Many times when people think about somebody becoming an entrepreneur they think that on day one they had a job, day two they quit their job, and on day three they started a business – as if it just happens in three days. But it doesn’t happen that way. Most people start their business part time or they had a phase where they transitioned into going full time.
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When I interviewed Steve Wozniak, co-founder of Apple, I asked him what it was like for he and Steve Jobs when they first started Apple. Initially, they both had jobs, and then when people started buying the product and there was enough demand, they went full time. So a lot of people start part time. The key is to know when to go full time.
In today’s video I talk about seven items to think about when going full-time as an entrepreneur.
#1: A Proven Track Record of Selling a Product
Before you go full time as an entrepreneur, you need to have a track record of selling your product. For example, if you want to be a real estate agent, but you’ve never sold a single property, and you have nothing in place, and no savings, and you’re thinking that your family and other people you know will buy from you, it’s a bad idea to go full time. Yes, it works every once in a while, but it’s a bad idea to go full-time right off the bat.
You need to have a number of sales before going full time. The number I like is 50, but it depends on the industry. For example, in real estate it may be that you’ve sold six or ten homes before you’re ready to go full time.
Regardless of the industry, it’s important to have a track record of selling the product and consistently making money selling that product. And I’m not talking about a one-off success story or two.
You should also never go full-time after one big month.
The way I gauge my monthly income is to look at my last six months of income, and consider the lowest month’s income to be my real monthly income. For example, if on month one I made six grand, month two I made $1500. month three I made $3,000, month four I made $1100, month five I made $700, and month six I made $7,000, my real income is $700. That’s how I do my math.
#2: Your Business Revenues Cover Your Monthly Expenses
So, the second point is, to have the income coming in from your business cover your monthly expenses. So if your monthly expenses are $2800, and the net income you’re making based on your business is three grand a month, you’re ready to go full time. Generally, I like that to happen for a three to six month period before I go full time.
#3: Having Six Months of Expenses Covered
The next one before going full time as an entrepreneur is having six months of expenses covered. Now this depends on what type of a business you have. In some cases, people have an investor that covers expenses. An example of this is my friend, Robert Greene who wrote the book, 48 Laws of Power. He met an investor in Europe that said, “Look, I’ll cover your expenses for two or three years, you go write this book.” If you have somebody that’s willing to invest for you, and cover you, then you can go full time right now and make it happen.
But if you don’t have an investor, you need to have six months of your expenses covered before you go full time.
#4: Whether You’re Married or Single, You Need This
Listen in here to find out what helps many entrepreneurs make it in the beginning.
#5: Timing
You’ve heard it said that timing is everything. A lot of the people I coach about going full time are afraid, and because of it, they wait way too long. Perhaps they’ve been ready for a long time, but don’t want to work as hard as it’ll take to go full time. If you’re putting it off, what you’re really saying is that you’re afraid of how much work you need to put in and you really don’t want to work that hard. You know deep down inside that you can make it, but you don’t yet have the work ethic to succeed.
Others are the ones who do it too early. They should have waited a month or two more before going full time.
But the bottom line is that there’s never really a perfect time to go full time. I’ve never seen anyone do it perfectly. Regardless of who does it, it’s going to be ugly at some point in time when you decide to go from being a W-2 employee to a full-time entrepreneur, but there is a timing component to it. And you’ve got to know if you’re way too early or way too late.
#6: Guts
The next one is that it takes courage, and you have to have guts to go full time as an entrepreneur.
I have some friends that were making six figures. They were doing well and thinking about whether or not they wanted to go full time. When they finally did, the wife got pregnant. Talk about anxiety and panic! But this month they’re going to net somewhere around $50,000, and if they didn’t have the guts to go full time as entrepreneurs, that would have never happened. It wasn’t perfect timing for them, but they just had the guts to do it, which is why they are where they are right now.
#7: Talking About it With Your Family
Before you go full time as an entrepreneur, you need to sit down with your loved ones and let them know what will happen with your schedule moving forward. If your family is used to you having traditional employment, they may expect you to come home from work at 5:00 p.m., but that’s not how it’s going to be with you as an entrepreneur. You need to get the buy in of your family on the type of schedule you’re going to have the moment you become an entrepreneur. They need to understand that is not a 9-5, you’re going to be working double time; there is no 9-5 as an entrepreneur. Prepare them for your need to work from 7:00 a.m. to 10:00 p.m. or sometimes even 11:00 or 12 p.m. That’s the reality of becoming an entrepreneur.
It helps to ask yourself the question of why you want to become an entrepreneur. Is it:
- Freedom?
- Lifestyle?
- Control?
- Building a legacy?
- Being part of something very big?
- Solving a big problem?
- Finding a way of doing it better?
- Financial freedom?
- Victories?
Everybody wants those things, but going through the process is messy. It’s like the process of making a sausage. Sausage may taste very good, but the process is as nasty as possible, and very few people want to go through that process.
If you do it right as an entrepreneur, and make your transition from part-time to full time following these seven points that we’ve got here, it will make for a better transition of going full time.
If you have any questions about going full time, comment on the bottom and if you haven’t subscribed this channel, please be sure to do so by clicking on the button below.
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