Small Biz 101 Series. Earn Cash All Around The Clock!

What’s this all about?

Welcome to the first installment of my Small Biz 101 series. I’m aiming to offer some useful hints based on my experience starting Carson Systems, our small web-based company.

Is starting a company the right thing for you?

Starting your own company is amazing. The freedom it offers is something you just can’t have when working for someone else - no matter how high on the ladder you are. So why doesn’t everyone bail out of their 9-to-5 and head for the green pastures of self-employment?

The answer is simple: it isn’t right for everyone. It has nothing to do with skill-level, and has everything to do with personality and your current situation. In my opinion, here’s how it breaks down:

Personality traits you need:

1. Self motivation - No one is going to tell you what you should or shouldn’t be doing. Whether your succeed or fail is pretty much up to you (and a bit of luck).

2. Open to risk - There’s no guarantee that your company will succeed. Would you be able to recover emotionally, if it fails?

3. Strong work ethic - There are some periods where you’ll be working 18 hour days.* Can you do it? Do you want to?

4. Driven - When things go wrong, are you strong-willed enough to push on? You’ve got to be fanatical about what you’re doing. If you don’t believe in what your doing, why will customers?

5. Organisation - You’ll get busy really fast. I’d recommend picking up a copy of David Allen’s Getting Things Done.

6. Humility - There are plenty of wise people out there who you can learn from. I freely admit that I don’t know it all, which is why I read so many blogs (up to about 100 now). Free advice from wise people - what could be better?

Ideal circumstances:

1. Clean slate. If you’ve already maxed out your credit card, it’s best to wait until you’ve paid it off.
Please keep in mind that there are always exceptions to these rules. However, in my experience, they’re a good indicator of if you’re the type of person, with the right circumstances, to start your own company.

2. What will be your USP? Financially stable - If you’re the sole bread-winner of the family, you need to be very careful about giving up the security of your day job.

Debt free - You might incur a bit of debt in the early days. It’s best to start with a

So you’ve decided that starting your own company is the way forward. Great! Now what?

The first thing you need to decide is this: What is your unique selling point? What are you going to offer to the world that doesn’t already exists? The problem is that a lot of people I’ve met believe that simply starting their company is enough. Clients will come to them, because, we’ll … they just will. Right?

Wrong. You’ve got to fill a gap that isn’t currently being filled. With Carson Workshops, we noticed that there wasn’t any high-end training for web professionals. There were a million training courses out there, but they weren’t taught by the best of the best. With DropSend, we noticed that it was really hard to send large files to people. Stupid problem, but there weren’t many easy-to-use solutions out there.

I think the best way to discover your USP, is to think about what you would really like. If you find an area in your professional or private life that is being overlooked by the business world, you might be able to meet that need.

Quite a few of you will be from the web industry. As we all know, there are thousands of web shops out there. What will make you different?

How to prepare

Now that you’ve nailed down your unique selling point, how to do you get started?

The first thing to do is start saving. I’d recommend at least 2 months of salary, in the bank. So if you earn $2,000 per month (take home), then you should have $4,000 in the bank. Some people say 3 months, but in my experience, this just takes too long and is unrealistic.

The crappy thing about this is that it takes time. The way I managed to save the necessary cash was to do freelance web development during nights and weekends. It sucked, but it was what had to be done.

The reason why this is so important is because you won’t have paying customers the second you leave your job. It might take you up to 2 months to get money through the door. (This leads on to the subject of cash flow, which I’ll discuss in another article.)

The 5 most important words you’ll ever learn

My dad drilled this into me, and it is the #1 reason why we’re profitable today:

What’s in it for them?

Whenever you do anything in business, put yourself in your customers shoes and ask this question. It will save you from wasting time on ideas that don’t have any financial viability.

For instance, if you’re launching a new site, ask yourself "Why will people come here, instead of my competitor’s site?". If you’re launching a new web app, ask yourself "Why will people want to use this, instead of the tools they already have?". The key is to be brutally honest - because your potential customers will.

Next time …

In the next installment of Small Biz 101, I’m going to cover the subject of cash flow. It’ll make you, or it’ll break you - so it’s worth covering in detail. I’ll show you how to set up a handy Excel spreadsheet that will allow you to see problems coming, and plan accordingly.
If you’ve learned anything valuable, or disagree with my opinions, please comment below. See you next time.

* I’m not advocating being a workaholic. In fact, since Gill (my wife) and I started Carson Systems, we’ve made a conscious effort to work less. We start at 9:00 every morning, and finish at 6:00. We also take a 1/2 day on Friday and Wednesday.

You’ll find that the freedom to dictate your schedule is one of the best things about starting your own company. The flip side of this amazing freedom is that every once in awhile, you have to work seven days a week, 18 hours a day.