It’s time to make a change. Maybe your dream job turned into hell with a paycheck. Or, possibly you never really had a dream job; it was always about trading freedom for a salary. Whatever your reason is, you are ready to transition from employee to entrepreneur.
Don’t hesitate. Millions have done it before you. And if you learn what worked for others, there is a better chance that it will work for you too.
Employee to Entrepreneur, The Easy Way
There are millions of new small businesses created every year. According to the Kauffman Index of entrepreneurial activity, there were 476,000 new businesses created each month in 2013. Historically, only a small percentage of businesses will succeed. To improve your odds, I enlisted the help of Nick Loper, founder of Side Hustle Nation, to share a few pointers.
This helpful startup advice will make the transition from employee to entrepreneur less scary and more productive.
Love it or leave it.
One of the most important factors that will determine whether your business will succeed or fail has to do with one simple fact. Do you enjoy it? Loper suggests: “Try a bunch of stuff and see what works and what you enjoy. If you hate building niche sites, that’s probably not a great side hustle. But if you find out you get a weird energy from having guests in your house, maybe Airbnb is a good fit.” It is important for you to know that you have options. If you are serious about success, start with something you really enjoy. Ask yourself, would I enjoy doing this if I didn’t get paid for it? If it feels like a job with a paycheck, you are on the wrong path.
Minimize startup mistakes.
The less mistakes you make during your transition the more likely will you succeed. According to Loper, “a common mistake is when you don’t realize that you are your own boss now.” It’s cool to be your own boss, but the job comes with many responsibilities. You have to set your own tasks and priorities. You can’t wait for someone else to motivate you. It has to come from within. It takes discipline. Hold yourself accountable.
Create a rainy day fund.
You need to save money before you make your move. How much money? It depends. Loper states that you need “Enough of a safety net that you feel comfortable. For some people that’s two weeks, for others it’s two years.” The bottom line is you know yourself better than anyone. You know how much money you need in the bank to be able to sleep at night.
Manage your cash.
Smart cash management will help your business live another day. Income for entrepreneurs can fluctuate. In a business environment when banks are reluctant to lend to small businesses, managing your cash is key. Successful entrepreneurs are great at delaying outlays of cash as long as possible while maximizing income. You can greatly improve your financial health by encouraging your customers to pay fast, make deposit payments, require credit checks, issue invoices promptly, and track your accounts receivable.
Seize the opportunity now!
When is the best time to start a business? The right time is anytime. There is no best time. Regardless of when you start you will have much of the same challenges. It is even possible to start successful businesses during economic downturns. FedEx was started during the 1973 Oil Crisis. GE was started during the Panic of 1873. Even bad times are full of opportunities. Many new entrepreneurs worry about the wrong things when they are starting out. The most important thing is to start something. Many people spend their lives considering their options. Planning for the future is not action. Yes, planning is important, but not at the cost of action. Start something. Your first idea won’t be your best. Many millionaire entrepreneurs did not succeed until their third idea.
Focus on what matters most.
When asked, “What is a waste of time when starting a side business?” Loper replied: “Anything that doesn’t bring you new customers”. Spend most of your time generating new business. Hustle to find new customers. Talk with all those that buy from you and find out why they buy. Then, talk to those that don’t want to buy from you and find out the reasons they are not buying. Worry less about printing your business cards. Don’t obsess over what shade and color to use for your logo. There are many billion dollar businesses out there with ugly logos, but none without customers.
This article has been edited and condensed.
George Meszaros is a serial entrepreneur and the co-founder of Success Harbor. Success Harbor is dedicated to document the entrepreneurial journey through interviews, original research, and unique content. Connect with @successharbor on Twitter.
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