As a financial advisor who launched his own business, I have a strong interest in entrepreneurship. Contrary to what you might think, no huge life-changing leap is required to start your own business. I still kept my ‘day job’ while doing what I’m really passionate about during the other waking hours of my life. In this post, I’ll discuss why you might want to work for yourself, the typical barriers that keep people from doing this, and how to discover what you can make money at.
As a physics student in college, I had a kindly old professor that would start every lecture with what he called, in a funny Russian accent, ‘moh-teee-vaaaayyy-shun’, or why what we were about to learn was going to be valuable to us. To me, the two key reasons for starting your own business are 1) freedom to do what you want, when/how/where you want and 2) money.
The first reason, freedom, is multi-faceted. If you work for yourself, you get to set your own hours, write your own job description, pick your office space, and work in a way that makes the most sense to you. The second reason, money, means that a side job can allow you to do things financially (retire sooner, pay off debt, plate yourself in gold) that you might not have been able to do otherwise. Your own business can even eventually replace or surpass your current income, if that’s your goal. Some schlub toiling away at a box factory isn’t likely to get rich, but many (though few per capita) hardworking entrepreneurs have.
Overcoming barriers to starting your own business
Many reasons, also known as ‘excuses’, are cited as making entrepreneurship difficult. Some are valid, but others are just rationalized laziness (mental and physical.) Because it’s fun to blame people, let’s start with the nonsense:
“I don’t have enough time to start a side business!”
I have a general premise that if you really want to do something, you can make time for it, regardless of how ‘busy’ you are. The trick to good time management is to eliminate activities to make room for more important ones, and to focus on getting one important thing done at a time. There are a number of good books and blogs on ‘personal productivity’. One book that I highly recommend everybody read (not just the entrepreneurs) is ‘The Power of Less‘ by Leo Babauta (he also has a blog.) Tim Ferris also has some great posts on controlling your time and getting important things done. His book, ‘The Four Hour Workweek‘, is already a classic treatise on how to live an accomplished life (however you define it.)
Let’s say you spend 50 hours per week at your full-time job (including lunch.) Let’s also assume it takes you 45 minutes to commute each way, 5 days a week. That’s 7.5 hours per week + 50 = 57.5 hrs for work. Add in 8 hours of sleep per night (56/week), and that brings the total to 113.5.
There are 168 hours in a week, leaving you with 54.5 hours to do what you please. Of these, maybe 3/day go to personal stuff like eating, bathing and getting ready for the day. That leaves 33.5 hours. Spending 2 hours per day with family & friends leaves 19.5 hours. Even if you give yourself an hour of free time each day to read, watch TV, surf the internet, etc, that leaves you 12.5 hours.
So, even if you work more than 40 hours, have a long commute, spend lots of time with family & friends, sleep a full 8 hours, take time for meals, and sit on the couch an hour each night, you have at least 12.5 hours per week to spare, and nearly 20 if you cut out free time spent alone (be honest; you’re getting some of that web-surfing time in at work anyways.)
This is more than enough time to get a part-time freelance project going. I started my business while working full-time and pursuing a graduate degree in business in the evenings. Did I do this by cutting contact with family & friends while simultaneously stressing myself out? No! I still saw family & friends for a few hours at least once per week, got plenty of sleep, read, cooked, and got all my homework done. I even took an awesome 11 day trip to the Czech Republic while on break from my MBA classes.
I DID make a conscious effort to set and complete small (written) goals each day that would get me closer to where I wanted to be. These might have been designing a page of my website, filing my sole proprietorship business license online, or contacting & meeting with potential clients.
What I DID NOT do is just as important: I didn’t spend much free time browsing the internet (when I was on the internet, it was to get something specific done), watching TV, playing video games or just lounging around. I stopped going to the monthly meetings of an organization I had joined (and let everybody in the group know that I had to be firm on that.) In a nutshell, I prioritized getting important things done at the expense of letting small things slip (I use this strategy at my ‘day job’ too; see the above-linked Tim Ferris articles for more on this idea.)
Even though I made sure to see friends & family, especially on weekend nights, I hung out with them less than I would if I had all the time in the world. If you have something important you need to finish, you have to learn to say ‘no’ to requests for your time.
“I don’t have any money”
While it’s true that certain types of businesses require large upfront capital expenditures (like manufacturing), many can be started with no more than a phone, computer and some office supplies. I have a friend who started a bakery in Seattle without investing much upfront by renting kitchen space by the hour (including the expensive equipment) and selling wholesale. If, like me and many other people, you’re going to supply a service, you really don’t need much to get started. If you do need cash, finance your venture out of your (non-retirement) savings or income, hit up relatives or friends for loans, or start saving a bit each month to get what you need. Avoid buying anything you don’t absolutely need for the business.
Focus instead on generating cash from customers. Ramit Sethi, my favorite personal finance blogger, recommends getting paid by at least 3 customers (1 could be a fluke) as a sign that your venture is viable. Start marketing your services to friends, family, co-workers and the acquaintances of these folks, build a simple website, and stay focused on taking action towards your goals.
“But I don’t know what to do?”
After setting aside time and money (or lack thereof), many would-be entrepreneurs are stymied by not knowing what services or products to offer. Sethi has posted a great video about this discovery process. In general, you want to come up with a business venture that combines three things: 1) Interest – what you’re passionate about, 2) Skill – what you’re good at (you don’t have to be an expert), 3) Marketability – what people will actually pay for.
Digest Ramit’s video and start setting your entrepreneurial goals today: ‘How to figure out what to do’ video
Here’s another video from Ramit on entrepreneurial goal-setting.