Many people I've met come up to me and ask: "Don't you worry where your next paycheque is coming from?" or "Why don't you get a stable day job? It's less risky..." While I understand where they're coming from, and my income does fluctuate from time to time, I'm of the opinion that relying on a day job is just about the riskiest thing you can do.
Most people have one job - they have a position where they work for one company, go to their office every day of the week, do their work, and get a paycheque once a month. And they probably feel quite safe and secure, looking at an entrepreneur like myself with a querying glance, maybe even a hint of fear. "You could lose it all", they say. "What if it all fell apart?", they ask. "Working for yourself is far too risky!", they cry. Au contraire, I reply...
You see, here's the thing. Working for myself, I decide how much I'm going to get paid. I pay myself when I want to. I don't have to go begging someone else if I need an advance, or if I need some time off - I just take it. Yes, I might make more in some months than in others, but the way I've structured my income, I get it from three or four different sources. You, miss scaredy-pants, only have one source of income. One. Think about that. If your boss suddenly decides "You know what, I don't think we actually need Sarah in accounts anymore, we need to cut back" BOOM!! SLASH!! You're gone. All of a sudden, you've got no income. Zero. And it happens all the time. Just ask around - I guarantee you know, or someone you know knows, someone who's lost their job in the last 12 months. Now that's risky...
Now, in my case, if I were to lose a client or, God forbid, some disaster were to happen to one of my companies, I'd be bleak, yes. But I'd still be in control of it - it wouldn't be the whim of some nameless suit in corporate cutting costs across the board. If one of my businesses failed, it would be because I'd let it happen (or some freak Act of God occured, but let's not go there!). And even if one of my businesses did go under, I'd still have another two or three sources of income. So I wouldn't go from working to destitute overnight (and I know that I'd claw my way back!). I'd be relatively covered and still working - I'd still be able to pay the bills and live my life.
The second scenario above seems a lot less risky now, doesn't it? I guess I'll just never understand how people could put their entire lives in the hands of one company or one boss. It just boggles the mind. But hey, if they think it's the safe option, then who am I to judge?
Monday, July 13, 2009
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Although I agree with what you're saying to an extent I tend to think that your view is slightly tainted. The reason I say this is because when you started your business you were and still are living with your folks and your car was paid for, in other words your expenses were very low. you had little risk if any when you started out. for someone who is in a job and and has bills that are quite substantial at the end of the month the idea of leaving their job to explore a business venture may be unrealistic. well at least they would have a lot more to think about. You also acquired finance for your business through personal means. If that is not an option for someone then they have to go through an official institution and what happens if you cannot pay back a loan cause your business goes bang. You get black listed and from there forward it will be almost impossible for you to acquire finance again. Making future business impossible. Yes you can lose your job tomorrow. but it's a lot easier to find a new one if you are not ITC listed. Just some thoughts.
ReplyDeleteBrian, your thoughts are definitely valid, but I feel you might've missed what I was aiming at with the post.
ReplyDeleteI definitely wasn't trying to encourage everyone to up and leave their jobs and jump right into starting their own business. What I was aiming at was to say that having more than one stream of income (generally achieved by working for yourself in some form) is the smart way to go, as you then have options if you lose one of them. By all means, have a day job, but look at doing something on the side as well - it covers your arse to a degree if your job tanks, and could develop into quite a nice little earner.
You've actually touched on one reason why I think day jobs are risky, and that's the fact that you end up living out of fear - the fear of losing your job. Rather create some form of financial buffer for yourself, and you'll reap the benefits of not worrying so much from day to day.
To address your other points quickly as well: Yes, when I started out, my expenses were low, but one should always have as few expenses as possible - leaner business models always work better. In terms of my start-up finance, I borrowed half from a finance company, so was subject to the usual scrutiny. The other half was personal funds, yes. But how did I make those personal funds? By working a day job in the UK, and saving every last penny.
well Fine then
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