By Jeff Haden
Starting a business that lasts is a lot harder, even when you pour significant time and money into the venture. And a lot riskier: The more time and money you invest, the more you put at risk.
So how do you live your entrepreneurial dream and minimize risks and maximize your chances of success?
Start your business and keep your full-time job. Except in rare cases, keeping a full-time job while you build a business is the best way. Of course it’s not easy: Sacrifice, discipline, and a lot of hard work will be necessary. But that’s okay – if you aren’t willing to sacrifice and work hard, your business will fail whether you keep your full-time job or not.
To minimize risk and build a solid foundation for small business success:
Live like a college student. It’s almost impossible not to spend money before you make money; some small businesses take months and years to turn a profit. Don’t assume your savings will see you through. Eliminate every drop of personal spending that isn’t necessary. A huge percentage of startups fail because they run out of money, and even if you don’t, chronic money problems can lead to poor long-term decisions. Before you start the business, cut all personal expenses to the bone.
Be a superstar at your current job. Losing your job is the last thing you can afford, so be a superstar. Work as hard and efficiently as possible. Get more done than anyone around you so you can leave on time without regret (and without raising concerns with your boss.) Money is in short supply in a startup and so is time. Never waste time – you can’t afford to. Work really hard at work so your evening and weekend time is yours, not your employer’s.
Create a killer schedule. When your “normal” work day ends, your startup workday begins. Decide how many hours you think you can spend on your startup every evening, and add 25%. Then commit to that schedule. Write out a schedule: If your schedule says you will work from 6 p.m. to 10 p.m. every evening and from 7 a.m. to 4 p.m. on weekends, work those hours. See the schedule you create for your startup the same way you see your schedule for your current job – it’s non-negotiable.
Overcome urges to complain about your killer schedule. Say you start a web design business; once you have a few clients you’ll be working every night and most weekends. That will be hard, but that’s a good thing: Landing clients means you’re generating revenue. Or you may have to get up early every day to take care of emails and voice mails before you head off to work. In large part, your clients will choose your work hours for you. Just keep reminding yourself that having demanding clients is actually great, because that means you have clients. Resist the temptation to complain or feel sorry for yourself, because that will make you quit your day job long before you should.
Be a profit hoarder. At first you’ll be tempted to spend your profits. That’s natural. Don’t. Reinvest every penny. Use the profits you earn to set up the business infrastructure you need. Buy needed supplies. Buy equipment you’ve been renting. Advertise so you can grow your client list. Or save cash to tide you through the inevitable downswings in revenue. Don’t think of profits as income; think of profits as a tool that further establishes your business.
Keep your current job longer than you think you should. Deciding when to quit your job and go into business full-time is the hardest decision you will make. It’s impossible to make an objective decision when you’re tired, stressed, and sick of your full-time job… in short, when you want your life back. Don’t quit too soon. Focus on numbers, not emotions. Your financials – personal and business – will let you know when it’s time to quit your day job.