Starting a small business has always been a major goal for many Americans. However, many people allow petty obstacles to obstruct their vision and eventually abort the long awaited dream of business ownership. Student loans are one of those obstacles that I see people deal with regularly. When asking yourself, “should I start a small business while still having student loans”, you need to answer a litany of questions and be totally sure about your plans. I’ve detailed a few questions to ask before you start the 2013 version of Apple.
A) Are you sold on your business plan? Hey, you must be 100% sure that your business idea will work even if you only have a 2% chance of success. Remember, with business, your taking a chance to create freedom and capital. If it were that easy, many people would be starting successful services. Make sure you have the buy-in of the most important member of the team first, yourself.
B) How fast can the loan be paid back? If you believe your loan can be repaid quickly, go ahead and pay it off before you start. Avoid being overleveraged with too much debt and limited capital. If the business will generate a significant profit from day one and you can verify this before you began, then you give the business your all and pay the loan on time. The significant capital your business brings in should allow you to repay back the loan fast.
C) What type of business are you starting and how much will it cost? Remember the financial crisis of 2008? It resulted in many people losing their homes and much more due to false hopes and poor planning. I can almost guarantee you that if you convince the bank to loan you $50,000 for a business venture, you’ll take it and run. This is what got many Americans underwater in 2008, the bank gave them more than they could handle and they doomed themselves. Remember, you need to know exactly how much you need from the bank and have a plan together to not only pay your student debts but the debts from the business loan assuming you need one. Poor planning can cause for major stress so make a good decision here.
All and all, I’m for pursuing your dreams and going for the business whenever you see fit. Especially if your business lies in an emerging market, you must strike while the irons hot. Otherwise, you could be late to the party and miss out on the major profits ahead. You must also consider your family and living situation. People with families tend to be more conservative with their business decisions and consider their families to be first priority. All things considered if you have an extra income from a spouse that can support your needs while you get the business off the ground, that’s even better. You won’t have the stress of making loan payments and bringing in the bacon. No matter what path you choose, make wise decisions and be sure to consider all the factors before diving in. Business is not for the weak and unsure so have your game tight before you take the plunge.