I’m writing to you because I’m thinking of starting a business. I’m sick and tired of working for my boss, who is a huge asshole, and I’m tired of spending my most precious commodity, my time, building others men’s fortunes.
I’ve always resented being on somebody else’s schedule, and now I have about $25,000 in savings, which is enough to get me through a year, and I’m ready to go out by myself. I plan to work in the web design business, which is what I do now, and I have a few potential clients lined up already. Nothing is signed in ink yet, but I know they would come across to me when the time comes.
What’s your advice for a new business owner? I know you have been running your own business for a while now. What do you have to tell me as a new entrepreneur? Am I doing the right thing, or is this something I’m going to live to regret?
Sincerely, Paul Atkins
A huge congrats on reaching the point of no return. I definitely think you’re doing the right thing, and I always encourage my readers to start their own businesses when the urge takes hold. I did it about 18 months ago now, and it’s without a doubt the best decision of my life.
I’m not going to lie to you, though, running your own business can be tough. There are a lot of lessons to be learned, and at least in my experience, it feels a little like a roller coaster – full of ups and downs and you never know what’s coming next. I know that’s cliché, but it’s true. At least, in the beginning, it’s like that until you get a few regular clients and customers and get your business financially stable.
One thing I would ask, Paul, is have you considered running your own business alongside your day job? It sounds like you hate it and can’t wait to hightail it out of there, but have you considered registering a company, taking on a few of these clients, and working their jobs in the evenings?
This could be a good way to test how serious they are about sticking with you, as you’ve indicated you believe they are, and also could give you a little taste of running your own business. There’s a lot more to it than just delivering the product or service, trust me, and hours can be eaten up by admin, finances, marketing, and other business necessities. I know this is playing it safe to some extent and isn’t exactly the romantic balls-to-the-wall notion of starting your empire, but it’s a sensible way to get a taste for the realities of business ownership.
I started my business out of necessity after the industry I was working in crashed a while back, but I would have loved the opportunity to do both for a while, first. In some ways being thrown in at the deep end is a huge advantage, but in others, I was extremely fortunate that I was living in Asia where it’s cheap and easy to survive. If I’d been living in Europe at the time, my savings would have been eaten up a lot faster and the pressure would have been on a lot sooner. I’m thankful things worked out for me, but I can’t overemphasize the need to have enough money over your head until the business is financially sustainable.
If running your business alongside your job isn’t an option, then I say go for it. You won’t regret it, and as Steve Jobs once famously said, “the biggest mistake you can make is believing you have something to lose”. We’re all dead men walking, Paul, and you could be in a box 6 feet under this time next year, so go for it while you have the chance.
There are a few things I advise you to think about before you pull the plug on your job. These are essential questions, and if you answer them before you start you will be ahead of most people who start a business for the first time.
Questions to Answer Before Starting a Business
Are you going to incorporate or run this business as a self-employed person? There are advantages and disadvantages to both, and I recommend you check them out in detail before you take action. Pay for professional advice if you have to. This little upfront investment could save you endless thousands down the road in reduced tax bills, liabilities, and other costs.
How much do you need to pay yourself in order to make rent and take care of the bills? How many jobs/deliveries do you need to make in order to meet that financial goal? There’s nothing more stressful than worrying about rent like Will Smith in the Pursuit of Happiness, and getting yourself into a jam can be hugely demotivating, contrary to popular belief. Work it out and remember – the numbers don’t lie. Assess your realistic options of making that in the first year, then act from there.
Are you going to be a solopreneur or are you going to hire people? I run my business as a one man show with the occasional help of temporary contractors. I have buddies who run fully fledged businesses with scores of employees, and I wouldn’t switch places with them if you paid me a million bucks. I’m all about freedom, hence my pen name, and working as a one man army allows me to take things in the direction I want, according to my vision. This might cost me financially, but I don’t care. Having excess material possessions was never the goal of my starting a business, and working as a lone wolf suits me perfectly.
Answer this question for yourself before starting a business and never lose sight of the answer. You will be faced with endless crossroads and decisions, and your reason for starting your business will guide you all the way. Are you doing this for freedom? Then be a solopreneur. Are you doing it to get filthy rich? Then you’re going to need to enlist the help of others along the way.
Who is your competition and what can you learn from them? I entered an extremely, and I mean EXTREMELY competitive industry last year and I got my ass handed to me for the first 6 months. I’m starting to make inroads now, but it was tough going to begin, because I totally underestimated my competition and, in many cases, didn’t even know they existed. That was an amateur mistake I won’t be making again anytime soon, and one you can avoid yourself by learning from my errors.
Find out who your competitors are, what they’re charging, what their business strategies are, how you can offer something they aren’t/can’t, how you can quickly differentiate yourself from them, and whether or not you will need to upgrade your skills/knowledge to beat them.
Business is a game. It’s one with serious consequences, but it’s a game nonetheless. The person with the best strategy wins, just like every other game. Be sure to think this out in advance.
Are you ready to lose it all to gain it all? This is probably the most important question of all because it’s only if you can answer ‘yes’ that you will make it. Business is fierce, and you have to be willing to go to the wire sometimes to beat your competition. You MIGHT fail, and you might end up burning through that $25,000 in savings and coming out the other side with nothing but a burned down wreck to show for it.
Are you prepared to take that risk? Are you fully committed, like a General who is ready to die in battle? If you can truly say yes, I honestly believe you will not fail in business, but if not, there’s a firm possibility that you will go broke somewhere along the line and break under the pressure of running your own show. It takes nerves of steel to make it, and whether or not you have them will determine your success.
That’s my two cents on starting your own business, Paul. You sound like a pretty determined guy and you sound like you’re ready to jack it all in and go your own way.
I wish you the best of luck in starting your own venture. Lots of people talk a good game, but few actually do it. Enjoy the journey. You won’t regret it, even if in a couple of years time you are standing there pissing on the burning wreckage of your first failed startup. It’s a fun ride and the skills you will learn along the way will be invaluable going forward.
Until next time,
Desire. Decide. Persist.