How to setup a new career
This isn't a guessing game. If you want a new career, you need to know how it's going to operate before you say or do anything. There are some really fundamental things you have to have in place before committing yourself.
Experienced business people will have seen some of this before. But you'll remember that starting anything from scratch isn't exactly easy.
Where's the business coming from?
This isn't something you can guess about. You need to have real business possibilities, preferably quite a few of them, to make it work.
The quick way to set up a good, working, business is to network.
If enough people know you, and are prepared to do business with you, (it's not the same thing) and you have some truly credible leads to paying propositions, fine.
If not, Look Out.
There are serious risks in just putting an ad in the paper and hoping for some business. As a way of going broke while dying of boredom and paying bills, it's pretty good. As a method of doing business, it's obscene.
There are also some serious overheads in getting yourself noticed in the marketplace.
Marketing your services has to be done with a realistic budget, and a lot of skepticism about vague, expensive, promises of getting a great market profile from someone paying themselves by the hour with your money.
Added to which, good business contacts inevitably turn into networks, so you may well have been better off networking in the first place.
The only truly safe way of setting up your business is to do a lot of spadework in advance, making contacts, learning how to find your clients, learning market rates, and not risking your neck in the process.
You can do this from the sidelines, while in your safety zone.
There's a lot to be learned, and there are a wide range of mistakes available, which are better made when your life's not on the line. The fewer risks you have to take at startup, the better, if only for your peace of mind.
What's the income going to be, after expenses?
Cashflow is a business' bloodstream and oxygen supply. You can't base anything on theory, in this regard.
Either you're making enough, or you're not.
It's not that hard to figure out, if you're prepared to be honest about it.
In one week, you do three jobs. You make .
Costs, meaning money you can't avoid spending:
Food, , gas, , rent, , miscellaneous .
So you make , right?
Wrong. You also build up other costs in the process, and that's only one week.
You've also incurred costs of electricity, phone, ISP, and you have roughly the same costs coming next week, with or without any income.
Next week, same costs, no income, for the two week period, you're only in profit.
Add another week, and you're losing money, relative to your costs. In terms of cash, you're behind your costs.
Add another week, and you're having to think about selling the car.
This is a very simple example.
Believe it or not, though, that's exactly what suffocates new businesses. They can't handle costs for long enough to start making enough money to get ahead of those costs. Not knowing where the income/costs equation is doing to them until it's too late is the primary reason.
So when we're talking about revenue, you have to be able to cover costs in advance.
Don't blow your new career on dumb things like this.
Get some capital to cover costs for a while, preferably without using savings, nor not too much of them.
Allow time to build up a reliable income stream, as distinct from having a dripping tap for an income.
The plain fact is that you're not going to be generating income every second. Good luck to you if you are, but most people don't.
What do you have to pay other people as part of your work?
There's a sort of myth which says that anything you have to pay to earn income is fine, because it's deductible, or claimable as expenses.
Dangerously wrong, too. It's still out of pocket cost. Your tax bill might go down, but so does your actual cash in hand, if you're not careful.
Your new career can't run on mythology, and here's why:
Somebody has a job that makes them
Their deductions are .
If their income is 52 x 1000 per year, that's ,000 a year, less deductions. Income is ,000, and tax, for the sake of argument, figures out as .
They have ,000?
Nothing like it. After overheads, they may have nothing. That ,000 in expenses is killing them. It's 50% of their income.
It they made ,000, and were paying ,000 in expenses, They'd make ,000 and pay tax of say ,000, for the sake of neatness, so the net after tax is ,000.
They're ,000 better off, after tax, and their overheads are a lot easier to manage. In practice, they're 50% better off than they would be in a lower tax bracket.
BASIC RULE: Outlays are dangerous. Watch every cent.
If you have to pay too much, you're in trouble.
That shouldn't be happening. Either you have to raise your prices to survival level, or you're getting robbed by somebody. One way or another, get out of that situation, pronto.
Find another new career, if necessary, one that pays better and costs less.
How's your motivation?
Still fired up, raring to go, can't wait? Good, because if not, you might find yourself turning into a nervous wreck.
Motivated people succeed because they're always looking for more.
De-motivated people are always looking for less, or ways to avoid the issues.
This part of the story isn't about mystic psychology, Winners and Losers, or any other cutesy garbage.
It's about the fact that people can get de-motivated. They do less, because they're at stalling speed. They've lost forward momentum, for one of several reasons:Expectations too high
Bad business deals and situations
Too much work, not enough achievement
Not enjoying the work
Hating the business side
Not making enough to justify the amount of effort
Pretty good reasons, even if in theory you're supposed to be able to handle things like that.
However- Motivation is an important part of any career. It's the engine.
People get dazzled by expectations. I'll set up my hot dog stand, then, next week when I'm a billionaire, I'll…
Yeah, it's funny, but most people go through some period where something that looks great puts them in that frame of mind. The people that get hit with it and try to follow the mirage are the ones who get hurt.
That's one reason we're being so strong on getting the act together, and looking where you're going.
Bad business deals and situations are real killjoys. Getting let down on a regular basis isn't anyone's idea of fun, and in this case, it's very expensive non-fun, too. Not exactly motivating, if you figure you can look forward to another ten years of the same thing.
This is where risk management comes in, covering your tail under all circumstances. Be careful, only deal with people you're sure you can trusts, and always cut your losses, bail out rather than crash and burn.
Too much work means either you're taking on too much, or you need to get some efficiency happening. Not enough achievement means you're not doing the sort of things that create achievements. Check that out, and you'll see what's wrong. It's probably the type of work. Try for achievement-type things, and you'll eventually get somewhere.
Not enjoying the work means overwork. Take a break, schedule a holiday, get a cold for a week, if you have to, but don't get into a meaningless rut.
Hating the business side is simply an honest appraisal. You do hate it. So delegate it. Keep an eye on it, but don't turn it into an obsession with something you really can't stand.
Not making enough really means not being cost effective. Somewhere, something has managed to sabotage your cost structure. You'll need to find a way out, or get out, yourself.
These things are de-motivating, but they're also fixable. The idea's to avoid them in the first place.
See why we're not giving you any starry-eyed stuff about your new career?
People start successful new careers every day of the week.
They succeed because they know the traps, go around the minefields, watch their cashflow, and stay focused.
That's what setting up is about. Set yourself up to avoid the problems. You should be able to spot a risk miles away.