Starting a new business can be tough a lot of the time. Bootstrapping a new business without the right preparation is tough almost all the time.
The sensible way to start working for yourself or to launch a business without any funding or loans would be to make a plan months before you make the leap. Start saving some cash to use as a buffer at the beginning and if you have any emergencies. If you can, perhaps trial it as a sideline while you’re still in your previous job – the best way to test demand from potential customers or clients, and also a great way to find out whether you’ve really got the drive and determination to make it work. Better to figure out you’re not bothered when you have a safety net, rather than when you have 0.01p in your bank account and it’s weeks until payday.
I wasn’t sensible.
When I started working for myself it was at short notice due to plans to restructure by my employer. I could have potentially stayed, but felt like it was time to do something different for personal, as well as professional, reasons. I’d learned to tolerate commuting, but didn’t enjoy the expense in time and money, particularly when it meant missing out on so much time with my young son.
So I didn’t have much of a buffer saved. And that quickly evaporated in the first couple of months as I started to realise that I wasn’t as motivated to find a new role for an employer as much as I was to work for myself.
And when things are going OK, or even well, that’s fine. Thanks to great friends, former employers and colleagues, lovely clients and new contacts I managed to survive and at times I even thrive. At the start of 2013, I reached the stage where I had enough income to bring in someone fulltime to help me run the business, in addition to the various people we’ve employed on a project basis.
But when things aren’t OK, the lack of preparation 3 years ago still comes back to haunt me. Bringing in a fellow director essentially meant my income from the business was halved – not a long-term problem as we were showing plenty of progress and growth with a lot more planned.
Then we were hit by an external financial issue which was outside our control, and which cost us thousands. That essentially wiped out our small safety net in one go, and took months of hard work to recover from. All the time we’ve been dealing with the day-to-day issues of delivering quality work, chasing late invoices, securing new clients, etc. By the end of the year things have been looking better, and we were planning some big steps forward in 2014 when another external factor hit us just before Christmas.
The big lesson, and advice I’d give to anyone, is to plan for everything to go horribly wrong most of the time. Make sure you have cash,contracts and a minimum viable level of income for surviving in place at all times. And ensure that you are constantly thinking about what happens if something goes wrong before it actually does. I remember reading that most successful entrepreneurs tend to resemble rabbits rather than lions, because they’re constantly slightly nervous, paranoid and scanning around for potential predators and threats. More than that, you need to know what action to take, and to get on with it, in the face of problems.
That may mean cancelling services and lowering your costs in advance of problems, or it may mean taking a gamble and actually increasing your spending on advertising or marketing before a competitor becomes an issue. The important thing is to not end up paralysed like a deer in headlights as the problem gets bigger and bigger.
As for me and my business? While the bad news is that we may not be able to invest in some of the plans we’d put together quite yet, the good news is that we still have a growing client base, we’re able to refocus some of our efforts, and it’s an incentive for us to innovate more quickly. And thankfully I also have someone I respect a lot working alongside me to share that journey with rather than doing it alone… By the end of 2014 I expect to be writing about the best aspects of building a business from nothing but a laptop, and how we’ve progressed so far in 12 months….