SouthernWorldwide.com – Starting 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.
A practical approach to test the waters before fully committing to running your own business is to develop a side hustle while still employed. This provides a safety net of income and employment benefits, as suggested by CBS News business analyst Jill Schlesinger.
Schlesinger emphasized the value of testing a business concept without making a complete leap. She advised against abandoning valuable benefits without first understanding the potential upside of the new venture.
For those ready to embrace entrepreneurship, it’s important to be aware of what might be sacrificed. This often includes employer retirement contributions and employer-sponsored health insurance, alongside the complexities of payroll and tax obligations.
When you work for yourself, Schlesinger explained, you are responsible for both employee and employer contributions. This means managing various benefits that might have been previously covered, such as legal services, health insurance, and health savings accounts.
Read more : Astros' Alimber Santa Makes MLB History in No-Hitter Debut
Health insurance is a significant consideration for aspiring business owners, Schlesinger pointed out. Available options include:
- Continuing coverage under an employer’s plan through COBRA for a limited period.
- Transitioning to a spouse or partner’s health insurance plan.
- Enrolling in a plan via the Affordable Care Act marketplace at healthcare.gov.
- Exploring association health plans, which allow small businesses to group together for coverage, as noted by healthinsurance.org.
Understanding your tax obligations based on your business structure is also vital. Self-employed individuals must file their own tax returns and pay estimated taxes quarterly, according to the IRS.
Businesses can be structured as S Corporations or limited liability companies, each with its own set of tax rules, benefits, and requirements.
Regardless of the chosen business structure, consulting with experts is highly recommended to develop a solid plan, Schlesinger advised.
She specifically cautioned against relying solely on AI tools like Claude or ChatGPT for business structure advice. Instead, she recommended seeking guidance from qualified professionals such as a CPA (Certified Public Accountant) or CFP (Certified Financial Planner).
