Posted on August 2006, October 6, 2009, and December 30, 2021, by David St Lawrence
Prepare to change your lifestyle.
I have written so many articles about starting a business and striking off in new directions that I can’t believe I failed to mention one of the most basic rules of them all when it comes to starting your own business. This actually applies to startups of any size.
Rule #1 – Lower your cost of living to the point where you can pay for rent and food doing outside work while you struggle to generate enough income with your new business.
If you live in a comfortable suburban house and you bailed out or were ejected from the corporate mothership, don’t expect that you are going to develop a viable business in less than six months and a decent customer base in less than a year. Many people report that it takes two years or more to start generating decent cash flow.
During that time you will be laying out money for equipment and training and you will still have to pay the mortgage and all the other expenses for your lovely home. You will burn through your 401K and any savings faster than you can believe.
You need to completely restructure your living arrangements so that your cost of living can be covered during the startup period and for some time beyond.
This calls for a great deal of resolve and understanding by all members of the family. Life is not going to continue in the same old way.
Sell the Land Rover and the McMansion and look for a living and workspace that doesn’t leak too badly that you can buy for cash or on terms that result in a mortgage payment of a few hundred dollars a month. Buy a used van or pickup truck or a used car for cash.
Put enough money away to live on for six months and rethink your identity. You are starting over and you are no longer a senior manager of anything. You need to get busy and learn your new trade in a big hurry.
Take classes at a good craft school. Learn the ropes by working as an apprentice if you can. If your significant other is not engaged in learning a craft, she or he should find work that provides enough income that your bank balance does not dwindle.
Make everyone part of the new solution. Ideally, your new venture should provide work for all members of the family, but if the teenagers aren’t interested in helping with your new venture, they need to find employment and an educational path that fits your new circumstances.
You don’t have to follow this advice of course, because you can always search for another corporate berth instead of risking everything on your own business acumen.
However, you will probably have to sell the house and the Land Rover anyway if you are over fifty because it may take you a year to find a new job and it will pay less than your last job.
This may sound unduly grim, but it has been done by tens of thousands of people and they have emerged from the experience stronger and more self-reliant than ever before. The freedom that comes from managing your own destiny more than makes up for the temporary hardships of starting your
own business.
Find any successful small business owner, craftsperson, or artist and ask how they lived until they became successful and you will hear a story much as I have described here.
Talk to business owners who quit after a short, unsuccessful attempt at starting a career and you will find that they ran out of money before they could become self-supporting.
You will also find that their lifestyle had a lot of creature comforts that did nothing to advance their careers.
Whether this change in life is a forced decision or a free choice, changing your lifestyle and cutting your costs to the bone will give you the best chance of a successful transition.
If you have gotten this far, it has probably occurred to you that this same advice applies if you are embarking on a career in any new field.
Your lifestyle has to be leaner and meaner than you ever imagined if you are to succeed.
Wishing you the very best.
( I wrote the original post in August 2006 and am still encountering people who envision launching new businesses which will provide seamless continuity of their comfortable suburban lives. Get over it. Startups are the most exciting adventure I can conceive of, but they involve drastic changes to your lifestyle. As we prepare to enter the year 2022, this advice still applies. The world still needs your innovative solutions. You will only be around to provide them if you apply Rule #1.)
Image credits to:
https://greatnorthwestwine.com/wp-content/uploads/2014/07/union-wine-co-mobile-tasting-truck.jpg
https://naibuzz.com/how-much-money-living-big-in-a-tiny-house-makes-on-youtube-net-worth/
https://hensleyhomes.com/hensley-finding-community-when-building-your-downsizing-home