How to Create a Safety Net as a Solo Entrepreneur
As an entrepreneur, you can’t always depend on continual business. There may be long stretches of time without business, and your business could even fail. It’s important that you have certain safety measures in place in order to protect yourself.
Build an Emergency Fund
One of the best forms of protection is an emergency fund. You can’t predict what will happen with your business and so you should have enough money saved up. This money can help keep you afloat if business isn’t steady and it can also be used in case the business fails. An emergency fund may also be helpful in addressing anything unexpected that might come up in your business. Starting a new business is always a risk. You want to make sure you are financially secure and protected to avoid losing too much money. Some tips for building an emergency fund include keeping your goals small, saving even when business is good, and possibly getting loans.
Protect Yourself with Insurance
Purchasing insurance is also important. Insurance protects you from unexpected events. The good news is, you typically only need to pay a small amount. Some insurance types you may need for your business are general liability insurance, commercial property insurance, or even workers’ compensation insurance. Before purchasing any new insurance, you should be aware of any insurance you may already be covered by. For example, if you’ve been disabled by an injury you are entitled to Social Security Disability payments. The average Social Security Disability Payment is $1,258 with a maximum possible benefit of $3,011. Make sure you review what you qualify for so you can make an informed decision when purchasing new more insurance.
Find a Partner
Some of the risk of starting your own business comes from doing it alone. Having a partner can be very beneficial both for your business and so you have more security. With a partner, you don’t have to take on the financial burden all on your own. It can be especially beneficial if you have a wealthier partner. When finding someone to partner with, there is a lot to consider. You can choose some close, like a friend or family member. You can also find someone in your field through networking events.
It’s risky to start your own business, so make sure you are well protected. You want to make sure you are financially secure and that you are prepared in case your business is slow or if it fails altogether. Make sure you take some time to get your affairs in order before starting your business.
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