If you want to start a business and survive financially and emotionally, you?d better have a plan. You can assume your business won?t make much money at the start. You should be extremely conservative in estimating revenue. If you think you?ll start making money in six months, assume it will be a year. If you think expenses will be X, assume they will be 2x. That?s just the way a new business works.
Here are a few things to consider:
- If you are married or have a significant other, does that other person support this decision?
- Does your partner make enough to pay your bills and keep you afloat? Is that enough to keep you going indefinitely? If not, how long?
- What do your savings look like? Can you rely on them if things don?t go so well? Are you and your partner willing to go through what it takes?
- Can you cut back on expenses? Can you move in with parents, relatives or friends? Is working from home an option to reduce expenses?
You can?t run your life and your business on leprechauns and unicorns. You need a realistic plan. The statistics are against you. They say that half of all businesses fail in the first few years. Look up the latest stats. They will sober you up fast.
If you are in a relationship, I highly recommend you take inventory of you and your mate?s emotional perspective on this plan of yours. I?ve worked with job hunters and people starting businesses. What I have seen in any good partnership is that you have an optimist and a pessimist. You have a realist and an idealist. You have someone who needs more emotional and financial security than the other one. These differences are good so your plan is reviewed from both perspectives. My advice is to be real. Just because you?re cool with this new adventure of yours, doesn?t mean your mate will see things the same way.
I started my business in February 2011. It was a side job I started while I was employed. Initially, all I wanted was extra income. Three years later, I was making as much money ?on the side? as I was with my ?day job.? Then in December 2013, my employer let me go.
Now let me run you through my scenario. I was the primary breadwinner. I had come through several job losses in the previous 10 years and we had a good amount of debt. We had two kids in college and the expenses that go with that.
With my main and side job, I was doing well. But with only one of the two, I wasn?t.
Losing my job put me at a crossroad. Did I go and look for another job to give me more time to grow my side business? Did I suck it up and go for it?