SouthernWorldwide.com – Launching your own business can be an attractive prospect, especially given the current challenging job market. However, thorough preparation is crucial to mitigate risks and pave the way for success.
CBS News business analyst Jill Schlesinger suggests testing the entrepreneurial waters by starting a side hustle while still employed. This approach allows you to maintain your current income and employment benefits as a safety net.
Strategic Planning Before Committing
“It’s an excellent strategy to test your business concept without fully committing,” Schlesinger advised on “CBS Mornings” with co-host Nate Burleson. She highlighted her own extensive experience as a business owner.
“We don’t want you to abandon all those valuable benefits without first understanding your potential upside,” she emphasized. Schlesinger stressed the importance of considering what you might be giving up when you decide to go solo.
Starting your own business often means foregoing employer-sponsored retirement contributions and health insurance. Additionally, you’ll need to manage payroll and navigate various tax obligations.
“If you work for yourself, you are responsible for both employee and employer contributions,” Schlesinger explained to “CBS Mornings.”
“There are numerous benefits that might be bundled with employment that you may not even be utilizing currently,” she added. “These include legal services, health insurance, and health savings accounts – all of which hold significant value.”
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Schlesinger identified health insurance as a primary concern for aspiring business owners. Available options include:
- Continuing coverage under an employer’s plan through COBRA for a defined period. (COBRA, the Consolidated Omnibus Budget Reconciliation Act, is a federal law.)
- Enrolling in a spouse’s or partner’s health insurance plan.
- Securing a plan through the Affordable Care Act marketplace at healthcare.gov.
- Exploring association health plans, which enable small businesses to collectively offer insurance coverage, as detailed by healthinsurance.org.
Understanding your tax obligations based on your business structure is also essential. The IRS notes that self-employed individuals are required to file their own tax returns and pay estimated taxes on a quarterly basis.
Businesses can also be structured as S Corporations or limited liability companies, each with distinct tax regulations, advantages, and requirements.
Regardless of the chosen business structure, Schlesinger strongly recommends consulting with at least one expert to help formulate a comprehensive plan.
“Avoid relying solely on AI tools like Claude or ChatGPT,” she cautioned. “Engage with professionals such as a CPA or CFP to guide you through the intricacies of business structure.”
Edited by Alain Sherter.
