MBA2080 Q&A Wednesday: Do I need to quit my job to see my startup succeed?

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Hey welcome to the $100 MBA Show. Your daily business workout every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014 and today's episode is Q and A Wednesday. On Q and A Wednesdays I answer a question from one of you, one of our listeners. If you got a question you want to ask, just go ahead and email me over at Omar MBA Net. Today's question is from Frederick and Frederick asks, hey Omar, I've been running my startup for about two years. I run a YouTube agency helping YouTubers create and market their content. I have some clients but my business hasn't grown that much in the last two years and I haven't made enough to replace my income at my full time job. My question is do I need to quit my job to see my startup succeed? That makes me really uncomfortable just thinking about it, but I want to give my business a fair shake. Would love your advice, your take or any experiences that you can offer to help me navigate my own path. Thanks Omar. Love the podcast, especially Q and A Wednesdays. Thanks Fredrik for your question and for the compliment. You keep listening, we'll keep on delivering episodes. Frederick's question is probably one of the most asked questions I get asked. Many people start their businesses on the side just like I did. I side hustled for 10 years when I was a teacher and they just don't know when to let go of the rope of their job and onto the rope of their startup. Well in today's episode I'm going to give you some questions to answer to be able to come up with that decision. I'm going to give you some options so that when you are taking that leap, you're not really taking a huge risk. You don't feel overwhelmed, you don't feel like what Frederick expressed, a bit of fear and anxiety. Also, is taking that leap really going to help the business? Is quitting your job really going to help you take the business to that next financial level? Going to get into all that and more in today's episode. So let's get into it. Let's get down to business.

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Like I mentioned at the top of the episode, I side hustled for over 10 years building businesses on the side. While I was a full time educator, full time teacher at the high school and university level, I would spend my evenings, my weekends, my holidays working on my side businesses. And eventually I did make the leap to full time entrepreneurship. I did a few things to prepare myself and I'm going to give you some things to think about and some questions to answer so that you can know if you're ready to do it it or there are some things you need to have in order before you take that leap. The first thing I want to mention is your type of business actually does matter. So in Frederick's example, he runs a services agency, right? He helps people grow their YouTube channels, put them together, put the content together. I'm going to guess that Frederick does a lot of the work and puts in most of the time to pull off the service. So this is a time bound type of business, meaning the more time he puts in, the more money he can make. And the more money he can make will allow him to take the next leap where he can hire people to do the work for him. But I'm here to tell Frederick you don't actually have to wait to see your business grow. You might think you need to do the work you need to systemize your agency and the tasks that need to get done. Why? Because you got to start putting on your CEO hat and not your worker bee hat where you have to actually implement the work, the creative work to fulfill the service for your clients. And this is what I would challenge anybody who's in the services as their startup to do. Take one client, one project and do the following. Don't do the work. If you were in hospital, if you were incapable of doing the work, but you have a client you can't say no to, you have a client that you're already committed to fulfilling the work, what would you do? Most likely you'd hire somebody to do it for you, right? You would outsource it. So what I want you to do is I want you to gain some client work with the understanding that you're not going to do the work, somebody else is going to do the work, you're going to hire out for it. Even if it's just a freelancer that's going to fulfill the duties, and even if you are just the person that does the communication and delivers the work and works with the client, but the actual work gets it done by somebody else, you're going to start seeing the potential of scaling your business because obviously you're going to hire somebody who is going to do it for less than what you charge so that you can make a profit. Let's say, for example, you have a client and you charge $2,000 a month. Even if you get a freelancer to do the work that they have to do in the month for 1500 and you make a profit of 500, you now have a scalable system. Every time you want to bring on a new client, you don't have to do the work. You're not time bound and you're not taking more of your time or needing to quit your job to make happen. Now, the beauty of this is that when you scale, you actually lower your expenses. So that person that you hired to do one project, you probably could do two or three for a lower price per project or per client. So you're going to be making more profit per client. So I would first experiment with this first. I know it's a little bit scary, something a little different than you've done before. But if your business is ever going to scale, that's what it's going to look like. You might as well try it now while you have the safety net of your job. Now, if you have a different type of business that isn't services like you sell products, you sell courses, you sell software. You still need time to implement the growth strategies. You need to make the sales, to run the webinars, to do the work, to get your business to the point where it replaces your income, right? There might be a gap between where you are now and where you need to be to quit your job financially. So it might be a few thousand dollars, it might Be more. But the important thing for you to do is, is to know what that gap is. What is the actual dollars and cents? What's that number? Is it 2,500? Is it $1,000? Is it $5,000? That number is very important because it's your golden number. So you need to get to that number as fast as possible. How can you get to that number? Well, you can do what I did, which is the fastest way to get to that number, wherever that number is. And that is just to lower your expenses. I'm talking about your personal expenses. When I went into full time entrepreneurship, I. I downsized my life tremendously. I didn't have a car, I had a one bedroom apartment in a city. I didn't take any vacations. All my fun activities, all my entertainment was basically free. Whether it was exercise or seeing free shows or movies or game nights. I just put myself on a financial diet. Basically, now that the paycheck wasn't coming in, I gave myself a Runway even beforehand so that I can pay for that new lifestyle for as long as possible. That allowed me to get to that number, to shore up that number very easily. Now, you might want to do a combination of things or you might want to just go full out, lower your expenses as much as possible. You can lower your expenses a bit and try to earn a bit more so that you can get to that number. But that number is your goal. Now a little bit about lowering your expenses, changing your lifestyle. I know a lot of people are probably thinking, omar, I can't do that. It's so hard for me to think about this or even discuss this with my family. I can't just downsize my life. Everybody around me, my family, I totally get it. But one thing I want to just communicate to you is that this is temporary, this downsizing, this changing of lifestyle is not a temporary thing. It's probably only for a year or two. And think about it, a year or two flies by, okay. The other thing is that most of the things you're going to be giving up, you're not going to really miss. And that's just the reality of it. I can tell you from experience, I didn't miss my car, I didn't miss the fancy vacations. I didn't really miss any of that stuff because I was having too much fun building my business. I was in love with it. I was on top of the world because I got to do what I wanted to do. I finally was a full time entrepreneur. Yes. If you are not single, if you are married, if you have kids, you have family, you have other people in your household, you're going to have to have a talk with them. You're going to have to sell them on this idea and say, hey, this is temporary and you don't have to go as drastic as I did. You can literally just try to lower your regular bills, your regular expenses. One of the easiest ways to do this is if you're leasing cars or you're financing cars, is to trade them in and just to buy a used car or see if you can have only one car. If you have more than one car in your family, see if you can work from home, build your startup from home. A lot of people, they do that, they'll save a few hundred or even a thousand dollars a month. It's the regular expenses that make it hard to hit that number. And that's really where you want to cut out the regular bills. Now let's put all the finance stuff aside and let's talk about the actual startup that you're working on on the side. You want to give yourself as much of an opportunity for your business to succeed while you're still in your job. You want to see how good it can get, how successful you could be if you give it all you got. And what I mean by all you got is you need to focus. I'm serious, guys. Here comes some tough love. Because most of us are not focused on that side hustle. We're not actually working when we say we're working on all those hours on our business. You need to cut out the distractions, the social media, the research you're doing. You actually need to build and create and sell and actually get customers. This is what you need. Money is the lifeblood of a business. You need to be hungry for new leads and new sales every time you go to work on your business. If this means going to a co working space or having a special room in your house so that you have a door to close and you're just distraction free, that means putting your notifications off or do not disturb mode, do it. You need to spend quality time on your business. So if you're working on your business after work or on the weekends or on holidays, it needs to be super concentrated. And I got to tell you, when I did that with my own side hustles, that's when I got results. When I was just laser focused, I didn't allow anything to distract me where I actually did two hours straight of work deep. I plowed through my to do lists. I was just relentless. I said no. When people said, hey, let's go have some fun, let's go out to eat, let's have a coffee, I said, no, no, no. I was on a no train, right? I just said no to everybody because I got work to do. I got a mission. I could say yes to you. Once I'm out of this rut, once I'm full time entrepreneur, once I'm, you know, doing well with my business, you got to give it your all. And most people that actually accomplish this find that they can take their side, hustle to that level that replaces their income and comfortably quit their job. I got more on today's topic. But before that, let me give love to today's sponsor.

We've all been there. You hold onto a coupon, hoping to cash it in at the store, but then you forget about it and suddenly you've got a mountain of useless expired coupons.

Do you think this one's still good? Free milk.

Oh, mate, that expired in 1993.

Dang it.

Fortunately, there are better ways to save money. Like by switching to Geico, you could save about $900 on car insurance without ever touching a coupon.

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Now you should try a bit of spring cleaning.

It feels good to save big. It feels good to Geico.

To wrap today's lesson. Quitting your job is scary. You know, it's steady income. Kevin O', Leary, you know, Mr. Wonderful on Shark Tank, he has a famous quote that says the two most addictive drugs out there is cocaine and a steady paycheck. And he says that tongue in cheek. But it's true. It's very addictive. And it's very, very hard to say no to a steady paycheck because it comes in every month and it helps you pay your bills every month. So you need to create your own steady paycheck with your side hustle so you're not relying on your job and it's just gravy and a way for you to give yourself a little bit of a buffer before you quit it. Know your number, focus. Give yourself enough time during the week, during the month, during the weekends to actually work on your business. Start thinking like an entrepreneur, like a CEO. Start outsourcing things, even if it's at minimal profit, just so that you can scale. Thanks so much for listening and thank you, Frederick, for asking today's question. If you got a question you want to ask, just go ahead and email me over at Omar MBA Net. I'LL make sure to answer it right here on the podcast. Speaking of the podcast, right now, I need you to do something. Make sure you hit subscribe or follow on the podcast app you're using right now to listen to this show. By doing so, you get access to over 2,000 episodes in our archives. It also allows you to make sure that you don't miss an episode. It's also the best way you could support the show by telling the podcast app, hey, this show is pretty good. I'm following it. And if you have a minute sometime today, share it with your friends and family on social Let us spread the word about the 100 MBA show. Thanks so much in advance for doing that. Before I go, I want to leave you with this. Leaving your job and becoming a full time entrepreneur is not a small deal. It's a total lifestyle change. Your life is going to change majorly. Okay? So it's good that you're easing into it with a side hustle to have one foot on each side. But understand, prepare yourself mentally. When you do take that leap, things will change for you. You will be fully responsible for your own financial success, for your own financial well being. You got to get comfortable being uncomfortable. You got to be comfortable with knowing that, hey, no one's going to rescue you other than yourself. That might sound scary, but every entrepreneur has to go through that mental shift in their journey to success. Thanks so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care.

We've all been there. You hold on to a coupon, hoping to cash it in at the store. But then you forget about it and suddenly you've got a mountain of useless expired coupons.

Do you think this one's still good? Free milk?

Oh mate, that expired in 1993.

Dang it.

Fortunately, there are better ways to save money. Like by switching to Geico. You could save about $900 on car insurance without ever touching a coupon.

Ooh, how about this one? Half off floppy disks.

Now you should try a bit of spring cleaning.

It feels good to save big. It feels good to Geico.