When I decided to leave my 9-5, six-figure career and begin working directly with entrepreneurs and small business owners, I expected to be working with people who needed help with improving their profitability and cashflow. What I did not expect was to be working with people who are close to hitting rock bottom, not just financially and professionally, but mentally, emotionally and physically as well.
For instance, I recently spoke with a business owner whose business has been struggling. Her circumstances are complicated by the fact that her business partner is also her husband. As we talked about her problems and concerns, we covered some topics that were very uncomfortable, and she began crying. She was so exhausted and unhappy that she no longer enjoyed going to work, and this stress invariably spilled over at home.
That same week, I also spoke with another business owner who has been using his retirement and investment money to supplement a $50,000 weekly payroll. The strain of mounting debts and considerable losses has begun to affect other areas of his life. He can’t sleep, and his family relationships are suffering. After listening to him describe his circumstances for 15 minutes, I said to him, “This has been happening for a long time and it’s only getting worse. Why do you keep doing this?”
Looking down at the ground, he explained how his father handed over the 87-year-old business to him while it was in good shape. Now, he feels deeply ashamed that the company - his father’s legacy - is faltering under his leadership. He feels obligated to fix the problem instead of passing this burden on to his own son.
When I started my own business, I would never have thought that I could help either of these business owners rebuild their lives with just an accounting background. But these stories are now becoming typical for me, and when I listen to them and see the pain in their faces, it reaffirms my decision to leave behind a successful career to start my own consulting business.
As a consultant, I now get excited about helping not just struggling businesses, but more importantly, the people behind those businesses. It gives me the opportunity to use my accounting expertise to address the root cause of their problems. This was not something I did in the 9-5 career I had before. Now, as a full time consultant, I specialize in it. But it took starting my own business to see how much more I had to offer.
I believe that many of you want to start your own businesses and realize your full potential as well. Out of all my podcasts and blogs, the one that has received the most comments and interest was when I shared my decision to leave my successful career to start my own business. In fact, many of you asked to meet for coffee or talk on the phone to discuss this topic in more detail. After several of those conversations, I realized that there are a lot of people out there who want to make this change, but are held back by fear. So, I thought I would share some observations and lessons to help guide you on your path and overcome your fears.
Let’s start by discussing the topic that everyone wants to know more about, but are too bashful to ask until the end of the conversation -- money.
Money
There are advantages and disadvantages with a 9-5 career role. The primary advantage is having a fixed income. It’s human nature to feel uncomfortable with uncertainty and instability, and when we know how much we are going to make each week, we feel confident that we can support our families and pay the bills. This, by the way, is why so many people have considered my decision to leave my six-figure career as courageous. It is also the reason why so many of those same people tell me that feel unable to do so themselves.
The truth is, you could probably make 2 - 3 times more money by creating your own business and using your specialization or expertise. The primary disadvantage with a 9-5 career is that you are more than likely discounting your value by 50 to 75%.
So how do you make this happen? The key is planning. My decision to forego another high-paying position and start my own business was part of a 5 year goal. Planning ahead helped me lay out a strategy to make that goal possible.
Step 1 - Define your ideal client
Do not underestimate the need to define who your ideal client is. Unless you have complete clarity with that, you can’t move on to the second step. It’s not hard to create that definition, and there are many worksheets available on the internet. To save you some time, here’s a link to my own worksheet on the ideal client. These 16 questions will give you the clarity you need. Even if you have an existing business, I still suggest you fill it out.
Michael Port, the author of Book Yourself Solid, discusses the importance of knowing your ideal client and describes not only a definition of that target customer, but an avatar that makes it feel even more real. This is what an avatar sounds like: “Nikki Stanton, a 37-year-old divorced entrepreneur with a web conferencing business. She’s internet and business savvy. Invests most of her profit back into the business. Lives in San Diego in a gated community with her 10-year-old daughter Madison. She’s involved in her daughter’s school and drives her to dance classes. Has a home office and makes approximately $117,000 a year. Jogs three times a week in the neighborhood. She loves to find bargains on designer clothes and dreams of visiting Italy with her daughter some day.”
The more clear you become with your ideal client, the easier it will be to find them. If you are interested in filling out this worksheet, you can download it free on my website.
Step 2 - Find your ideal client
Now that you know who your client is, the next step is to find out where they spend their time. For me, my ideal client is a small business owner with revenues between $1 million and $30 million. This person is struggling with their cash flow, but they are unsure of why this problem started and how to fix it.
At first, I didn’t have any idea where to find my ideal client. However, being mindful of who my ideal client was made it easier for me to recognize where to find them when I finally came across them. I discovered them at the University at Buffalo (UB).
Step 3 - Volunteer your services
There’s a branch of UB called the Center for Entrepreneurial Leadership (CEL). This center specializes in teaching business owners and entrepreneurs how they can run their company more effectively. This MBA-style course includes training on various business topics, from marketing to financial report reviews. Most importantly, this class is primarily for business owners. It offers them an opportunity to share their problems and get excellent advice from others who have experienced the same issues.
I learned about this branch of UB because I was already an adjunct professor teaching accounting at the university. When I met with the Dean in charge of this program, I simply offered my services without asking for anything. I noticed that they did not have a strong focus on teaching how to properly read financial reports and how to set and achieve goals, so I offered to teach both. Considering I had been teaching adjunct for 10 years prior, the Dean immediately said yes.
Step 4 - Test your products and services
Considering I have spent all of my 23 years of service working in small businesses, I assumed I knew exactly what small businesses wanted. I was wrong. I thought the business owners would be interested in my goal program. I figured they would be interested in learning the skill of how to complete goals, but after working with them on a volunteer basis, I discovered they were most interested in my cash flow forecast predictor. My ideal client is typically struggling with cash flow and has no idea how to track it. More importantly, they don’t know how to forecast it. This is where their need was greatest - and it is also one of my strengths. Leading with this product allows me to create the trust before offering my other services.
By working with so many clients before launching my own business, I was able to correct my own misconceptions, improve my cash flow forecast, and continue to add new forecast features, such as different scenario analysis and seasonality to improve the product even more.
Step 5 - Begin selling your products and services on the side
Now that you have an idea of who to sell to and what to sell, you’re ready to begin selling. Take the time you have after work or during weekends to begin selling your product or service.
If you don’t have any idea what to price your products or services at, consider your hours should be 2 -3 times the hourly rate from your full-time, 9-5 career. Alternatively, you could ask some of the clients you helped when you were volunteering because they will probably be more than happy to help you after what you did for them. You will know when you have reached the correct amount when you begin to get push back from the customer. In fact don’t stop pushing your rates up until you begin to get push back. The hardest part of consulting for me is sticking to the price that I think is fair. I want to help so much, and since I’m typically helping clients struggling with their cash flow, I sometimes find myself discounting my prices.
Step 6 - Take the leap! Go full time.
It’s unlikely that your side business will grow so much that you can simply transition out of your 9-5 job and into your full-time consulting business , especially if your business involves selling your hours. This means you will have to eventually take the leap, and believe me, it’s scary.
You have to have faith in yourself. For me, it helped to analyze the worst case scenario I might encounter, which was failing to achieve enough business to support my family. If that were to happen, I knew I could look for a job and go back to the career I left, as a CFO for a small business. I concluded that if this is the worst case scenario, then I was capable of handling it. So what was I waiting for?
I assume for many of you listening, your worst case scenario is similar. The key to overcoming these fears and getting started is planning. This goal of mine (which included these 6 steps) took approximately 5 years to come to fruition. It’s extremely important to lay the groundwork and set up the runway to improve your chances of your success. The more time you give yourself to find your ideal client and test your services, the better your chances will be at starting your own business and succeeding.
For me, it’s been over 6 months now and I have never been happier. I enjoy what I do and I am spending just about every working hour performing the work that I am best at.
I truly believe that everyone has a talent or a skill that they are better at than anyone else. When you can match up your greatest talent with your work, you will feel as if you’re not working anymore and you will be making a significant impact on improving your client’s business and life. Best of all, to you, this work will seem easy.