7 Tips on Starting a Business After You Have Lost Your Job
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- Change your mindset. It’s natural for people who leave employment and start a business to carry with them some of the culture from their previous job. However, you must realize that you are changing gears. You are moving from being an employee to being a boss. You are moving from being a follower to being a leader. This requires you to make the appropriate mental adjustment. In many ways, this is the most difficult thing that you must do when starting your business. It’s also one of the most critical.
- Become fanatical about keeping you cash burn as low as possible. Cash is the oxygen for you business. As a start-up you can’t operate like a traditional established business. You must have enough cash to stay in the game long enough to learn from your mistakes. At the beginning your business success depends heavily on how well you can reduce operating costs. There are some simple ways that you can do this. For instance use Skype or another VOIP operator instead of a traditional landline. Use free software such as OpenOffice and Google Docs. If you don’t need office space then start up in your garage. By keeping your cash burn low you increase your scope for failure. In other words, you can have more rolls of the dice. After all, learning from your mistakes is the best way to learn in the real business world.
- Get a part-time job. I know this is strange advice for anyone who is starting a business but hear me out. You need income to survive. You may have savings and a redundancy package but it’s good not to eat into these too much. By getting another job you are providing yourself and your family with income until your business gets off the ground. There are also some good psychological benefits to this as well. Because your time will be limited you will become more productive in your business time. You will also not be forced to make rash decisions for your business due to financial pressure. That’s right, it will help you avoid an “all in” moment.
- Leverage the Internet. The internet offers the best value for you to promote your business. As a start-up you should be looking for early adopters in your market segment. The Internet is a great place to find these. Using social networks and participating in online communities is a great way to do market research and make early sales for a start-up. Every start-up should leverage the Internet as much as possible.
- Realize that you must bootstrap and self fund first before you will get investment. This is particularly true in the current economic climate. Investors want to see traction. This is the most important thing. If you can bootstrap to early sales or even better, early profits you will find it much easier to unlock the door to investment.
- Realize that you probably won’t be an overnight success. It’s important to understand that you are more likely to succeed if you approach your business from the perspective of making incremental improvements that will accumulate into ultimate success.
- It’s a bit like gambling. Making real world business decisions is really making educated guesses at what you think might work. A lot of the time your decisions won’t work. It’s important to test and measure each decision so you fully understand which ones work and which ones don’t. This is the key to doing more of what works and less of what doesn’t.
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