Sometimes, an employee realizes it may be time to transition into entrepreneurship and become a business owner, rather than an employee, and it may be time for him/her to take the leap into entrepreneurship. To be a business owner, not someone else’s hireling.

That can be scary – I know, I’ve been there, I’ve taken the leap. It may not be for everyone, but I have never regretted it.

With the right mindset and the right guidance – and if you have the passion – you can get there!

And we at RFG can help you do it.

How do you get past the fear and make the transition?

Have Enough Cash on Hand

Don’t hamstring your fledgling dream by shortchanging it – or yourself!

We recommend having a minimum of 6 months’ worth of living expenses in your pocket – and we think having a year’s worth is better still.

Because, especially for those with families to support, it’s important not to get distracted by fears of not having enough money when you forgo that regular paycheck – provided by someone else – as you pursue your dreams.

Build Your Network

It’s crucial, before you start out on your own, to have solid relationships behind you – these can help provide not only support, but momentum.

Your network can include:

• Your future partners, if others in your field – now with your own employer or from another business – want to join you, and you want that, too.
• Any potential mentors – maybe the mentor you have now, perhaps someone new who’s interested in seeing you succeed.
• Your clients and potential clients.
• Potential suppliers of your new business’ needs.
• Attorneys – you will without question need legal services.
• Bankers – you may need funding for your new business.
• One or more trusted business advisors – preferably including a virtual CFO!

A virtual CFO is not just someone who can help you understand and navigate your business finances, risks and opportunities – a vCFO can provide invaluable guidance in getting your business off the ground and help ensure you begin on the right footing.

RFG can help you devise your:

Strategies for Launch

Some considerations when launching a business:

• Plenty of cash – your own and your partners’ (if you will have them) savings and via financing.
• Timing – you want to make sure not to launch your business at the start of a downturn in demand for your field.
• Branding – devising of logos, your business’ website, strategic use of social media, etc.
• Your clientele – do you have people/businesses willing to contract with your new firm? You should, before you launch.

Exit Strategy

It’s vital to develop a strategy to exit your current position which takes into account:

• Not burning bridges – you want all the goodwill you can amass/retain. Resolve to be professional and courteous throughout your exit.
• Ensuring you aren’t stymied before you begin with a non-compete contract. Notably, the Federal Trade Commission’s (FTC) new rule on non-compete clauses, published May 7, 2024, and, absent an unfavorable court decision against it, set to go into effect on September 4, 2024, would render many existing non-compete clauses unenforceable for all but “senior executives.” However, several lawsuits are pending against the FTC concerning this new rule; none has been adjudicated.
• Emphasizing to your employer all the positives about your experience there.
• Giving a fair notice before your departure is essential. The length of the notice period may vary depending on the specific business, industry, or role you fill for your current employer.
• Doing your job wholeheartedly before you leave as you did when you started.

You may (and probably do, if you’ve been in your job for any significant length of time) have dissatisfaction with your current employer. But you always have this choice: whether to leave a sweet or a bitter taste behind you.

How would you really like to be thought of, after you leave? As someone your employer is proud to have mentored, or as an ungrateful opportunist?

The choice is always yours. Choose wisely, plan and act accordingly.

Choice of Entity

It’s important to choose the right entity designation for your business, as this will have far-reaching effects and, potentially, tax implications.

Your business might best be designated a:

• Sole proprietorship
• Partnership
• Limited Liability Corporation (LLC)
• S Corporation
• C Corporation

Which designation best fits your new business depends on a number of factors – let your virtual CFO, in possession of all relevant facts, guide you on this choice.

Budget & Forecasts

Preparation of realistic 2-to-5-year budgets and financial forecasts based on all the variables relevant to your new business – e.g., your market, your ready and potential clientele, supply costs, payroll, etc. – is an essential part of preparing to launch a business.

Business Plan

A well thought-out, professionally vetted business plan is essential if you hope to obtain outside financing – and it’s best practice even if you don’t.

Your business plan should include:

• An executive summary.
• A description of your company, and an outline of its structure.
• Details of the product(s) or service(s) your business will offer.
• A market analysis.
• Your marketing and sales strategy.
• Your financial projections for the business.
• Any relevant data pertaining to licenses, patents, data security, etc.

A good business plan reassures your bankers, your potential clients and suppliers (and yourself!) that you’ve done your homework and aren’t flying by the seat of your pants.

Insurance Needs

Your new business will need various types of insurance – but which types?

That’s something which will depend on your business.

Consult your virtual CFO on what types of insurance are necessary immediately and which, if any, can be adopted at a later point.

Tax Planning – Business & Personal

You should ensure that your business takes advantage of every opportunity for tax savings – and there’s no need to stop there!

Obtain tax planning advice for yourself, personally, to ensure you hold onto as much of your hard-earned assets as legally possible.

In the past few years, RFG has helped employees in various fields become entrepreneurs and their own bosses – and the new businesses we’ve helped them create have all flourished within two years of start-up.

Are you ready to take the leap and become captain of your own ship? Please click here to email us directly – there’s nothing we love more than helping you achieve your goals and making your dreams your reality.

Until next Wednesday –

Peace,

Eric