree to all the things listed here it may be worth a try to have your own business. I suggest starting part time at first before quitting a job. Allow it to grow to the point where you have to quit in order to keep it going and go for it! It is not easy but can be very rewarding both financially and emotionally!