I think we can all agree that entrepreneurship is at an all-time popularity-high right now, and that we’ve probably not seen its peak yet.
Personally, I think this is awesome. More and more people are leaving dead-end jobs and making something of themselves.
Not only is this good for them (as it allows them to discover and pursue their true passion), but it also is starting to
change the nature and definition of what a
job is. (more on that in another post)
As technology continues to evolve, we are faced with an increasing number of what I call
microproblems (some people
refer to these as
first world problems):
Now take a look at the above images. For a long time, these problems were just accepted as the side-effect of having access to the technology that brought that problem. So the common response would be something like:
Yeah, the headphones are tangled, but you have HEADPHONES.
Ok, so the packaging is difficult to open, but that packge was delivered in 2 HOURS!
Well at least you HAVE a zipper.
Would you rather NOT have a seatbelt?
And I think for a long while, that attitude was fully acceptable. But today, with more and more resources available to
the common person, individuals can take on those problems that are
uniquely human, and in a very real way, can create
a business and support themselves for life just by solving one small problem.
And so we have the tangle-free headphones (or the slightly more advanced bluetooth headphones), so-called “Frustration-Free Packaging”, and “Zuppies”. For the seat belt problem, most auto manufacturers just added a plastic cover to the seat belt buckle, so you don’t have to handle the hot metal parts any more.
This is really cool for a variety of reasons, and I think the success of smaller businesses like these has created an
unprecedented draw of talent into the entrepreneurial world with the advent of the
Virtually anyone can see a problem that they don’t think is being adequately solved, and they can solve it, and then get paid for that solution! It’s pretty incredible if you think about it, but it’s not without it’s potential pitfalls.
One of the major issues that I see all the time with first-time
side-hustlers is they think their day-job can “finance”
the side hustle. They are usually making a good amount of money from their day-job, and they like it, and so they figure
they can just keep that going and use the “extra” cash to handle the operations of the side gig.
The unfortunate side effect of this is a false sense of cash flow. Until you feel how short your cash runway is, you never really make the best financial decisions for your business. Sometimes even when you do feel how short it is, you can still struggle to make the right decisions. And the longer you operate being bankrolled by your day job, the less likely you are to ever really push for profitability, which means you never really have a business at all.
A business has its own budget. It pays its own bills. It feeds itself, it pays its own rent, it pays its own taxes. It’s a living, breathing thing that can stand on its own feet, even if it needs constant guidance and direction to last longer than a few days.
So when you have initial expenses (website building, marketing consulting, ad spend, etc), your goal in the initial days should be to have the business pay for those things. You should be shooting for the business to cover its own costs and be profitable on top of that.
Otherwise, it’s just a hobby. An overly stressful, often expensive hobby.
And that’s because
business IS profit.
Let me know what you think in the comments below. Also, don’t forget to share and subscribe.
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