What is the best way to start a business…please don’t burn the boats.
It tells the story of Cortez who ordered his men to burn their ships. They will now either win or die. Now I like much of what Valuetainment will teach you, though I do have some issues with how he makes his money from selling life insurance.
Here is why this is bad advice: Most businesses take a while to make money. And by a while, I mean years or a decade. Heck Twitter losses money most years. And if Twitter with millions of users can’t make money most of the time, then you SHOULDN’T BURN YOUR BOATS!
What should you do instead?
These ideas are based on my personal experience and opinion and should not be considered professional financial investment advice. Furthermore, the ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.
- What Is The Best Way To Start A Business?
- The Importance of a Day Job
- Planning and Preparation
- Making the Leap
- Managing Your Time
- Don't Quit Your Day Job (Yet!)
- How Can You Succeed Financially?
- Get a Handle on Your Finances
- How The Rich Make Their Money
- Are you living your best life or are you stressed about paying the bills?
- About Dwight Scull
What Is The Best Way To Start A Business?
The best way to start a business is to brainstorm two things:
1) What do you know?
2) What problems can you solve?
You see a profitable business makes money because they solve a problem. They make more money if they solve a problem for more people or solve a hard problem.
Why People Make Less Than Others
To say something very controversial I want you to look at two jobs: elementary school teacher and any famous sports star.
Before I begin this I want to state that my grandparents were elementary school teachers for over 20 years apiece.
Okay so hopefully that will calm some of the hate mail saying teachers should make more money – and yeah they should but here is why they won’t make what they are worth.
There are a lot more teachers than famous sports stars. This means that it is easier to become a teacher. Also, teachers solve problems but only for 15 – 30 students at a time per year. Sports stars provide entertainment for let’s say 50,000 (probably a LOT more, but die-hard fans would easily be 50,000) people every single game. So they are paid millions because the better they do their job the more people watch. The more people watch the more advertising dollars can be gained.
Simply stated. I would argue that teacher should be paid more, but they will never make the amount a sports star does because they only reach 30 people a year not potentially millions.
But why does that matter to you?
How Can You Succeed Financially?
There is a clear path toward financial success and security.
It isn’t just being a worker for 45 years. Although for some it may involve that.
If you want to know what practical steps are needed to achieve financial freedom read my article on how to achieve financial freedom.
Hard Problems + Big Problems + Lots of People = Big Money Solution
If you know something few people know you can charge more.
The bigger the problem you can solve, the more you can charge.
The more people you can impact with your solution, the more you will make.
If you start a side business selling bookmarks on Etsy you may be able to get a lot of people to see your shop, but the problem isn’t big. I normally just rip paper for a bookmark… So you won’t make $100,000 a year selling bookmarks on Etsy.
The Importance of a Day Job
Since it can take years to get a business where it is profitable having your day job gives you two things:
1) Money to live on (very important)
2) Money to invest in your business until it is profitable.
Also if you are in a larger company you can take training that depending on your business idea could be beneficial to both your business AND your employer.
Get a Handle on Your Finances
Knowing what your net worth is and how your actions impact your financial future is probably the MOST important thing you can do for you and your family.
Find out how to do it quickly and put it on autopilot. Money doesn’t have to be hard.
Planning and Preparation
Once you start your small business you will need to juggle a lot of things. This can be very daunting to those just starting out. If you are used to only working 40 – 45 hours a week you will find that your small business may take an additional 20 – 40 hours a week.
You will need to learn how to balance juggling your full-time job, a side business, and any family and social commitments.
To be honest most people are unable to do just that and that isn’t a problem it is just something to know going into it.
I would also like to address something that many don’t.
What are your goals for your business? This determines the amount of time you will need to spend. If you only want an extra $100 a month I was able to do that in my Etsy store in about 4 months’ time with about 40 hours of time total and then about 2 hours a week after that.
Now if you want a job quitting money then we are talking about more time being spent.
What About Taxes and Legal?
You should consult a tax professional. When you are a small business owner you get to pay both sides of the Social Security and Medicare taxes. Your current employer is picking up the other half right now.
You need to pay your taxes as a business quarterly not annually when you start to make money and you will need to hire help unless you are familiar with business tax codes in your area.
You will want a lawyer to incorporate your business and with the tax laws changing in 2018 many things written before those laws were written are now obsolete.
You may want to consult other businesses in your area to make sure you aren’t missing anything.
How The Rich Make Their Money
Have you ever wondered how the rich make their money?
Well they start by working a traditional job (well 80%+ do) and then they build assets over time until they are wealthy.
There are different types of assets that literally anyone can get into. Some are very active. Some are 100% passive. Most are what I call passive-ish. Lots of work at the beginning and then almost none later.
Click here to read From passive to active income.
Making the Leap
Fast forwarding months or years into the future. You found a problem you want to solve. You found an audience. You built or are selling someone else’s product. You are finally making real money at your business.
Can you burn the ships now?
Well that is up to you. Some people will put a number on it and quit their full-time job then.
Others, figure out how to outsource as much of the business and either quit their full-time job or keep it.
I would suggest that you make double what you are bringing in now for at least 6 months (some would say two years) before leaving your full-time role. And that would be after all expenses. This would be the amount you could pay yourself to run your business, not the number of sales the business brings in.
Managing Your Time
If you have a spouse and children then try to set a time daily to work on your business.
This may mean you get up at 4 am to work until 6 am. Or stay up until midnight (which is what I do) to work on your business.
Having a set schedule where you can be alone will allow you to focus on your business.
In the beginning, you are giving birth to a new idea and that takes lots of time and energy.
I would encourage you to find ways to make small monetary wins early so you can get that dopamine rush.
After a while I would also suggest you hire help in the form of virtual assistants that you can push work on that doesn’t require your expertise. This could be creating a blog post, social media post, monitoring your email, or customer service, really the sky is the limit.
If you haven’t read the classic 4-Hour Work Week I would start there to get ideas.
Are you living your best life or are you stressed about paying the bills?
In this quick 2-page PDF, I cover 5 ways you can get your financial life back on track.
I used to live paycheck to paycheck and after years of paying off debt and maximizing my investments I am now able to save and invest more than 45% of my wife and I’s gross pay.
This allows me to live comfortably (not a crazy rich person) and sleep better at night. If you want this let me know where I can send it to you below.
Don’t Quit Your Day Job (Yet!)
Most small businesses fail in the first three years. That is because few can make money and require a lot of time. They aren’t solving the right problem for the right people, or they are but that problem isn’t a big enough problem to make enough money.
So start there:
What problem will you solve?
Who has that problem?
How much of a problem is it?
Too Many Problems To Solve: Plot Them Out
If you have several ideas list them out.
Take out a piece of paper and make the following list with your own ideas.
How painful is it to have this issue? Will you do literally anything to fix it (10) or you don’t care (1)?
How many people experience this problem? Everyone (10) or like 50 people (1).
Do you have the ability to fix the problem easily (10) or could learn it or outsource it easily (1)? Note if you can’t fix it then the idea can’t be worked on. I would love to invent teleport technology to remove cars and commutes, but I don’t have the ability to break the laws of physics.
Do you have a passion to fix this problem? Do you eat, sleep, and breathe this solution (10) or could you care less (1)? Note if you aren’t at least a 5 (probably a 7) pass on the idea or get more excited.
Now add all the columns and go try the one that has the highest number. If none are over 20 then do more research on problems and ideas to fix them.
Wow, you read a lot to get here. Can you do me a favor, please? Can you leave a comment if this was helpful to you or if I missed something? Alternatively, it would help me out a lot if you shared this content with those that might need to see it. Thanks, you are the best!
About Dwight Scull
I have been married to my wonderful wife, Rebecca, who puts up with me since 1999. I am a proud father to my Gen Z, son, and daughter-in-law. Grandfather to my favorite granddaughter who was born in 2021.
I lost my mom, father-in-law, and 12 others in 2013 and was DEEPLY in debt. I started reading and watching all the financial info I could find.
I chipped away at my debt and went from a negative $105k net worth having one home paid off, no credit card debt, and saving/investing 45%+ of my gross salary.
I used these daily habits to lose 100 pounds and keep it off.
I believe that you can overcome any challenge you face if you just take small daily actions and be consistent with them. It is how you will be financially successful.
Join my free Facebook group to get a ton of free resources to help you get out of debt, learn how to invest your money and work toward having the option of retiring early.