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You know that feeling, when you have an earth shattering, billion dollar idea and you simply must drop everything you are doing and start implementing right now? Whatever you are currently doing is no longer important and a sense of urgency is keeping you on edge. When can I start?
This is one of those “It depends” questions. What does “all in” mean to you?
- Leaving your 9-5 and working full time on your online business?
- Using all of your savings to fund your online venture?
- Borrowing to invest in your business?
There are several things you need to ask yourself when deciding to dedicate your time and money on an online business.
Have you validated your idea?
Gillian Perkins has a great program called “Validate” and it helps you make sure your business idea or product/course idea is financially viable. A lot of us get stuck on the validation phase because it takes a lot of work and you have to actually reach out and talk to people to know and understand what problems they need solving. Yes, she makes you set up calls with individuals that match the target audience and you then interview them asking questions relevant to the product you intend to offer.
If your idea is not viable, you will be wasting your time and resources in that business because it will never get off the ground.
Do you know where the money will come from in your business?
Business plans basics! Back in 2006 I was brimming with ideas for niche sites but I wanted to do things “the right way” – you’ll often see me trying to do this in all areas of my life – and bought this Business Plan Kit for Dummies in order to make my first business plan. I love the Dummies books and highly recommend them.
To my utter surprise in the second chapter was the question: Where will the money come from? I had never thought about this AT ALL. I just wanted to do this fun thing and yes, in the back of my head I thought about money, but really, I need to get the tech and the content right first. Right?
No, they were very clear. Before you start your business you need to know all the ways you will monetize it. Making money is one of the biggest reasons to start a business. Why wouldn’t you be thinking about this first? Now, the first thing I put in my brainstorming spreadsheet is Monetization Strategies, and you should too.
Can you afford to work full time on this business for 1-3 years until it starts making a profit?
When researching for this article, I read the number of years to get a new business afloat is actually 3-5 years and normally you’ll find out in the first year if you can keep going.
Do you have savings (that are not for emergencies)? Are you able to pay all of your monthly and yearly obligations in time without a full time job? What if you have an accident and need to pay hospital bills?
You’ll probably think I am being negative and trying to discourage you, but no. I am trying to make you analyze your reality to see if it will allow to live your dream. If you are so stressed by debt and creditors coming after you that you can’t do the work for your business in peace, you will fail.
A lot of people have started their businesses as a side hustle and then made the move once they are better prepared.There is no shame in that, even if our inner voice keeps telling us to “seize the day”. Yes, seize it. But put on that armor first.
What’s your contingency plan if you run out of money early?
A contingency plan helps you be prepared for an incident that may or may not happen in the future. I first heard it in relation to hardware and software systems when I was in college and I found it very useful in real life as well.
Please, do not have as a contingency plan to borrow money. Whether it’s from your parents or in-laws, friends or credit union, this is a bad idea. If no money is coming in, you will have no way to pay the loan back and if it’s with a business that lends money, you will start accruing more debt. Things might get out of control.
A contingency plan for this situation looks more like this:
- I will take a part time job to make ends meet
- If that doesn’t work I’ll get a full time job
- I’ll find places where I can save money in my business and in my personal life
- I’ll reevaluate quarterly my monetization strategies for my business
Are you willing to make sacrifices like moving back home with your parents and sticking to a tight budget?
You probably hate me right now. You’re probably saying to yourself “Moving back to my parents’ place or family home? This side hustle/business idea is supposed to improve my life, not make it worse”.
If you visit the Create and Go site you will find Alex and Lauren’s story and they did just that when they went all in with their blogging business. Eventually they started making a healthy income from their blogs and were able to live the life they dreamed of. That is, after learning lots of lessons on how to run a blogging business.
The key is how hungry you are to succeed in this business endeavor. What are you willing to do to succeed? That is the reason you need to get clear on your “Big Why”(Read more about finding your purpose in business in my article “Why Everyone Keeps Bugging You To Find Your “Why”).
I know those are difficult questions and scenarios to envision, but life can be harsh and it’s better if you are prepared. Perhaps it’s not just you but your significant other and kids that you need to consider. And who is free of debt these days? Student loans, credit card debt, etc. Finances can be difficult to navigate.
Put on your Sherlock Holmes hat and figure out these questions. Talk with family and friends about these possibilities and the best way to handle them. Be prepared.
Personally, I am risk averse, so I encourage you to wait until you are making a full-time income in your side hustle for at least 6 months before you go and quit your full time job.