Cash is King
I recently wrote an article about how you can start your own business while still juggling a day job. Not only is it possible, it’s also possibly the best way to make the transition from employee to entrepreneur without losing your life savings in the process!
Starting small and putting in the effort while you still have a steady income makes a lot of sense. It’s hard to juggle two jobs – and yes, if you’re actively working on your new business, it is very much your second job – but if you want something bad enough you can make it happen.
Keep Your Eyes on the Prize
One of the items I mention in the article is the importance of staying on top of your budget. Eventually you’ll get to the point where you want to focus solely on your own business. Of course you will, because YOUR business is YOUR passion and YOUR dream, and wouldn’t you rather spend every available hour working on your dream rather than working on someone else’s? The only way to do this is to work for yourself.
In order to work on your dream full-time, you’ll need to quit your job. And in order to quit your job, you’ll need money in the bank. Again, the best way to make this transition is to have some customers already buying what you’re selling before you quit your day job to really amp things up. But how many customers is enough to walk away from your job and still pay your bills? This is where budgeting comes in. If you can master your expenses, grow your revenue, and get insight into your financial transition points, you can plan toward making this transition a reality without any unforeseen financial disaster.
Know Your Numbers
What is a financial transition point? This is what I call a turning point in your financial forecast. Many people think that the right time to quit their job is when their side business earns them as much money as they would earn as an employee. Maybe. This is certainly one potential transition point. But there are others as well, depending on how much risk you want to take, and how much risk you need to avoid.
But you can’t make an informed decision about any of that until you have all of the information. And there’s no better way to assess your financial position than by taking the time to write down what you spend and how you spend it. More importantly, what you plan to spend (and earn) in the future will help you realize your business dreams and stay 100% focused on your goals.
Keep it Simple
You don’t need complicated or expensive software to do some basic budgeting and financial forecasting. Create an inventory and make sure you include all of the money you earn (income, sales) and all of the money you spend (business and personal). Understanding how your money flows is the first step in turning your dream into an action plan.
If you need a little help, or just want to save yourself some time, sign-up and download my basic budget planning spreadsheet for free. It’s simple to use and has everything you need to get started today.
The lack of money is the root of all evil. ~Mark Twain