Out of Work? What to Consider Before Taking the Entrepreneurial Plunge

With the U.S. unemployment rate remaining stubbornly high (and not looking like it will go down any time soon), a diverse population of people of sundry ages and backgrounds is suddenly being faced with the daunting question: What should I do now?

History attests to the fact that out of the ashes of economic difficulty is much innovation and creativity born. Our present economic condition is no different. According to the Kauffman Index of Entrepreneurial Activity, a leading U.S. indicator of new-business creation, there has been a significant year-over-year increase in the number of new businesses established precisely as the recession began to take hold, during the years 2007 to 2009.

If you were recently laid off and are looking turn this setback into an opportunity to start your own business then make sure that you consider the questions mentioned below. You owe it to yourself to get started in this new period in your life on right foot and to do all you can to ensure that entrepreneurship is right for you in the first place.

-What is your current financial situation? Do you have the financial resources needed to start a business? What are your current financial obligations? If you have not already done so, you should organize any bills or other outstanding debt, and determine your monthly expenses. You should also itemize potential sources of financing for your new venture including personal assets as well as those friends and family members who you may be able to approach for a loan.

-What experience, training, skills, or knowledge do you possess that can be used to run a business? Have you received any formal business management, business financing, or marketing training? If not, is it vital that you learn the basics of owning and operating your own company. There are numerous free business how-to articles, webinars, and tutorials available online, via the SBA or SCORE, for example that can help fill in this information gap. Some groups, such as SCORE and and Micro Mentor also provide free business consulting services. Additionally, if you are lacking in business management know-how, you could enter into a business partnership with others who do.

-Does your business idea fit your personality? You can't run a restaurant if you don't like food, and you'll have a hard time selling your services if you shy away from social situations. Make an effort to enter into an industry and chose a business model that fits you and your unique strengths and qualities.

-Do you have the available time and commitment needed to start your own business?Success doesn't typically fall in one's lap; you have to work for it. Realize that starting and operating your own business takes a significant amount of time, commitment, and perseverance, and the results of all your hard work may not always show up at the beginning.

-Is the business idea viable? When you come up with an idea for a new business, it may be hard to see the faults or potential pitfalls hidden within. For this reason it is essential that an aspiring entrepreneur seek out the guidance of either an experienced business owner, a seasoned member of the industry in question, or a qualified consultant.

In short, becoming entrepreneur may seem alluring- especially if you are currently out of work or under-employed. But it is a decision that in most cases should be weighed carefully. Doing so may save yourself a lot of grief down the line.