One of the things I hear often is "I want out of my J-O-B, but I don't know how"! Having started several companies by raising money from investors over the years, you might be surprised how many friends and/or family members who have money would love to participate in some great idea you have come up with. One of the first things you need is a business plan. There are all kinds of programs out there to help you write a business plan. Plus, you can go to your local chamber and ask them who to go to for help in putting together a business plan. Also, local business colleges are usually happy to help or give you guidance. You might even get an accounting or finance student working on their MBA to do it for you for free as a school research project...just a thought. Several of the businesses I have started over the years has been done with OPM (other people's money). But, you have to come up with something worthy of their investment. It's a place to start.
Another thought about your current job, is that you can look at it as funding or working capital you would need for your business while you build it on the side at nights and on weekends. Face it, if you had a business you were putting full time effort into, it would have to generate enough income right out of the gate to pay for your family's basic needs...food, clothing, and shelter. Without having an angel investor or some other kind of investor funding, that would be very difficult. A J-O-B is a great temporary vehicle for doing that.
Also, if possible you should be scraping together every penny you can so you can come up with at least 6 to 12 months of living expenses. That way you can start your business without the worries of meeting basic family needs. This will take great discipline...believe me, but it is very doable! How big is your dream? How much do you want control over your life? How much do you hate working a J-O-B?
Hope these thoughts are helpful! Anyone else have any ideas along this line?
Great words, Guy!
I especially appreciate what you said about using a J-O-B as working capital. I started Live It Forward LLC on the side and worked at it for 3 years (15-20 hours a week) while I had a full-time job, so my job at the time was definitely working capital for me. In fact, while I enjoyed my job, I appreciated it even more as I built my business. I felt blessed to have the opportunity and ability to serve my employer well and to know that this job was "stretching out my runway" to launch my business.
Kent - it's great to hear you say that it took 3 years to get your dream going. I also appreciate the advice, Guy, on having 6-12 months of living expenses saved up. We just paid off our mortgage & all other debt so I should accelerate this saving over the next 12 months. I'm also (finally) putting all these thoughts in my head down on paper to develop my business plan, so I feel like it's finally going to come together for me.
Keep up the great advice! Thank you!
So glad to encourage you today!
Sound advice Guy. I have recently completed a program with Penn State University to help move my product along. For a reasonable investment, I received the help of senior Engineering students AND a wonderful group of Business Finance students. The students were very enthusiastic and were a joy to work with. Upon the conclusion of the semester-long program, I ended up with some product improvements and a business plan.
The program has been developed by the Penn State Engineering Department, in State College, PA. The title of the program is "The Learning Factory." The core of the program is to help expose Senior Engineering students of all disciplines (Industrial Engineers, Electrical Engineers, Computer Science Engineers, etc.), to real-world work scenarios. Their final grade is determined, in part, by their performance throughout the semester.
The University asks that you, as a sponsor, interact with the students and hold them accountable for specific deliverables. I had a team of 3 Industrial Engineers and 5 Business Finance students. To say the least, I had my hands full. But, best of all, I learned a tremendous amount from working with the students and faculty members. The director of "The Learning Factory" program, at Penn State Main Campus, is Timothy Simpson. The professor in charge of the Finance students was Greg Pierce. It was a true joy to work with both faculty members.
Another great resource for starting your own business is the Service Corp of Retired Executives, or SCORE. SCORE is a non-profit organization that will help you with any aspect of your business development. These executives will be able to give you valuable advice regarding the business development process, as well as, common pitfalls to avoid throughout the business building process. Here is their web site: http://www.score.org
Regardless of the assistance that you choose, there is still a whole lot of YOU in the equation. You are the one with the dreams. You are the one who wants out of that J-O-B. You are the one who supplies the motive force behind your idea, product, or service. So . . . if you head down the road of owning your own business, make sure you do a "Check-up from the Neck-up." Make sure that you have the passion, persistence, desire, and motivation to see your dreams become reality. Separate yourself from those people who are not willing to share in your vision, as they will become the anchor that drags you to the bottom. Seek out like minded individuals, or groups, who are positive, upbeat, and most importantly, can offer some credible advice to help you achieve your goals. You will find countless individuals willing to offer their "two cents" about your business when they have no foundation to base their opinion. Steer clear! Their advice becomes clutter and confusion.
I would like to start another thread for seeking out angel investors. How does that sound?
Hey Doug, WOW...if you are making the same income in your business as your J-O-B (and I mean the stuff you need to provide for your family plus some for your business), then it's probably time to make the jump. However, are you living out of your job AND your side business to make ends meet? Or is the money you make on the side, money you don't live on? It matters in taking the plunge into self-employment.
If the money you are making on the side is equal to your JOB AND you are NOT living on it, then the decision to take the step of faith is in your hands. The Jordan River didn't part for Joshua until he put his foot in the water. Personally I'd be out of that JOB so fast my head would spin! Again, that is IF my side business was providing what my job provided and I was NOT living out of it too.
If having a safety net is something you feel you need, then you should be saving every penney you can from your side business in order to stash away some extra money in case you hit a slow month or two in your business. Ultimately, it may just come down to the fact that you may need to overcome the fear of losing the steady income from your job and TRUST in yourself and your dream. Is your dream BIG enough to motivate you to work hard every day to make it work...knowing that "if it is to be, it's up to me"? Only you can answer that question!
Between the idea of getting outside investors and on funding it with my own actual J.O.B., I would almost always opt for funding with my own efforts. Not that investors are bad, but with using O.P.M. some control is given up in many cases. If the business doesn't ramp up fast enough, you have your own frustration to deal with in addition to other people looking for some type of return. It may not be as bad with family/friend money, but it has the potential to strain your relationship depending on the investment value.
I'm building Reflective Bible Study, Strengthen My Spiritual Life, (and in a year or two adding Rebuilding Your Church) all with my own J.O.B. efforts. The absolute beauty about today's economy is that the entry barriers are almost non-existent except for the barriers in our own heads. Building the business with your side time and with your own money can help save you (and me) from making mistakes. The plan that I was initially using with Reflective Bible Study has been sidelined because it wasn't a great idea. Had I had extra money on the front end to build faster, I might have shipwrecked with a bad idea. Money is a great amplifier of successes and failures. It hurts less if it doesn't have repayment obligations that carry on well past a bad idea. I am already working on the next big idea of where to take the website and studies. Having only invested time and minimal amounts of my own money, I can move from idea to idea until one sticks and works.
On saving 6-12 months of expenses, I would say absolutely, but never make the leap until you are making a little bit of money and can see how having more time would be able to ramp up your business income. It only costs time to make most information products, and this can be done easily without cutting J.O.B. ties. Information products can be sold with automation, so most products that can create reciprocal/passive income can be automated and one could easily build a lucrative side business with no reason to leave their J.O.B. if they enjoyed both. This is the path I am taking. Build products that compliment each other, test them with small groups of people, get feedback and make adjustments, then launch them. Stats show that it takes about 18-24 months to ramp up most business to replacing income, and while 12 months of expenses might help ease the transition, it would definitely be less time if one is already making a percentage of their income and covering any business expenses before making the leap. (Before jumping, be sure to calculate insurance that may be covered through work that you will need to replace that might eat into your savings.)
Some ventures one could pursue might look like they are building their own J.O.B., and I would recommend against this type of side business, because they usually take way more money and time, and there is more temptation to get investors or take out debt to start them up--which adds more risk to an already riskier venture.
Great ideas, and an awesome starting point for many people. Keep it up!
Hey Cam -
Sorry for the slow response...just got home from a great vacation with my family in Colorado. Hard to come home! Temps there, mid seventies. Temps here in Okla, 105+!
You have shared some incredible wisdom in your comments and I hope that everyone had the opportunity to read them. You are absolutely right about the control thing when you use OPM. It is a decision each person has to make individually. Some people are wired for the added risk and/or stress that comes from using OPM and other people thrive on it. I'm torn on this because I have built businesses with and without OPM and have seen good and bad from both. A person absolutely needs to know how they are wired before they take someone else's money.
"Money is a great amplifier of successes and failures". You nailed that one. It does hurt less when you don't have the repayment obligations...for sure. However, without adequate funding, many businesses never get off the ground. The reason there is so much fun in being self-employed is the thrill that comes from the risk...NOT gambling, but risk. The greater the risk, the greater the reward and of course, the greater the risk, the greater the potential to lose your shirt! Isn't business fun? That's what makes this wonderful capitalistic society so great to live in! We actually have the right to fail and fail big! But we also might just succeed.
Other things regarding funding depend on what kind of business you are choosing to have. Many businesses can be done as a "solo"preneur in which case there are no employees. In that case, the startup cost can really be cheap. Or you may choose to go into a business that requires an entire staff of employees, in which case you need a whole lot of upfront money to get the business launched. Again, that's where OPM comes in unless you have enough of your own to launch it yourself...most people don't.
Regarding your thoughts about working a business on the side that compliments or adds to what you are doing in your job is brilliant. You are so right! People don't have to quit their job ever if they don't want. They may simply need some extra money for paying off debt, or taking a family vacation, or buying an investment property that provides "unearned" income, or whatever you can think of. That way you can have your cake and eat it too! Or you can be what's called an "intrapreneur"...kinding of like being an entrepreneur, but doing it on your employer's nickle! Depending on the kinds of freedom your job provides, that can be the best of both worlds! One REALLY tough thing about having a job AND having a business on the side is that your interests are split and you may find yourself spending an inordinate amount of time working and not enough time with your spouse and/or childrent. There is always a tension involved in this and it requires a great deal of management and intentionality to not let yourself get out of balance.
Wow, this could go on and on! Thanks for letting me ramble. Really glad you are a part of the group! You will be an amazing contributor Cam...thanks!
The "UN" Guy