Starting a new business is tough; and it may even demand that you change your lifestyle. Here are the biggest financial concerns that you need to consider when planning to start a business:

It would be great if your new business could earn a profit and pay your salary right from day one. Alas, this is not often the case. Experts estimate that it takes about six months for a start-up small business to begin earning profits.

To survive the next six months, you must have adequate savings to cover both the costs of your new business, as well as your living expenses. Now is the time to review your financial situation, and see where you can possibly get the money. Do you have adequate savings in the bank, or do you have any investments that you can access? Can your wife support the whole family while you dedicate your time and resources to your new business?

If money is tight, you should also consider reducing your expenses. Go through all the bills and expenses that you and your family incur in a month. List down your monthly fixed expenses, which include such things as insurance, home/ property, car payments, utilities, savings, etc. Then write down your flexible expenses, such as food (including dinners in restaurants), clothing/ personal care, entertainment, transportation (gas), etc.

Then begin to cut out the fat in your budget. Perhaps you can eat out once a month, instead of twice a week as you used to. Or maybe you can look for ways to save on electricity bills in your household. Or consider getting your mortgage refinanced to lower your interest rates and save big on mortgage payments. Look for every possible way where you can squeeze out savings from your budget.

If your savings fall short no matter how much you stretch your resources, you need to begin looking at other possible sources of capital. Other money sources may be available from family members, partners, or friends. You may also want to try getting bank loans, loans from the government, credit card, venture capital companies, mortgage property, or any other source that you can think of.

Getting credit often depends on the strength of your credit history, availability of collateral, and capability to repay the loan. If you have equity in your home, you may be able to get a home equity line of credit that you can use to jumpstart your new business. However, banks may be more inclined to approve loan applications of someone with a steady paycheck and job, instead of someone who recently quit his or her job and whose entrepreneurial future is still uncertain.

When looking at credits and loans to start a business, a good rule of thumb is that you should not borrow more money than is necessary to start your business. Often, the more money you borrow, the less control you will have.

Whether you will max out your credit cards, avail of every possible line of credit you can get your hands on, the reality is that you could soon find yourself neck deep in debt.

Being in debt for your business can have two implications: (a) first, you may need to temporarily push aside your other financial goals (e.g. save for retirement or college education of your children); and (b) oftentimes, you will personally guarantee any loans or credit extended to your business.

You will find it hard to combine securing resources for your business along with your other financial goals. With resources so tight and every single spare cent thrown into the business, it will be extremely hard to dedicate any resources for retirement savings, plans to buy a house, or college education funds for your kids. If things go well with your new business, you will be able to afford all your financial goals and all your sacrifices will be well worth it.

Even if you get approved for credit, you need to consider that the lender can look at the debt you will use for your business as your own personal debt. You may be asked to personally guarantee the loan. If the business goes south, you can end up facing huge amounts of debt and a tarnished credit record.

When you leave the security of your job to join the growing ranks of the self-employed, one of the important things you are leaving is the health insurance coverage provided by your employer. As an entrepreneur, you will now be responsible for your own health insurance. Are you prepared to pay for this expense?

A recent study of NASE on the 'Affordability in Health Care' showed that “more than two-thirds of micro-business owners say they are unable to afford health insurance for themselves or their employees.” Insurance rates offered to self-employed and micro-businesses are significantly higher than those paid by larger businesses and coverage options that are much more limited.

One option is to temporarily keep the coverage provided by your employer for as long as 18 months under the Consolidated Omnibus Budget Reconciliation Act (COBRA) regulations. You will need to pay the full premiums on your policy plus administrative costs. Another option is get health insurance coverage as a dependent of your working spouse.

If you get your own health insurance, your options may be limited to: individual health insurance coverage purchased directly from a provider, or group coverage purchased through a professional association or civic group (e.g., trade group, Chamber of Commerce, etc.). Individual insurance is typically more expensive than group coverage, but it may also provide more freedom to customize the policy to suit your personal needs.