Business Owner Risk Assessment

People go into business for a variety of reasons.  But finding one you feel comfortable with is an important and time consuming process.  It's true that you'll need to consider your capital and staffing needs, time requirements, resources, location, etc., but you should learn everything you can about your potential business. That background work could save you from financial ruin.  For instance, if you're thinking of opening a restaurant, be sure to attend food conventions, talk to other restaurant owners, work behind the scenes, and discusss your menu ideas with potential customers. 

But this is just the tip of the iceberg.  As a business owner, you'll face a number of risks and other responsibilities of equal measure.  Did you know:

• If you need financing for your proposed business, you will have to provide 10-50% (or more) of the total funds?
• In order to get a business loan you will be expected to personally guarantee its repayment?  And yes, that means putting your house, car, and other possessions up as collateral.
• It's normal for a small business not to earn a profit in the first two years?  What sources of income or savings can you use to survive on until your business becomes profitable?
• The number one reason that small businesses fail is because they lacked sufficient working capital to survive the first few years of operation?
• The IRS can and will seize your personal and business assets to satisfiy your business taxes?

These are just some of the crucial factors to consider before beginning a new business venture.  So look before you leap!  Do your homework and undesrtand what you're getting into.

What are some of the risks, sacrifices and/or needs that you've discovered while evaluating your business idea?