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Personal Finance for Entrepreneurs:
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When starting out on your own, ideally you want to start on a firm footing. Here's how
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When starting out on your own, ideally you want to start on a firm footing. Here's how
1. What NOT to do:
- decide you want to quit your 9-5 and start a business
- start that business without testing it first
- have no money, hit the wall
This is how people THINK it works, but it's the opposite of how things should work
- decide you want to quit your 9-5 and start a business
- start that business without testing it first
- have no money, hit the wall
This is how people THINK it works, but it's the opposite of how things should work
2. The most important thing to getting started on any entrepreneurial journey is GRADUAL
- get started gradually
- test the idea first, in a few iterations, to see if it works
- invest zero or small amounts in anything to test what works
- get started gradually
- test the idea first, in a few iterations, to see if it works
- invest zero or small amounts in anything to test what works
3. These tests should be small-scale, so you can do them around a 9-5, or maybe you can explore several businesses in parallel
The key is to keep in mind that you're testing, laying the groundwork, but you're not yet fully committed
The key is to keep in mind that you're testing, laying the groundwork, but you're not yet fully committed
4. "What does testing mean" you may ask.
It means creating a minimum viable product and a sales strategy around it. And you see what works to get people to buy it, in a way that's profitable for you
It means creating a minimum viable product and a sales strategy around it. And you see what works to get people to buy it, in a way that's profitable for you
5. Example
- you design a small productivity software app
- you buy ads and get people to a landing page
- you see if they buy
If the conversions cause you to break even or better, then you are on to something. If not, redesign the product, the copy or the product
- you design a small productivity software app
- you buy ads and get people to a landing page
- you see if they buy
If the conversions cause you to break even or better, then you are on to something. If not, redesign the product, the copy or the product
6. After the testing starts to show promise, then you ramp up.
- If a sales channel is working, you spend more money
- If social media is working, you devote more time to it
- If email/SEO/blogging, then you write more and send more
You try to ramp up to make a decent income
- If a sales channel is working, you spend more money
- If social media is working, you devote more time to it
- If email/SEO/blogging, then you write more and send more
You try to ramp up to make a decent income
7. At this point, you leave the 9-5 to focus on your new venture only if a few conditions are met:
- Your income from the new thing ALREADY matches your 9-5. No point in losing one to get the other
- It could multiply your 9-5 if you focused on it
- It's sustainable not a fad
- Your income from the new thing ALREADY matches your 9-5. No point in losing one to get the other
- It could multiply your 9-5 if you focused on it
- It's sustainable not a fad
8. Then, you also want to make sure that you have the following
- 6 months of bare-bones living expenses in the bank. Nothing worse than having to scramble to pay rent and not focus on your business
- A business plan for how you'll grow it
- Enough funding in the business
- 6 months of bare-bones living expenses in the bank. Nothing worse than having to scramble to pay rent and not focus on your business
- A business plan for how you'll grow it
- Enough funding in the business
9. If you have these in place, you're all set up for success.
Take the plunge!
Take the plunge!
