How To Start a Business Without Going Broke

What to Do Before You Quit

Imagine being your own boss and setting your own hours. Yeah!  You can more than imagine it, you can practically taste it. You're dying to launch your own business, call your own shots, and work crazy hours with little to no pay each week, until you line up some paying clients. You already have a unique concept, product or service...now you just need to implement it. If this describes you, then you're ready to plunge into the unsteady world of self-employment. But how do you make the transition from day job to full-time entrepreneur without going broke?

  1. Get a reality check. Pick up any "how-to" book on leaving a job to go solo and most will tell you to not to leave your day job until income earned from your part-time venture rivals or exceeds that of your full-time job. I don't know anyone who has managed this Herculean feat. Typically, demands from your main gig leave you too worn out to devote any quality time to growing your side business. If you're like most of us, you might need to take the plunge to give your dream of self-employment any real chance of survival.
  2. Learn to do the hustle. If you're not already doing so, you'll need to start peddling your wares in the evenings and on weekends and using whatever free time you have to sell to your core market. And if you don't know how to hustle, you'll need to learn. In other words, you'll need to learn how to sell your product/service like nobody's business. Zero in on your target market and reach your customers online, at home (cold calling), with targeted ads and through friends and family. You should also attempt to do the following:
    • Find a business lawyer to set up your company's legal structure.
    • Get an accountant to handle your business taxes.
    • Launch your business website.
    • Identify high-paying clients for your product/service.
    • Contact your local small business administration for professional help with your business plan and assistance in securing business financing.
    • Network with other entrepreneurs to share ideas.
    • Advertise your product/services for free on the Craig's List website.
  3. Going solo is survival of the fittest. This is your plan to make ends meet once you quit your job and go solo. The name of the game is survival. Think of all the odd jobs you can do to bring in income to help pay the bills after you leave. You might consider these survival strategies:
    • Temporary staffing work (part-time while you run your business).
    • Consult in your area of expertise for money.
    • Turn your employer into a client by sub-contracting your services after you leave.
    • Lower your overhead (pay off debts, turn off extra cell phones).
    • Consider renting out part of your house to help with the mortgage.
    • Moonlight on evenings and/or weekends part time to keep the cash coming in.
  4. Plot your big getaway. Even bank robbers plan their escape down to the minutiae - at least the ones who are serious about not getting caught do - and you should too, if you're serious about launching your entrepreneurial venture.
  5. Don't turn in your resignation until you've covered all your bases. Here's a rundown of to-dos:
    • Calculate your monthly bills.
    • Figure out how much money you'll need to stay afloat, cover your expenses and pay your bills with no income for approximately 3 - 6 months.
    • Determine how much money you'll realistically be able to save from each paycheck to accomplish this.
    • Figure out (down to the exact pay date) how many pay periods you'll need to save the amount of money determined in step 2. This will be the day you turn in your two-week notice of resignation, but also plan on it possibly being your last day. If your boss is a jerk, they might try to pull the rug out from under you by asking you to leave that same day. Be prepared and know your employee rights.
    • Find out the exact number of vacation/sick days you have left and check your company rules before you announce your resignation. It may be a ‘use-it-or-lose-it' policy, in which case you'd better use it before you give notice.
    • Check your employee handbook to find out if you can comp out unused vacation days for cash, so that you don't accidentally use up your vacation. That could be extra money in your pocket in addition to the amount you estimated you'd need with no money coming in.
    • Work just as hard, to keep all your bridges open. You never know when a business opportunity might arise.

It may seem overwhelming at first, but eventually, you'll get the hang of it. And you'll feel vindicated when all your hard work pays off to make you financially stronger than you ever could have been working for someone else.  Online classes in all aspects of business - from finance to marketing - will help you improve your bottom line over the years.

Joy Davis is a full-time copywriter who left a medical publishing firm to strike out on her own. She continues to write copy for clients and loves the freedom of working for herself. For questions or comments, you can contact Joy at jdavis@bamboomediainc.com.
 

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