Am I Making a Big Mistake?

Question


Morning Scott,

When reading the section of your book where you talk about starting a business, I remember thinking, “I can’t see that happening to me”. What would make me leave my secure, well-paying job ($100,000 plus)? Well, an opportunity has presented itself. I have been offered a contract by my current company (construction) that is open ended — if I am happy to do it, they will pass on client work. I figure it will cost about $80,000 to set up the business, and I can earn $150,000 p.a. plus. I am 75% convinced this is the right thing, but my wife is not — her parents lost everything in a failed retail business. I see this as a potentially life-changing decision for our young family … but only if I get it right. Any help would be appreciated.

Jim

Scott's Answer


Hi Jim,

My first question is this: would you be running a genuine business, or is your boss just parlaying some of his risk?
There are rules against ‘sham contracting’ which you should look into — make sure it’s a genuine opportunity for you … and not your boss!

Now, your wife is right to be wary: right now you’re earning $100k plus.

And in this case the plus really is a plus. As an employee, your boss shells out for your superannuation, you get four weeks paid holidays, and you get paid time off for sick leave, carer’s leave, long-service leave, and public holidays. And unless you go loco and bring a gun to work and start waving it around, it’s actually quite difficult for your boss to sack you.

Best of all?

When you get home, you can kick the footy with your kids and not have to think about work or where your next pay cheque is coming from.

However, if you start your own business, you’ll have, as Jay-Z says, 99 problems: you get to spend your nights doing bookwork, stressing about where you’ll find new, profitable customers, and possibly dealing with employees and paying their entitlements. Oh, and your worried wife will be riding you harder than your current boss.

Bottom line?

If I were in your shoes, to go it alone I’d want to be earning (eventually) AT LEAST double what you’re currently earning as an employee, especially if you’ve got to stump up $80,000 of your own dough, bro!

Scott