I know what it’s like to watch with bated breath when someone leaves the safety of their job and follows their dream. It looks shiny on the outside, but what’s it really like on the inside? This article is not about courage — you can read more about how I mustered up the guts to leave my job at Google and go out on my own as an author, speaker and coach here. This is about what happens when the process of becoming an entrepreneur shifts from the adrenaline of taking a great leap to actually balancing the bank account — or failing miserably at it. Going from a steady (very healthy) paycheck to….total uncertainty…was a major adjustment. I broke even in July and felt great — I was off to the races! But things didn’t fare so well in August.
One night I went to bed with a knot in my stomach about how I’d pay my credit card bills. The next day, in one hour, I had sold $5K of business. The next week, it was gone — and the tough-break tsnumai took another $2K speaking gig with it. Then, to add insult to injury, I got a bill in the mail from COBRA for $2K that I owed retroactively so as not have a lapse in coverage while I moved to NYC and found new health insurance.
I was deep in the hole and didn’t see a way out without dipping into my savings, which was a huge disappointment for me. If I get in the habit of dipping from my savings I won’t have anything left; as far as my fears are concerned, it’s a slippery slope toward living in a van down by the river!
The August income roller coaster was intense, but I’m glad it happened; it taught me several critical lessons:
- Take deep breaths, stay calm and take care of yourself. Eat well, exercise and make sure you are taking care of your mind and body. You’ll need every ounce of creativity and awareness to get out of a financial pickle and get your business back on track.
- NEVER count (or spend!) your chickens before they’ve hatched. It’s ridiculously easy to do, and it is definitely not fun to dig out of. Desperation isn’t attractive when dating or selling.
- Borrow money from your savings as a loan, not a gift. I transferred money from my long-term savings which made me nervous — so I wrote myself an IOU for $4K. I *will* pay that money back to my savings account, just as if I had taken a loan from a bank or family member.
- Plan ahead for building months (as opposed to doing months). A big part of the reason I was “in the red” on expenses to income in August was because I’d been building out my own coaching course to help people go after their biggest goals (that will hopefully be a more stable source of revenue). If you know you’ve got a building month coming up, ask yourself if it’s okay to dip into savings, or whether you need to split your time between building and immediate sales-generating activity.
- Building “entrepreneurial resilience” is like building a muscle; it takes practice. This is something my good friend Alex Budak and I have discussed at length. Alex is an awesome guy who recently left his corporate gig to launch Start Some Good, which facilitates Kickstarter-style funding for social entrepreneurs. In Alex’s words:“Especially as a first-time entrepreneur, the roller coaster that is starting one’s own business is intense. The highs feel incredibly high, and the lows feel incredibly low. First, recognize that this is normal and to be expected. Second, and equally crucial: surround yourself with fellow entrepreneurs. It’s amazing how easy it is, when isolated, to think that you’re the only person going through these ups and downs, but as soon as you share your struggles with others, you realize just how similar many of the issues are.”
- Stay grounded in your long-term vision. All businesses have start-up costs and building months; these are fine as long as you are working toward a broader vision for long-term sustainability and have some tangible goals to get you there. Developing semi-passive income streams takes time, and there’s nothing passive about the process. You’ve got to get comfortable (or as close to comfortable as you can) riding the income uncertainty wave without worrying yourself sick.
As a solopreneur, especially in the beginning, you’ve got to get comfortable not knowing exactly where every dollar will come from and when. Despite the income roller-coaster and uncertainty that comes with it, I don’t regret my decision to leave Google for one second. These challenges are teaching me critical lessons about entrepreneurship and they motivate me to be even more strategic about how I run my business moving forward.
For more lessons I’ve learned in my first two months on my own, check out:
- 20 Lessons from 2 Months of Solopreneurship (Part One)
- 20 Lessons from 2 Months of Solopreneurship (Part Two)
- Free Agent Part Two: On Big Decisions and Very Real Fears