Last Updated Apr 12, 2011 8:53 AM EDT
And risky, too. Failure involves much more than the death of an entrepreneurial dream.
But for many entrepreneurs the rewards outweigh the risks: Financial independence, autonomy, the opportunity to do what you love... that's why millions of people dream of starting a business.
The key is to live that dream... and minimize your risk... and maximize your chance of success.
How? If you hate your current job, here's something you probably don't want to hear:
The best way, but not the easy way: A tremendous amount of hard work, discipline, and sacrifice is required. Fortunately those are the same qualities you'll need to succeed, whether you quit your job or not. Behind every successful business is an owner who worked incredibly, almost impossibly, hard.
Here's the best way. Take care of the legal stuff (you can start a small business in a day), then follow these steps:
Step One: Go Ramen Noodle. Most businesses spend money before they make money, and some go years before revenue exceeds expenses. No matter how much money you have in personal savings, it probably won't be enough. Cut family expenses to the bone. Eliminate all personal spending that is not absolutely necessary. Start-ups often fail due to a lack of money, plus a lack of funds can cause you to make poor decisions for the long-term. Cash creates options and freedom, especially the freedom to make the best decisions.
Step Two: Work Your Butt off at Your Job. You must continue to perform well at your job; lose it, lose everything. Yet you also need to spend time on your new business. The solution? Work incredibly hard at your job. Get as much done as you can within normal work hours. Eat at your desk. Be the outstanding employee who never has to stay late because she gets everything done during regular work hours. Time is your most precious commodity. Don't waste a second.
Step Three: Set a Demanding Business Schedule. When you leave work your workday is just starting: Now it's business time. Decide how many hours you think you can spend. Then suck it up and add more. When you're done, commit to your schedule. Don't just plan to work a certain number of hours; schedule those hours. When your schedule calls for you to work in your business from 8 pm to 11 pm weekdays and from 6 am to 4 pm on Sundays, do it. No excuses. Work your business schedule like it's your job -- because it is.
Step Four: Don't Complain About Your Demanding Business Schedule. This may be the second-hardest step. Say you start a landscaping business: Land a number of clients and every night and evening is tied up. If you're a consultant, meeting with clients will be difficult because you may have to find clients in other time zones or find alternative ways to deliver your services. In almost every case you won't be able to choose the work hours you want to work. Customers will choose your work hours for you. That's just how it goes. Deal with it. If you don't, you won't be successful or might be tempted to quit your job long before you should.
Step Five: Spend No Profits Before Their Time. Don't "reward" yourself for your hard work. Reinvest all profits. Use profits to set up the business infrastructure you need (not the infrastructure you want, the infrastructure you need.) Buy equipment and supplies. Advertise. Grow the business. Every penny you spend should further establish your business. Stay Ramen Noodle in your personal life and use business profits to turn a startup into a thriving business. Again: Cash creates options.
Step Six: Don't Quit Your Job Too Soon. Deciding when to quit your job and go into business full-time is the hardest decision you will make, especially if emotions creep in: You're tired, you're stressed, you're sick of your full-time job, and you want some semblance of a "real" life back. Understandable, but quit too soon and you'll regret it. (Which is worse, the pain of sacrifice or the pain of regret?) Stay logical and focus on numbers rather than feelings. Don't listen to yourself, especially late at night. Listen to your business. Your business will tell you when it's time to quit.
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