I was talking with a good friend of mine the other day about how he would love to be able to go into business for himself. This is someone I have known for over 20 years.
We went to school and university together and he is one of the smartest, hard-working and nicest guys I know. Since university I have watched him work his way up the corporate ladder where he is now well positioned, if he so chooses, to capitalise on his experience and growing reputation to cement his place in corporate leadership within his industry throughout his forties and fifties.
On the other hand, he is now equally well positioned to capitalise on those same things and build a business of his own. And while there is a part of him that would dearly love to do it (his heart), another part (his head) worries about the potential impact that quitting his well paying job might have in regards to his lifestyle and being able to take care of his financial responsibilities as a husband and father, a homeowner, and dare I say it, his reputation as a responsible, successful and respectable member of society. And rightly so. What kind of a person would you be if you didn’t carefully consider the potential impact upon the people you love most, and your financial well-being? A foolhardy, naive, reckless person is what.
(This is one of the reasons it helps to start your entrepreneurial journey as young as possible – before you get accustomed to the security of a regular paycheck and have all the responsibilities we accumulate as we get older.)
Does this sound familiar? Do you, or could someone you know, relate to this?
Because over the course of my journey I have met hundreds of lovely people grappling with this exact same scenario. Their entrepreneurial spirit is locked in a perpetual and epic battle with the forces of logic, reason and ‘reality’. And the worst part of it is – most people will end up losing this battle, their inner entrepreneur having been choked, suffocated and head-locked, just long enough for them to realise one day that it’s the end of the 10th round and they have left it too late. At which time the entrepreneurial flame is snuffed out altogether, and there is only darkness…
Now that’s depressing!
So what’s the answer here? Well it’s true that starting any business involves an element of risk. But then so is relying on a job. And to be honest, as your entrepreneurial experience grows, the risk involved in starting new businesses diminishes as you become a better entrepreneur.
Why? Because really successful entrepreneurs (the ones who do it again and again – not just one hit wonders) learn how to set things up in a way that mitigates much of the risk involved. For instance, they won’t develop a product until they have validated demand for it in the market. They won’t launch a new venture until they have the investors they need lined up. They won’t enter new markets until they have already established partners in that market.
And it’s this way of thinking that can help those addicted to the safety of a paycheck make their business building dreams a reality in a safe and steady fashion.
So I asked my friend, “Well if launching your own business now isn’t possible, do you think that if you began working on it now, it might be possible for you to be in a position to launch your business in ten years?” Straight away, just by adjusting the time frame, I could sense that the idea shifted in my friends mind from being something that was impossible and implausible, to not just possible, but very plausible.
Overoptimism is one of a new entrepreneur’s biggest blind spots and gets a lot of people in trouble. On the other hand, experienced entrepreneurs know that everything inevitably takes at least twice as long and three times as much money as their best guess. So if you dream of starting your own business, take the pressure off yourself by setting a time frame that makes you go, “Yeah absolutely I could make it happen within that time.” Write down the words, “Within ABC years I will be living my dreams as the owner of a successful new XYZ business”. Then date it, sign it, and stick it somewhere you will see it every day. Better still, talk to your partner and get their support for your goal. Often half the job is getting them to believe it could be possible. And again, by choosing a more believable time frame you are less likely to be met with the sideways glances, rolling eyeballs and scepticism that well meaning but smaller thinking partners often greet big ideas with.
The next thing to do is gift yourself a little bit of time each day, or at a minimum once a week, to work, research, think or dream about the business you are going to start. In life, we get what we think about most of the time. So the first thing you need to do is increase the time you are thinking about your business from zero, to 10 minutes a day, or an hour a week or as much as you can manage. This will start to build a habit. The habit of taking action towards your goals. And obviously it will also allow you to start planning and working on your business. Learn about building businesses. Learn about other businesses like the one you want to start. Learn about the skills you will need to acquire. Prepare a business plan because it will force you to answer a whole lot of questions you’ve never considered.
You will never be perfectly prepared. But as much as possible, you want to go into your first business with your eyes wide open.
Lastly, make money.
What do I mean by that? If at all possible, make some sales before you launch your business. If it’s a product or service you’re able to provide without the need to invest much capital, create a prototype, or service offer, or draft (if it’s an informational product) and go out and make some sales. Deliver on your promise to the best of your ability, while you are still holding down your day job. Yes you will be busy. But you will learn more from this than any other exercise and it’s better than being busy watching TV.
If it’s a product or service you can’t deliver without capital, then go out and get some forward orders.
That is, validate the demand for your product or service by talking to potential customers. Be upfront and explain that you’re wanting to create a product or service to help them solve a problem you believe they have. And share with them the idea for your product or service so far. Ask them – if a product or service such as the one I have described was available, would you buy it? If so, what price would you be prepared to pay? If I could deliver said product or service in that price range, can I put your name down now so that I can come back to you when we are ready to launch?
If not, what would I need to do to this product or service to make it something you would buy? You can then take that information and use it to tweak your product until you know you have something the market wants.
Basically, your goal is to start to create cash flow before you quit your job. Ideally, enough cash flow to replace the income you’re earning from your day job or at least cover your basic monthly outgoings. Or if that’s not possible, create a pipeline of customers who have already expressed their interest, with which you can more confidently go ahead and raise the money you need, or quit your job.
In other words, how to create a business without quitting your day job, is to create a business while you still have your day job.
Could you see yourself doing this within ten years time? How about five? How about two? I wonder…
(Note: The other option is of course to simply take a deep breath and dive on in. Many people will argue that in reality this is the fastest way to learn what you will need to learn. But while stories of people who had an idea and within a week had quit their jobs, sold their houses, and jumped headfirst into the deep end of entrepreneurship make for entertaining and inspiring reading, this is certainly not what I would recommend for the majority of people. It’s like a beginner mountaineer trying to climb K2 on their first day out! You are likely to do yourself an injury and put yourself off altogether. In fact, knowing what I know from doing this myself, I would only recommend this to people who are young, fit, childless, have no financial responsibilities and are prepared to live on two minute noodles for a few years if they have to.)