I’m currently in the early stages of (hopefully) purchasing an investment property. As a sat across the table from my mortgage advisor, I was told that my 2017 tax returns would be a major factor in whether I qualify to take on the financial burden of yet another mortgage.
Because I’m self-employed, lenders are a bit more cautious to loan me money. While sitting across the table from her, I reflected on my entrepreneurial journey. Perhaps some of you would like to work for yourself one day. We sometimes daydream about all the amazing wonders of self-employment. Nowadays, the dream of becoming an entrepreneur is heavily glamourized. But we should also discuss some of the realities of this type of lifestyle.
YOUR SECURITY BLANKET IS GONE
The first milestone that you’ll experience once leaving your job is that first Friday that passes with no direct deposit. I’ll never forget that feeling of logging into my checking account on paycheck Friday and realizing that I’d be responsible for generating my income from now on.
If at all possible, I recommend that you save around one year of expenses before taking your big leap. I saved by setting up automatic drafts into a specified savings account. This means less disposable income leading up to the decision. I didn’t care. Too me, freedom was more important than having a lot of disposable income. I also believed that eventually, my income would recover.
Once I got past the shock of not getting paid, I had to overcome the next obstacle…..making money.
My plan of action was simple.
Mimic the actions of others who were making money in a similar way. Basically, I learned from others who had online e-commerce stores. Here’s what I realized. My actions when I still had a full-time job were very different once that paycheck was gone. When we still have a security (financial) blanket, we limit ourselves dramatically. We think small and do the absolute minimum. But when our livelihood depends on our success, our actions shift. If they don’t, then we’ll find ourselves back on the job market.
You can no longer take these tiny little baby steps that you’re used to. Your side hustle must now pay the bills. I found it necessary to take more risks and focus on actions that had a greater impact on the bottom line. If you can take on this mindset before you quit your job, you save yourself a lot of heartaches.
YOUR BUSINESS MAY NOT PERFORM
Another thing you’ll have to deal with as an entrepreneur is when your business doesn’t make money or when sales dip dramatically. I’ve had times when sales suddenly decline out of nowhere. I wasn’t sure what caused it and if sales would ever come back. Now, that I’ve entered my 3rd year of working for myself, I realize that this is part of a cycle. Whenever I want to boost revenue, I do two things:
- Shift my mindset to focus on creating the outcome I want.
- I take a lot of action. I do everything I can think of to turn things around.