The financial stability of a paycheck is a big fat illusion. If you are an employee, you probably have a salary, which is divided in monthly or weekly paychecks. Because you get the same amount in each check, you may believe that you have a stable source of income and can live your life without fear of financial instability.

This is dangerous thinking that puts your financial life at risk.

Layoffs, downsizing, mergers, takeovers and incompetent managers are a well-documented part of corporate life. I have seen all of them in my career as a corporate employee, and even more in my career as a corporate consultant. I have been witness to conversations where managers had to lay off long-time employees with no notice. These employees were shocked, hurt, scared and angry. This work was horrible and gut-wrenching but I learned something very important from it: Never rely on your status as an employee to insulate you from financial instability.

So if this reason has stopped you from starting your own business, follow these steps to see if any of your fears are warranted.

Step 1: Get crystal clear how much money you will need to start up your venture

- If you have written an effective business plan, you should be able to predict how much money you will need to start-up and sustain your business. You haven't written a business plan yet? You better get cracking at it. In addition to clarifying your idea, it will force you to organize your thoughts, financials and start-up plans which will only help you to make it a reality. Good sources are Rhonda Abram's The Successful Business Plan, Rich Dad's The ABC's of Writing Winning Business Plans and the free resources of SCORE.

- Make a budget of your monthly living expenses. This will give you a picture of your overall cash needs.

Step 2: Meet with a solid, professional, well-researched and well-recommended financial planner

- While I don't believe the illusion that a full-time job = security, I don't want you to make a foolish decision that will adversely impact your family and financial health. You need to look at implications of leaving your corporate job in the areas of insurance, investments and retirement benefits. Get the whole picture before you make a quick move. I recently spoke with a smart, competent and capable government employee who wants to start his own business but has just 5 years to go until retirement. While I think he has what it takes to be successful on his own, I would never counsel him to quit without consulting a professional financial planner and doing tons of research to test his business plans.

Step 3: Set specific financial goals to meet your cash needs

- Savings: how much of your paycheck will you have to save per month in order to meet your goals?

- Raising cash: How much cash do you need to raise from outside sources including investors? (note: although some people recommend it, unless you have no alternatives, I don't recommend borrowing money from your family and close friends. There are too many emotionally charged issues around relatives and money, and you could damage critical relationships that you need for personal well-being. That is just my 2 cents.)

Step 4: Get creative about funding strategies

- There may be ways that you can cover the costs of start-up expenses by bartering with friends and colleagues. Do you want to start a coaching business? Maybe you can barter some coaching sessions with your accountant.

- Clean out your house of unused valuables and hold a sale. If you live in a warmer climate, have it outside. If not, jump on eBay. Convert things that take up space in your house to money that you need to fund your dreams.

Step 5: Learn everything you can about your new venture

- Write a solid business plan and get honest feedback from knowledgeable experts.

- Read every book you can get your hands on about your business topic.

- Google websites, blogs and online forums to learn about your marketplace.

- Identify very successful entrepreneurs in your field and follow their work, study their business models and ask them what it has taken to be successful.

- Attend teleconferences, webinars and in-person classes.

- The more that you know about your business, the greater chance you have at being successful at it.

It takes a huge amount of work to launch and grow a successful business. Don't get scared off by a perception of financial risk. If you do very careful research and make sure you have a viable plan, you can have some concrete data to weigh your important decision. Whatever you do, please do not be lulled into complacency by your regular paycheck.

© 2005 Pamela Stewart. All rights reserved.