4....The Risk And The Reward
Its quite normal to be frightened of the unknown and at some point you will need to weigh up the potential risk versus the potential reward.
It can be a difficult think, removing the emotion from running a business, but that's exactly what you need to do in order to make the right decision.
You are going into business for one reason and one reason only and that reason is to make money.
First of all ask yourself, how much would I be earning if I went out and got myself a regular job? How much would I make in interest if I invested the money I am going to put into my business into a long term investment account?
If the answer to these questions is not much less or more than what I will be making from my business, then it's time for a reality check.
So what's an acceptable return? For the purposes of this website we will class small business's as a high risk investment and the minimum rate of return for a high risk investment should be no less than 30% and preferably closer to 50%.
If you don't like the result of this little exercise it doesn't have to be the end of the dream. It might mean going back to the drawing board and starting again, or tweaking the business model a bit. At the very least I would suggest sitting down with your accountant and asking their opinion. Since accountants generally see the entire world as a series of numbers, they will give it to you straight.
