In recent weeks I’ve had several conversations with folks who’ve hit a season in life where change is looking pretty darn attractive. The voice calling them to blaze their own trail, launch a new company and step out of an unsatisfying office environment is growing louder. Many of the issues in the current corporate culture make it appealing for people to launch a second opportunity. They feel compelled to leave an uninspiring environment to forge their own path. Going out on your own is an exciting proposition filled with promise, high expectations and the thrill of tackling the unknown. It also brings a new level of unpredictability. One question to ask upfront, is this a business or a hobby?
Here are a few thoughts on the realities of this decision:
Should I stay or should I go? The dilemma of deciding to move to part time in your day job or save money while you’re full time is complicated. I’ll say upfront, it’s also very personal. Remaining full time means all your business activity is relegated to evenings and weekends, which I’d suggest isn’t viable long term if business growth is the goal. On the flip side, scaling back your day job has a real impact financially, one that requires serious considerations of the ripple effects. I’ll address the part-time option here, since that’s the decision I made one year after we launched Red & Rugged. While going part time means you do have more hours to focus on your business, it also means you have to bring a daily focus to time management, because you’re now splitting that time with another role. Jumping back and forth between emails and phone calls related to two different roles is not ideal, and it decreases your ability to focus consistently on issues at either company. I dedicate full days to one role, to stay on one agenda and one business. I’ve learned to be more diligent about planning the week and what I have to produce each day – appointments, client communication, web content, social content, writing etc. Otherwise, the days slip by and little is produced. You have to be committed to the Sunday evening planning time, even if it’s 20 minutes. Discipline is key.
Sustaining the pace. In the first year, you’ll have crazy energy due to the excitement and enthusiasm of the new business. Long hours can even be fun, especially if you love what you do. I’ve seen it many times with co-workers and colleagues. And I’ve learned this lesson the hard way in years past. Year two of a business is different. Assuming you require some level of normal sleep, self-care, from the beginning, is crucial. Translated, if you burn yourself out in year one, with late nights, all work, no play, you’ll burn yourself out for future years too. Looking ahead, you’ll need that energy to sustain, persist, and plow through the long days. Year one is setting the foundation, however, year two and beyond will test you even more as you learn valuable (some say painful) lessons that are inevitable and unpredictable. Brand building, closing sales, product development, finding talent, and of course, financial management, are just a few of the tasks that require a founder’s attention.
A business or a hobby? You read it all the time in the business books: it takes twice as long and always costs more than forecasted. So true. That’s why investors love serial entrepreneurs. They’ve learned on someone else’s dime first. It’s also why the stats on successful businesses that make it past year three and five are so dismal. People run out of money, and/or the energy and will to keep going. (Remember, you are supposed to be enjoying the business.) Sales are key, and consistent, predictable sales is the goal. Revenue matters, and cash really is king.
Nothing happens without capital to invest and grow. If the decision is to run a business, you’ve got to attract revenue to gain momentum and offset your personal investments. This moves your company toward being a financially viable business, not an expensive hobby. There’s nothing wrong with a hobby you love, just make sure you know the difference.