Many times, you will hear people say “you need to start a business! You need to make some money and not simply live a 9-5 lifestyle! You will make $10,000 a month or $1,000 a day starting right now!” It sounds tempting and unfortunately many people are roped into these offers because of numerous reasons, one of them being that many people do not make enough money!
Now I do advocate that people start their own business, even if they have a job! However, there is a right way and wrong way to start and run a successful business! If you do not know the right and wrong ways of starting a business, you will needlessly hurt yourself in your own economic success! If you are a first time aspiring entrepreneur or you have ran a business before, but failed, you will need to read this list and apply this information, so let’s begin!
DO NOT GET LOANS TO START YOUR BUSINESS
There was a person, named John Dough, whose last name was spelled the way you would write dough in bread dough, that had started their consulting business on a loan! John had a college degree with no college debt, paid off car, and lived in Manhattan paying $5,000 rent, while making $130,000 net income a year as an industrial engineer! John figured from reading a lot of personal finance books and business books, he could start a company selling financial services and products and increase his income! So he proceeds to apply for loans to get some startup capital!
John Dough obtains one of the loans he applied for and purchase office space. This loan by the way was $100,000! In order to recoup the costs, John figured from his business plan that he would sell to clients, grow a customer base, eventually sell packages to his clients and have his clients refer him to other friends, family, and associates to the consulting company!
Sounds good on paper, but…
Now Of course, all of this sounds good on paper, but it didn’t exactly go as plan! Since John had acquired the loan of $100,000, he now had to service that debt and that debt and weighed into every decision he had when doing his day to day operations! He would try to skip lunch and try to be cheap with the cloths and leisure activities he would engage in such as shopping across town to the local Walmart vs going to his favorite downtown clothing store or skipping his messages to simply just napping!
To make matters worse, he couldn’t sell to his clientele because he did not have one! He was an industrial engineer pivoting to a new industry to make a living instead of making money in his own industry! Even though he lived in Manhattan next to big financial conglomerates, he didn’t understand that his offer paled into comparison to not only big financial businesses, but also people who came from those financial institutions to start their own business!
The financial experts who came away from those institutions have already built relationships with their customers and have already established themselves as experts in their field, which as John merely entered that field for the sake of only making more money! For the next couple of months, John would try to sell his offer either physically to people or digitally over the internet which would result in unsatisfactory results! Although John was an industrial engineer, he was terrible at sales and could not comprehend why he couldn’t get people to purchase his products! As we know, John read many financial literacy books, but he did not read many sales books so was definitely lacking in trying to have a successful business!
If these were the only problems…
If these were the only problems John had, this would have been manageable and solvable, but don’t forget he also purchased office space!!!
He was able to get a good deal getting office space for about $4,000 a month, but the lease would be 5 years, so no matter what, he was still on the hook to pay that $4,000 a month lease! In the beginning, John was happy to get such a deal and since he the income, he could service that lease! But now, seeing as though he had to pay his own personal rent, office space lease, and see the results of his business not go anywhere, he would eventually close up shop 10 months later, even though he was still on the hook to pay that business lease!
Most of the problems that occurred could have been squashed if John did not start his business with a loan! Although he did not have the sales skills, clientele, or the experience in financial consulting, he could have started his business and slowly raised his income instead of having various liabilities attached to his business! He acquired the loan, which lead him to acquire office space that he had to pay for 5 years, depleted his cash reserves to experiment various strategies, and decreased his own personal pleasures in his life! Getting a business loan to start a business even though you have the income does not benefit you in the long term! A loan is a haphazard use of capital for anyone who is starting new! For people who are starting new, they should instead rely on their own income and figure out!
DO NOT QUIT YOUR JOB
I cannot stress this enough! If you already have a job and you are trying to start a business, do not quit your job and start your business! Let me tell you what is going to happen if you proceed to do this! First, lets look at all the advantages your job provides you
-Your job gives you an expected paycheck!
-Your Job provides tasks!
-You only have one job!
-Your job is scheduled with defined hours, meaning you have a rigid time frame to work in!
Now that you know all the advantages of having a job, just imagine all of those advantages disappearing overnight! This is a problem you will have!
What You Cannot Do…
You cannot invest much in your new business because the one job that provided you capital no longer exists! You have to start a business, not with constant funds, but dwindling funds, which means you can eventually lose out on your living situation as well as your business! Also, when you start a business, you do not have a superior giving you tasks to have done! You are the new superior in your organization and it is up to you to not only create tasks, but also make sure that those tasks are done on a timely matter! In addition, You won’t have only 1 job! You will have the job of the salesperson, marketer, manager, etc. when you are your own business person!
Finally, you will not have “scheduled” hours like you would have in a job! When you are a business owner, your business is your life! There is no work-life balance! You may need to wake up at 5 am and be in bed by 9 pm for you to have success in your business! This does not mean you should have your hours available at all times so that anyone can reach you or you should sleep 4-6 hours a night and feel well rested! It simply means that every activity you engage in, you need to fit that activity inside your business success!
What You Will Need…
Your business success will require a lot of hardship and one of those hardships you will need to overcome is starting that business while you have a job! Many people may think that is counterintuitive to do both a business and have a job, but what this will teach you is how to manage time as well as prioritize what is important in your day-to-day life!
When you have a job, while starting your own business, you can use the income from your job to invest in your business to test some ideas you may have! For example, I work at 9-5 job at a public institution and every 2 weeks I invest $500 dollars into my business for materials and also marketing because I believe by doing so, in 3 months I would be getting a profit of $,5000! If this does work, great! If it doesn’t work, not so great, but it is still great because you learned why that idea did not work!
WHEN…
When starting your business as well, you start to take the tasks and standards you have done from your job and try to incorporate them into your new business! For examples, a person who makes food can take the procedure for making food and utilize that same procedure in creating tasks and procedures for their new business! If those new tasks and procedures work, it is great, but if it doesn’t, not so great, but remember, you learned how an idea did not work and you could do better with another idea!
It is going to be difficult to maybe understand, but you should consider your business as a second job, in which you have full control and your assignment is to have it profitable enough so you can your job and make a living from it!
If you really want to make sure your business becomes profitable enough, you are going to have to designate plenty of hours for it to be profitable! Putting in your hours is what is going to make your business have success or not and it will be imperative that you set a schedule in which you set a time frame on when to work on your business or not! You can work an hour a day or you can work 3 hours every other day! These merely suggestions, but the choice is yours at the end of the day!
If you wish to be successful in your business venture you most likely are going to have to follow these principles!
DO NOT USE YOUR SAVINGS!
I know you may have heard some rags to riches story about an individual using all of their life savings on their business and hitting it big! It sounds aspiring, inspirational, and whatever well intended term you can think of for that event! The truth of the matter is that most people crash who use all their savings on their business and would at worst become destitute and in poverty! Your savings are just that, SAVINGS!
Your savings do not exist as investments, they exist as cushion for you in you happen to fall into any emergency! If you use your savings for your business and that is all you have, then you will start to cloud your thinking in making better business decisions and start to force ideas into working which would be detrimental to your venture! You will essentially be living on the edge all the time with the idea that if your business fails, you will lose out drastically and never recover!
What you must do instead…
What you must do instead is focus sales! You are probably thinking what? Yes, Focus on sales! If you have a job, the reason you have a job is because you sold yourself on your skills to an employer! Once employed, you were able to continue selling your skills and you would then get a check and then save! See, what you need to understand is that similar to business, you must also sell yourself and you need to learn how to adequately raise funds without dipping into your savings! A penny saved is not necessarily a penny earned, it is simply a penny saved! As I mentioned earlier, your savings only exist for emergency financial events! Outside of those financial emergency events you would need to use your own cash reserves to fund your own business!
I have heard numerous stories about people who used all their savings and eventually went bust because their business did not perform!
DO NOT HAVE THE MINDSET THAT “YOU WON’T WORK FOR OTHER PEOPLE!”
“I want to start a business because I don’t want to work for or serve other people!” “I don’t want to pay for someone else’s mortgage!” “I don’t have to serve a boss because I am THE BOSS!” If you believe in any of these stated quotes I have some sad news for you… You are going to have to do all of those things and then some! Let me explain!
You will many of times come into reading an article or publication about an individual having success in their business and getting that inspiration from not having to work for other people! It could be a former service worker, engineer, day laborer, or even a medical doctor who would transition from their job and into business saying those things! It is aspiring, but the fact of the matter is that rather you have a job or a business, you will be serving different people but for different reasons!
Know This…
When you have a job, you are serving the institution that employs your skills and services such as a public or private institution! If you are employed by these institutions, you will serve people on behalf of being paid as defined in an employee contract! when you start a business and you are a business owner, you serve the market place and you are paid directly via numerous people and entities as defined by contracts you have negotiated!
As a business owner, you do not have one lever in making money, which is simply a job, you have many levers of making money such as sales, subscriptions, products, reviews, tutoring, consulting, you name it! You can even combine some ways of making income for your business to have a multiplier affect to make more income beyond your wildest dreams! Speaking of dreams, this gets me to my next point!
I Don’t Want To Pay For Someone Else’s Mortgage
Many people have a dream of owning their own house someday! I don’t mean buying a house with a mortgage, but I mean buying the house straight cash and actually owning the house! What people need to do is get a job and make a lot of money and do just that! That is what is mostly taught in personal finance and money management, right? Well, the truth of the matter is that the business that these people are employed at is helping them pay their mortgage! You may be asking at this point, what does this have to with me renting out an apartment or a house?
The point I am trying to convey is that every time you engage in trade and commerce, you are paying for someone’s mortgage! When you go to the grocery store, you are paying the mortgage or helping the owner of the store pay off their mortgage! Whenever you feel like going to an entertainment venue rather it be a musical festival, sports competition, or bar you are helping someone pay their mortgage! When you have a job, your livelihood depends on the institution acquiring funds! If your institution doesn’t get the necessary funding, then either you get a decrease in wages or you get fired sometime later!
If you are a business owner, you make a living from other people’s money and you have success by providing goods and services to exchange for currency! Everyone is one way or another paying for someone’s living and you need to understand that in order to have success in your business venture!
I Don’t Have To Serve A Boss Because I Am The Boss
“I don’t have to serve a boss because I am THE BOSS!” This statement is only half true! You are indeed your own boss when you start and run your own business, but you do have to serve not a boss, but a CLIENTELE! You may ask “What is a clientele?” A clientele is a group of people or individuals you serve goods and services! If you have a landscaping business, then your clientele would be your neighbors or other people in your neighborhood! Your clientele is a collective that you curate and grow in order to have a profitable business!
Unlike a job where your clientele is given to you by your superiors, you will be responsible for the sales, marketing, and operations in dealing with said clientele! If you do not put together a worthwhile clientele then your business will not grow or go out of business! Your clientele is essentially going to be your network and audience to help you better your business and to better help them! You will have clientele that will leave when you grow your business, but you may get even more people to join and patronize your services! Your clientele will be responsible for bring you up as well as bringing you down, so it is imperative that you can cultivate this network to have a successful business!
DO NOT HAVE THE IDEA THAT YOU WILL BE WORKING LESS
There are many marketers out there that are trying to sell you on the idea that you can work less than 40, 30, 20, or even 10 hours a week and make hundreds of thousands of dollars! Truth be told, you can do that… only after you worked 80, 90, or 100 hours a week for years on end to establish the structure necessary to do that! When you start a new business, you don’t know what you don’t know! You will work a long duration of hours because you are going to have to put in a lot of activity to get your business going and learn from your mistakes!
You will constantly have success and failure when you run your business and you will eventually be in business for so long that you will habitually enact operations to grow your income without even thinking! For example, lets take a consulting business! You need clients to pay you! What do you need to do? You need to do sales, marketing, networking, communication etc. Not only do you have to do those things, you need to know what, how, where, when, who, why to do those things and set up operations on why you had success or failed in your actions in doing those exact things for starting your own business!
This Is Why…
You need to do many hours when starting a business! It is not so much about being smart, but more so about being persistent! You can understand something from a conceptual stand point, but it is more important to be persistent to apply an idea than simply understanding that idea! All of this takes time and if you do not put in enough work into your business, it can very well be the case, your business will not take off!
Hope you enjoyed! Leave a Comment and message me if you have any questions!