In this 2015 interview, host Kim talks with Mike Michalowicz, author of Profit First, about five practical financial habits that can help aspiring entrepreneurs succeed. Michalowicz advises starting small while still employed, using platforms like Uber or eBay to test a business idea before quitting a full‑time job. He discusses funding options, noting the rise of crowdsourcing and loan aggregators but emphasizing the benefits of self‑funding to avoid overspending with other people’s money. The conversation highlights the biggest misconception—pursuing a passion without a market—and stresses the need for consumer demand. Michalowicz cites Sara Blakely’s Spanx as a model of conservative, tool‑driven growth, mentioning products like Xero accounting software that let founders focus on their core product. The interview wraps up with a promise to share more resources on the show’s website.
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Starting a business is still very much a part of the American dream, and being your own boss can be as simple as just changing some financial habits, says an expert like Mike Michalowicz, who is the author of Profit First. He's joining us live this morning, and Mike, you have 5 easy-to-follow habits that will help anyone who wants to make their entrepreneurial ambitions a success. So for starters, let's just talk about the fear factor, because doesn't it sound great just to be your own boss and do something you love? But a lot of people are afraid to leave that full-time job. How do you get them over the hump?
Yeah, so it is so much fun, right, to fantasize about it, but when you actually have to do it, you gotta put your money on the table. So what I do suggest to a lot of people is dip your toe in the water. While you still have that full-time job, start up a job using established platforms like Uber or eBay, where if you wanna get into the transportation business, you can just use their platform to start driving cars. That's a good way to get started and see if you like to really be your own boss.
Mike, what about someone who really does have a specific business plan, they're organized about all this, but they do need to get a small business loan? It seemed like in the news business we heard for years following the recession that banks really kind of pulled in the reins and they weren't going to loan money to small businesses. Is that sort of over? Are we past that at this point in 2015?
Well, there's alternative sources, right? So there was a big excitement about crowdsourcing. You can put it out there and the community will fund you. So there's opportunities there. There's other aggregators out there that instead of going to one bank, they will go out on your behalf and find money for you. But still, I'm a big fan of funding yourself because when you use OPM, which means other people's money, it's easy to spend and get yourself in a deep hole. If you fund it on your own, you'll be much more conservative and usually a lot more prudent.
And also, Mike, what is the biggest fallacy? What's the biggest misconception when it comes to starting your own business?
Well, the biggest misconception is to do it for your passion. I'm excited, I want to do this. And inevitably, people are doing hobbies, but there's no consumer base for it. So you want to get into a business where there's consumers that demand what you do and you love doing it. It's a combination of the two.
And let's just remember that Sara Blakely, who started Spanx in her kitchen, now is the head of a multi-billion-dollar business. So it can be done.
Oh, it absolutely can be done. But now think about it. She started very conservatively out of her kitchen. She used tools and products that were out there to help her facilitate her business. Products like Xero, which is an accounting system that's already taken care of for her, other products. So all she had to do was make her simple spandex product and do that one thing over and over again and scale to the point where it could become a bigger business.
Mike, you truly are an expert and now the only man I know who actually knows the genesis and the history of Spanx. Thank you.
Well, I know Sara personally, so—
Oh yeah, okay, so you're well acquainted then. Mike, thanks so much. We're gonna put a ton more information that you have with starting up your own business on our website at mynews3.com, but have a wonderful weekend, and we appreciate your time and talent this morning. Thank you.
