Have you ever thought about flipping your boss the bird, and doing your own thing?
I’m sure you have.
A survey released last week by the NAB found that one in three Aussies want to be their own boss.
The urge to bird is even stronger for young people — one in two want to run their own show.
So let’s get one thing clear: owning your own business is the most reliable way to get seriously rich.
Yet it’s not all sunshine and cupcakes.
Like you, I’ve read the motivational stories of entrepreneurs who say relatable things like “I’m just a normal girl who sort of just stumbled onto this million-dollar business”.
Unlike you, I get to meet many of these entrepreneurs. Most of them are a little cray-cray. They are not normal. The people who make it to the top of their field in business are, in most cases, total workaholics, completely ruthless, and quite often a little unhinged.
(Guilty, as charged.)
It makes sense. After all, we’re talking about people who are willing to throw in a dependable wage, with entitlements like sick leave, holiday pay, superannuation and normal work hours, to back themselves against against better funded, more experienced competitors.
Okay, maybe you’re not setting out to be the next Richard Branson, but regardless, it’s a huge life-changing decision. So here are six questions to ask yourself before you flip the bird:
Question 1: Have you spent 20 hours a week on your start-up, while holding down your full-time job?
That’s the first question I ask people who tell me they want to quit their job to start their own business.
You’ll clock up 60 hours a week in a start-up … and that’s in a slow week. If you’re not already devoting 20 hours a week to your start-up, there’s a good chance what you’re really doing is running away from a job you don’t like.
You can do both for at least 12 months. If you can’t, you’re probably not cut out for business.
I call this the ‘Trapeze Strategy’: don’t let go of the bar (your secure paycheque) until you’re safely holding the next one (your successful business).
If you start your business off part time, you may work out that full-time business in not for you — but what you’ve got is a great part-time gig that can turbocharge your mortgage or build a huge investment portfolio. What’s so bad about that?
Question 2: Where are your customers?
That’s the second question I ask people.
Most of the time they come back with the three F’s: ‘friends’, ‘family’ or ‘Facebook’ (as in, ‘my friend says they’ll be my first client’ or ‘I’ll spread the word on Facebook’).
That’s not a strategy, it’s a plan for the weekend.
You need to know how much your best competitor has to lay out to attract a customer, and then work out how much profit they make on each sale.
The bottom line is that it’s not enough to be a good programmer or a good jewellery-maker — you have to enjoy making sales and must be prepared to devote at least 50 percent of your time to doing it.
Question 3: Are you planning on getting into bed with anyone?
That’s the third question I ask, and there’s only one correct answer.
The answer is ‘no’.
I can count on one hand the truly successful business partnerships that have lasted decades, while the vast majority end bitterly. It’s like a marriage, only with money and no sex.
If there’s someone you want to get into business with, by all means sit down and create a sweetheart deal commission structure for them, but you want to own 100 percent of a business or zero. Trust me on this.
Question 4: Are you ploughing your life savings into the business?
Again, there’s only one correct answer.
Again, that answer is ‘no’.
(I’m not classifying a franchise as a business — in most cases you’re basically buying yourself a 100-hour a week job. The real business is in selling the franchises, and it can be very, very lucrative.)
Small businesses are risky, and most of them fail.
Yet the good news is that you don’t have to stump up large sums. Case in point: half the small businesses from the NAB survey were started with less than $5,000.
Question 5: Does your family support you?
This question trumps the lot of them, because it will have a huge impact on those you love.
When I first met my wife (who, unlike me, wasn’t brought up in a small business family), I explained that owning a business is a lot like having a kid. The first year is like a bombshell — you suffer sleep deprivation and total exhaustion. It gets a little more manageable over the first five years, but it’s still a slog. And, just like a parent, you’re never totally free from worry.
That being said, it’s the best thing I’ve ever done and, family aside, it’s my proudest accomplishment. I can work from anywhere in the world, see my kids grow up, and be 100 percent in charge of my time, and my income.
So if you’re thinking about starting a business, look at it this way:
The easiest way to make money quickly — as in next week — is to freelance. Even better, freelancing cuts through the bulldust and allows you to road-test your ideas, your pricing strategy and your skills … all without leaving the security of your day job.
In other words, start swinging on the trapeze!
Tread Your Own Path!