You’re fed up with the corporate world and you want out! You want to follow your passion and build your own business but you don’t know how to make the transition financially, so you stay stuck and unhappy where you are.
Let’s do something about that!
Step 1: Financial Reality
First, you need to understand the reality of your financial position. How much do you ‘need’ (not want) to earn in order to cover your financial obligations? Then add 20% for wiggle room. This will tell you two things; 1) You don’t need as much money as you first thought (phew) or 2) you have no idea how you’ve been surviving!
Example: £1k (financial commitment) + £200 (wiggle room) = £1,200 monthly target
This is a really great exercise to put your finances into perspective and get you in control of the steps you need to take towards building your own business or at the very least finding ways to make a second source of income.
Step 2: Letting Go
Now look at your expenses and identify what, if anything, you can stop spending money on.
Do you subscribe to magazines that you don’t read? Perhaps you pay for a gym subscription and you only go once a month. How about a pay as you go gym to make your payments cheaper? Do you have credit cards and if you do can you switch to a better rate? Are any of your contracts (mobile, broadband, gas & electricity) coming up for renewal? Can you negotiate a better deal or change provider? Really have a think about where you are spending your money and where you can cut back.
Step 3: Financial resources
Now you know how much you need to survive, where your money is going and what you can cut back on it’s time to think about how you can make extra money. Write a list of three things you could do to earn more money that won’t impact heavily on your time. After all you need time to build your business. Have a think about what you could sell or what services you can offer.
Check out the ideas below:
- Sell books, CDs/DVDs, clothes
- Clear out any old junk and sell at a car boot sale
- Sell your baking goods on a local market stall one Saturday afternoon
- Earn money from dog walking/sitting and even house sitting
- Rent out your spare room on Air B&B and don’t pay tax on the rent (up to £7,500 a year)
- Rent your room during your 2 week summer holiday – £600 a week is £1200 (your monthly target)
- Sell your old smart phone
- Do some translating if you’re multi-lingual
Everything you are doing here is embracing your entrepreneurial spirit. You’re regaining control and moving one step closer to escaping the corporate lifestyle and setting up as an empowering business owner.
Step 4: Regaining Control
Regaining control of your finances doesn’t mean that you have to live a frugal life in pursuit of following your passion. Although you will have a much better chance of success in your business if you’re not worrying about how you’re going to pay your bills.
Ask yourself whether you can afford to cut down your work hours from a five day to four day week? You can use this extra data to focus on your business. If you can’t then think about how much you would need to earn on that day to make up for it?
If you’re stuck in a five day week then list three ways you can make up the shortfall. For example, consulting, running workshops/retreats or selling products. When you have your list put a fee next to each option. Don’t under sell yourself though. This is your time and you are offering a service that people will pay you good money for! Once you have your list start with the easiest option.
Step 5: Start Thriving
Although you have a plan for making more money I suggest you run your business in the background for six months, using your evenings and weekends (check your employment contract first). This will help you understand which aspects you enjoy (or don’t enjoy), what makes you the most money and where you spend the most time. As you see an increase in your income, your confidence will grow and you’ll be prepared to put in more time and money.
As your earnings increase you can put more money aside for the leap from corporate employee to business owner. I suggest you have six months living costs behind you, if possible, and if not I would aim for a minimum of three months.
So in summary, follow these five steps to get you ready to take action in your business:
- Identify what is important
- Let go of what is not important
- Create a secondary income stream
- Do what you love
- Transition from corporate to business owner
Now you know what to do you can take the leap from corporate employee to business owner. You own this and will be fabulous – I believe in you!