After graduating college in 2013, my main goal was to land a well-paid job where I could put my skills into practice and start building a thriving, lucrative career.
Everything from the enthusiasm of a fresh graduate, to the excitement to jump into the “real” work world all fueled my desire to take up a nine-to-five engineering job.
At first, I was excited about landing a “real job” and the security that came with regular income but that wasn’t to last long.
From the boredom that came with repetitive, boring tasks, to being answerable to a boss and sitting too much, I felt trapped. I needed to escape the 9-5 trap and try something else; what that was I hadn’t decided on yet.
The anxiety that came with the thought of leaving my “real job” was overwhelming. The sudden loss of monthly income, the uncertainty of my next venture, and the risks surrounding entrepreneurship all scared me.
Nevertheless, I made up my mind to quit my job in 2016.
When I left the job, all I knew is that I wanted to set up my own business. The first challenge I encountered was getting more capital for the business. Since I was out of employment, not many financial institutions were willing to lend me money to put into my startup, so I needed to make do with what I had.
With the $10,000 I had saved over the previous 4 years, I decided to start a cleaning company as the startup costs in the service industry are very low and you get a return on your investment almost immediately. Had I been able to get a loan to start a larger company it would have been riskier. So in the end it worked out very well. My cleaning company was set up for <$1000 all from my laptop. So even if it failed, my loss wouldn’t have been unbearable.
It took my cleaning company, DeluxeMaid, the whole of 2016 to make a profit.
Some businesses can take up to 2 years before they break even. To ensure your new company thrives during the first few years, you must reinvest any money you make on marketing and this makes taking any wage difficult. I started taking a small wage after about a year but this was about 1/3 of my previous salary.
Generally, you should anticipate many challenges and disappointments when transitioning from an office job to owning a company. When I was getting started, I had to deal with these challenges head-on by embracing digital marketing techniques and addressing one task at a time to avoid feeling overwhelmed.
A Business Plan is Essential
When you’re starting a new company, you will need a business plan to help guide your decisions. Before laying out concrete plans for my cleaning company, I conducted comprehensive market research and developed a detailed business plan to help inform my decisions.
Have an Emergency Fund
Another strategy that helped my cleaning company survive the turbulent first year, was having an emergency fund.
If you’re leaving your 9-5 job to start a company, an emergency fund will help you pay for your living expenses and other unexpected business expenses before your business starts making some money. I knew the first year in business would come with unexpected expenses and I opened a separate, dedicated savings account.
In addition to having an emergency fund, I had to find ways to reduce my daily expenses so that I could put more money towards growing the business.
Some of the measures I took to increase my savings included canceling all unnecessary memberships and subscriptions, going out less often, and cutting out the coffee/ takeaways.
Perfect Spreading the Word
As a new company, you may not have a huge marketing budget but you can leverage cost-effective ways to reach customers. To spread the word, I created compelling social profiles for my company on social media channels, set up a user-friendly website, and built a robust email list to promote my business. During this time I also learned about search engine optimization(SEO), as the long-term goal for my business was to appear high on the Google search rankings and that is where 70% of leads come from these days.
For the four years I’ve managed my company, I have learnt that prudent financial management is key to the success of a new business.
Failing to stay on top of day-to-day financial management leads to problems not just with cash flow but you also fail to recognize which marketing channels are making you the most money and which should be cut as they are not bringing a positive ROI.
First, you must properly manage your accounting to keep accurate track of your income and costs.
There are many reliable accounting software such as Wave that you can use for this purpose. And when your company is a bit larger you can hire an accountant to look at your books quarterly to ensure that everything is being done correctly. It’s important to keep track of all of your expenses so that you know where your money goes.
Managing Uncertainty of Income
As with any new business, there can be a lot of uncertainty looming on the horizon. The good thing is that there is a way to give yourself the best shot at fueling growth while managing income uncertainty. For instance, instead of creating a huge marketing budget, you can leverage social media marketing to reduce marketing costs.
From my experience, transitioning from an office job to owning a company, isn’t a glamorous process. It’s not for the faint-hearted. You’ll need to become a jack-of-all-trades and your first year won’t be easy.
Most importantly, you must be prepared to make mistakes and learn in the process. Also, keep in mind that the first year is more about surviving.
If you think you’re not ready to quit your 9 to 5 job to start your own company, you have the option to work both the office job and grow your company during weekends and evenings as a side hustle. This can be an attractive option if you also want the security of regular income.