Leaving a good job or any kind of security is a hard thing to do.
When you reveal to family and friends, you’re ditching steady pay in the hopes of generating your own income you might be met with both well-wishes and concern.
And, though sometimes you wish people would quit asking how you’re going to produce it, or what you’re going to do to fund it, or which platforms will be used to sell and promote what you have to offer…these questions illustrate the first and fundamental challenges of the entrepreneurial journey.
When we hear of dozens of people who took the leap and now have more money, more freedom, and more happiness, it’s a good idea also to be a bit realistic and look at all relevant statistics.
About 80% of startups will not see their fifth year, and—of the 20% that do—80% of those will not make it to 10. That means only about 4% are even surviving past year 10, and not all of those are massively successful—or even profitable!
I say this, not to scare you, but I do want to let new and soon-to-be entrepreneurs know that the biggest goals may have challenging routes.
This is a three-part series on how to make the switch with minimum risks. The first part will cover the questions you’ll need to answer before making a move.
The next is the preparation you’ll want to make, and the final part of this series is the first steps you’re going to be taking on your new path.
But first: where do you start?
Set The Date
When choosing to transition you want to give yourself enough time to prepare. Thinking ahead will give you the chance to solve problems before your livelihood is at stake. Having said that, waiting indefinitely can cause your opportunity to pass, or you may never take the leap.
To balance these opposites here’s what you can do:
If you’re thinking of making the leap, put down a date and declare: “By this date, I’m going to make a decision!”. Whether that’s putting in your resignation or deciding not to pursue this, either is okay; you just don’t want to be open ended. The date should be roughly 3-6 months out, which – in addition to allowing you enough of a notice period at work – should also give you time to tackle some questions listed below.
Answer Those Annoying Questions
“Are you sure you know what you’re doing?”
Confidence is great…information is better. You may be very sure, in your gut or your heart, that you’re going to make it, but there will always be that “what if…?” scenario in your head.
A big bit of advice: be able to answer the tough, annoying questions that your friends and family will have now. It’s one of the best ways to prepare you for what is going to come next.
The words ‘business plan’ can be a barrier to entry for entrepreneurs as it has the ring of being daunting and difficult, but honestly, setting your first business plan is no different than answering a self-survey. By answering five questions, you’ll reveal where your gaps are and where to focus your energy to make your plan more complete.
As if you were interviewing your future business, ask yourself:
What is it you do?
Explain simply your product/service in one sentence. For example: “we offer affordable, in-home math tutoring for 12 – 14-year-old kids.”
Why are you doing it?
What did you notice was missing, could be differently or improved? Being another one of the same will not help you.
How you plan to do it?
How do you plan to create this product or offer this service? Think funding, time, cost, and how much of it can you offer in a day.
Who would be interested?
Who would you plan to sell this to? Age, sex, location, etc.? Who is buying similar products: moms, dads, kids, teens, elders?
Where would you sell?
Which platforms or shops sell similar products to yours? Where do you think people in answer #4 look/go for products or services like yours?
Know Your Growth
Starting a business is a step in the journey, not the goal. You need to decide what the end goal looks like, what it means. One brilliant resource is the Cashflow Quadrant by Robert Kiyosaki. He talks about the four steps you can take:
Employee: Have a job and get paid to show up.
Self-Employed: Own a job, but one which requires the owner to function day to day.
Business Owner: Owns one or more business + the businesses can function without them being present. This business is now an asset and generates income for the owner without he or she needing to be present.
Investor: Someone who makes money through multiple assets and income streams.
Your first leap of leaving employee status is the leap of faith—calling upon your grit, skill, knowledge and determination.
The next leap from self-employed to a business owner isn’t one of faith but one of growth and efficiency. Remember: ‘hope’ is not a business strategy! This upward development keeps you from becoming like 80% of other SME’s which fail in the first five years.
To keep us from having to drag our things back to our old office in defeat, we must learn we what it takes to grow our ventures into something sustainable and progressive.
That’s where the preparation comes in, which is covered in part 2. In the meantime, get clarity around your immediate and long-term goals, boost your confidence, and let’s get your empire started!