You’ve quit your job and are ready to start a new business.
What are 10 things you can do to make smart decisions without breaking the bank?
If you’re reading this blog, there’s a good chance you’re thinking about quitting your job, you just made the conscious decision to do so, or the choice got made for you and you were laid off.
No matter what your situation, you may be thinking, what the heck do I do now?
The idea of starting your own business or transitioning to a freelance lifestyle can be overwhelming, so today I’m going to tell you where to start. Here are my suggestions for:
The first 10 things you should do when starting your own business
1. Define and control the message
The first thing you need to do is decide what happened and what your basic plan is moving forward. If you were laid off or fired, definitely check out The Hopkinson Report Episode 180, You’ve been laid off: What to do in the first 60 minutes.
It’s very important to be able to speak to your situation clearly. In some cases, it’s easy, not to mention fun. Your message might be, “After 21 years in the corporate rat race as a lawyer, I’ve decided to leave my role as an attorney and focus on my passion for helping others, by starting a non-profit that helps inner city parents get legal help that they need.”
If you were laid off, your message might be “My company recently restructured and my job as creative director was eliminated, so I am taking this opportunity to launch my career as a freelance designer helping photographers build websites to showcase their work.”
Additional things to add might be how people can help you out as you get started, which could include client referrals or testimonials for your website.
2. Relax and regroup
While the reaction for many is to immediately jump into action and attack this new stage of life, I think it is beneficial to take a break and regroup for a bit. I’ve heard from many people that took several weeks off after a layoff, just because they hadn’t had a real vacation in years while at their previous job.
Never got to take that 3-week safari in Africa that you’ve been planning for a lifetime? Take an honest look at your life. If you don’t take it now, will you ever find the time to go?
However, this time for self-reflection doesn’t mean you need to spend your entire severance check on a bungalow in Tahiti with an infinity pool halfway around the world. Maybe it’s just a few weeks around the house doing those projects you never got around to because you were too tired. Or maybe it’s a week camping with the family at a National Park and going on a nature hike to clear your mind. Take a little time for yourself.
3. Finalize Severance, Cobra, Benefits, Health Insurance
Take the time to make sure you fully understand any severance package your previous company has offered. If needed, have a lawyer go over any documents, and don’t be afraid to negotiate any items you feel should be included. Most likely, your employer wants a clean break and wants to avoid a disgruntled employee, so there’s a chance they’ll relinquish to make you happy.
Next, figure out your health insurance, as this can be one of your most costly expenses and a source of stress. The easiest method would be to change over to a spouse’s plan if that is an option. Otherwise, another alternative is to stay under your current plan via Cobra. Going on your own, consult resources like the Freelancer’s Union or speak with friends that own their own business to see what plan they recommend.
4. Assess money issues/unemployment
Once your health insurance situation is set, turn to the rest of your finances. If you are eligible for unemployment, sign up for that immediately and set up a reminder to claim your benefits on the same day every week. Speak with your financial planner if you have one, or sit down and do an honest assessment of where you are.
- What are your exact monthly expenses?
- What can you reasonably expect for income moving forward?
- How much savings do you have?
You might want to take immediate and sometimes drastic actions to cut costs. For example, cutting down on eating out, cancelling services like cable TV, excessive cell phone features, subscriptions such as Netflix, or any large planned purchases.
5. Get invested
However, it is important not to be penny wise and pound foolish. Even though your high speed internet access bill might be costly, you’ll need it to surf the web for jobs and network online.
This also might be a time to INVEST in yourself. For example, even though I had just lost my job, one of the first things I did was head to the Apple store and upgrade my aging 4-year-old iPhone to the newest model and plop down $1200 on a new Macbook Air.
Sound counter-intuitive? Perhaps. But I knew that as a freelancer, speaker, teacher, and consultant, I would be working around town and around the world with my laptop constantly at my side. Not only would the faster processor make me work more efficiently, but lugging my current 5 pound model wouldn’t be doing my back any favors. Lastly, because I’d be on my cell phone with clients on a consistent basis and not utilizing a landline at the office, I needed a phone and service I could trust without dropped calls or them yelling “You’re breaking up! I can’t hear you!”
There are a few more things you’ll want to invest in to present a professional brand. If it’s been awhile since you upgraded your closet, get yourself a few “go-to” outfits to evoke the image you wish to project. Once again, you don’t need to break the bank, so we’re not talking half a dozen Armani suits at $4000 a pop.
For me, it was an opportunity to go through the 7-8 suits and sportcoats I had in my closet. A few were in great shape and I brought them to the dry cleaners to be pressed. Several were outdated or never fit right, and I donated them to charity, making sure to take the write-off. Four of them were in great shape, but the sleeves were too long. For about 10%-20% of the cost of a new suit, I had them professionally tailored and the difference was amazing.
[Note: According to GQ's Style Guy, your cuffs should at least half-cover your watch, and a half inch of shirt cuff should show below your jacket cuff, just as a half inch of shirt collar should show above your jacket collar.]
Lastly, another great investment is your brand presence online. For just $12 a year you can secure your own URL on GoDaddy.com, and for free you can redirect to About.Me page or your LinkedIn profile. On the higher end, you can hire a designer to create an elaborate web presence, including a color scheme and design to carry over to business cards.
6. Get organized
In short, get your sh*t together. Clean up your workspace. Organize the files in your home and on the computer. Back up your hard drives. Throw away anything you don’t need, and put the important stuff where you can find it. If your home and life feel organized, so will your business.
7. Assemble your team of experts
Assemble your team. Even pro golfer Phil Mickelson has a swing coach, so don’t be afraid to ask for professional help. Although it doesn’t come cheaply, the following professionals can often save you time and money in the long run:
- Financial planner: For assessing your financial status and investments while you build your business and look for work or clients
- Attorney: Can help you set up an LLC or other business entity
- Accountant: Can help you navigate the tricky world of entrepreneurship and self-employment taxes
- Business coach: While they can be expensive and an experienced mentor can be a good substitute, often times a career coach can be worth the investment as they can help you accelerate your earnings
Also see: The Hopkinson Report Episode 147: The 10 people you need to successfully publish (or self publish) a book
8. Embrace community
Realize that if you are suddenly working from home after a long career in an office, you might be in for a culture change. Some people thrive on their own, but others miss the banter of the office and need a larger sense of community.
For some, the perfect answer is a coworking space. Whether it is a monthly membership or just purchasing a day pass and working remotely once a week, coworking spaces are a great answer to getting work done while interacting with others in your situation.
9. Network network network
I can’t emphasize enough how important it is to network. In fact, I set up 21 networking meetings in the first 60 days after I left Wired and started working for myself (yes, I kept a spreadsheet), and they were enormously helpful. Of course, not being in the office 9 to 5 and being able to take long coffee meetings at all hours of the day was a nice perk. But what was interesting was that this ended up not being just a one time set of meetings with my connections as I was building my business, but rather something that has continued on constantly in my business.
It’s also important to align yourself with key influencers in your network. Some connections will be more valuable than others and help you take your business to the next level, so be aware as you build this team of people closest to you.
10. Commit to your health
- A month after losing my job I started having very bad back pain. Was it my bed? A sports injury? Stress? None of the above. I traced it back to the fact that I was now working at my home computer for 8-12 hours a day, and my chair was a basic wooden kitchen chair from IKEA.
The solution was to tap into several points I’ve mentioned… investing in myself, cutting costs, embracing the community, and committing to my health.
Rather than buy a cheap office chair, I did a ton of research on the best chairs on the market, tried several to see which fit my body type best, and decided to invest in a top-of-the-line Herman Miller Mirra chair worth $1200. However, I embraced the community of Craigslist, cut costs, and was able to buy the exact one I wanted from someone across town for $250 and a $10 cab ride.
- If you’ve spent years going out to lunch with co-workers at the fast food place near the office, only to put on a few pounds and get accustomed to that post-meal haze, if you’re working from home, you have a choice. Stock your fridge with healthy foods that will fuel your body throughout the day.
- Finally, if you’ve lost your job and are thinking about cutting out that monthly gym membership to save money, make sure it’s the right decision. Richard Branson, one of the most successful entrepreneurs of our time was asked to answer the question, “How do you become more productive?” His answer was a simple two word answer: “Work out.”
For myself and millions of others, working out leads to lower stress, better sleep, higher self esteem, healthier eating habits, better posture, and just a boundless amount of additional energy to out back into your business.
Once you have these 10 things in place, you’re ready to attack your new business.