It’s one of the most significant leaps you’ll ever make, but as many will vouch for, starting your own business can be one of the most rewarding steps you make in life.

At the same time, it’s anything but easy. Unfortunately, a quick glance at new business statistics will tell you this – many fail in their first year in operation.

So, what are the signs that you’re ready to take the plunge? In today’s piece, we’ll take a look through some of them.

You have a backdrop of financial savings

Let’s start with the practicalities. Starting your own business can put a substantial financial burden on you. After all, you no longer have that guaranteed salary that has served you well through life.

Ultimately, you need to ask yourself how you are going to survive. In an ideal world, you’ll have 12 months’ worth of savings to fall back on; this will at least allow you to keep your head above water as you find your feet. It will also mean that you won’t take any hasty decisions in the early days in a bid to make so-called easy cash.

You know your true costs

Of course, it’s not just about having the right level of savings. You also need to be aware of your outgoings. In your previous job, your employer may have taken care of these.

Now, you’re on your own. As such, you need to know precisely how much your business will cost you each month. Don’t make the mistake of only accounting for the significant expenses such as rent and potential employee costs. Instead, look at the bigger picture, considering the likes of your professional insurance obligations, stationary, business rates and anything in between!

You have a business plan

A lot of people enter the world of business without a clear plan. This is one of the key reasons why so many fail in their first year.

You need to know what your business is going to do, how it’s going to do it, and who it’s going to do it for. In short, you need to have a plan. This will give you a much better chance of success than going in blind.

You’re passionate about your idea

Of course, it’s not just about having a plan. You also need to be passionate about your idea. After all, you’ll spend a lot of time working on it.

If you don’t believe in your idea, it won’t be easy to convince others to invest their time and money in it. Passion is infectious, so make sure you have it in bucket-loads before you take the plunge.

You’re ready for the challenges

Starting your own business is challenging. There are no two ways about it. You need to be prepared for the challenges that lie ahead.

This includes the long hours, the financial insecurity, and the fact that you’ll be answerable to nobody but yourself. If you’re not ready for this, it’s probably not the right time to start your own business.

Infographic created by Mowery & Schoenfeld