Tom: The following is a guest post by Tom Morkes – an author, publisher and all around instigator. He’s a West Point grad, Iraq War veteran, and for a while he even got paid to jump out of helicopters. He’s also an incredibly nice guy, which always helps! Check out his newest publication: Bootstrapped – a business and arts journal for disruptive innovators.
The path is uncertain but the goal is clear. There’s no one to say go but myself…
I make a break for it.
In my mind, I feel like Dantes escaping the Château d’If?
In reality, it’s a standard Monday morning in Tennessee. Except today I’m signing my resignation and leaving my job for good. After 5 long years, the time has come.
I am free…
It’s been 10 months now since I left my job to pursue self-employment and the opportunity to build my own business from scratch.
In those 10 months, I’ve failed…a lot. But I’ve also had some wins: I’ve written several books, founded an artisanal publishing company, started consulting with startups and nonprofits on Pay What You Want and gift-based pricing, and co-founded the first-ever heart-centered business incubator program called The Flight Formula.
Along the way, I’ve learned quite a bit about what it means to build something from the ground up with your own hands, to suffer the ups and downs of self-employment, and to deal with the setbacks, failures and false summits of entrepreneurship that are inevitable (yes, they are inevitable – and that’s something you have to deal with).
In the following sections, I want to share with you some hard-fought lessons-learned from my transition to self-employment and entrepreneurship – stuff that is important no matter what kind of company, nonprofit, or movement you want to start.
Nothing about what I’ve done has been conventional, nor is my path for everyone, but I hope these lessons resonate with those of you on your own path toward financial freedom and a life lived – as my good friend Jonathan Mead, author of Paid to Exist, would say – on your own terms.
Let’s get to it.
Step 1: Start with a Side-Hustle
Before you quit your job, make sure you can make money doing something else.
Yeah, it’s well-worn advice…but for good reason:
If you can’t make money from your products or services while you have full-time job and consistent income – a massive safety net – how can you hope to do it with no safety net, when the pressure is high and the impact of failure very real?
Here’s a myth: if I have more time to devote to what I love doing, it’ll work out.
It’s true – more time can give you greater flexibility and focus, but if you can’t sell whatever it is you’re creating in your spare time, you probably won’t be able to sell it no matter how many hours you get. To think otherwise is wishful (and deadly) thinking.
Side-hustling is all about making the best use of your spare time (nights and weekends) to get your business off the ground with limited downside. When you have a full-time job, you have the advantage of being able to experiment and test things that could fail. This is the fastest way to learn, grow, and improve.
The bonus to side-hustling and working while having a safety-net: it’s the fastest way to build remarkable products that create an impact.
A great example of side-hustling is Ruben Gamez of Bidsketch.com. I interviewed Ruben for Bootstrapped (a business and arts journal for disruptive innovators) about a month ago to talk about his experience starting from scratch. Ruben built a 6-figure business within a year while he still had a full-time job.
His plan was simple: he wasn’t going to leave his job until he had replaced his full-time income with his side-hustle income.
In Ruben’s case, he was able to do this in a year.
For the rest of us, it might take a bit longer.
I didn’t replace my income before I jumped. I don’t necessarily recommend that to others, but in my case, I had validated that I could sell my writing in a small way, and I was confident in my ability to scale this early success into sustainable income. I also made a concerted effort to minimize my expenses while maintaining a personally satisfying standard of living (I live frugally but still drink espresso and craft beer).
Fast forward 10 months and while I haven’t created a 6-figure business (just yet), I’ve managed to grow my monthly income to a point where it more than covers expenses as I travel around the world. It’s not a lifestyle for everyone, but it’s what I wanted, so I made sure I could make it happen by side-hustling before I made the leap.
Starting with a validated, side-hustle business is essential, but you’ll need a little more leverage before you leave work behind for good…
Step 2: Build Your Financial Cache
In the military, a cache is hidden stockpile of food, water, weapons, and ammo (or some variation of this).
The goal of a cache is to provide the user (oftentimes an insurgent or covert / clandestine operator) with enough supplies to keep them in the fight.
Before you make the transition from employee to self-employed, it behooves you to build yourself a personal financial cache – something that will keep you in the entrepreneurial fight, even if things don’t pan out how you want (they often won’t, at least at first).
A solid financial cache includes excess money accounts (if you’re like me, multiple savings and checking accounts are a great way to help hide money from yourself), investments (ideally cash-flow investments), and hard assets (for worst case scenarios).
Savings 101
If you’re looking to make a break from the cubicle, a backup pile of money (savings) is essential.
Every product has a lifecycle. The question is: what happens when sales of your premier product stagnates or die off? How long can you sustain yourself before you’ll be forced to make a choice you don’t want to make (like go back to your day job)?
Many people who’ve made the transition from employee to self-employed recommend having 2 – 6 months of your current monthly salary tucked away for safe keeping. The premise is simple: no matter what happens, you’ll be floated for several months with no shock to your current standard of living. This eases the transition and gives you flexibility if you run through some rough patches in your journey.
Create Multiple Streams of Passive Income
Saving is good, and it may be all you need.
But if you want to increase your chances of success, it helps to have additional side-income coming in from alternative sources. In other words: cash-flowing investments.
Passive income doesn’t exist in business (at least not how conventional online business people talk about it), but it does exist in the investing world. Whether you’re investing in dividend stocks or, even better, high-margin, cash-flowing investment real estate, the money you earn every month can help float your current expenses when you make the transition.
In the first few months when I wasn’t making enough sales to cover expenses, the additional income generated from investments helped float me. It’s not a situation you want to rely on, but it helps when it’s there.
As a worst case scenario, it also helps to own hard assets (property, land, gold, etc.). No, you don’t want to sell this stuff if you don’t have to, but it helps to own assets that have real, intrinsic value, not just for worst-case backup plans, but in case your business expands rapidly and you don’t want to defer to outside investors to help with growth and expansion (in other words: if you want to stay abootstrapper).
Not an investor and don’t have any extra properties?
You don’t have to be. Just get clever.
Have an extra car? Why not rent it out using getaround.com or relayrides.com? Have a spare bedroom or two? Make your house a bread and breakfast using vrbo.com or airbnb.com.
The sharing economy is helping side-hustlers create additional income in creative new ways, so get on the gravy train already.
Of course, the best financial cache can’t make you succeed.
That begins and ends with personal commitment…
Step 3: Go All In
In the 1500s, Cortez landed on the beaches of America, prepared for combat.
Knowing that he and his men would be going up against insurmountable odds (the enemy outnumbered them more than 100 to 1), he ordered his men to do something crazy: destroy the ships.
Cortez knew the only way he’d win is if every man committed to the fight as if their lives depended on it. This meant no possibility of retreat or escape.
In the case of Cortez and his men, it really was a life or death situation.
For you and your business, it’s not life and death – but we can still leverage the powerful psychology of fully committing to our objective before we start (and we don’t even have to destroy the backup plan, either).
Some ways to do this:
1. Make your commitment public.
Public commitments are more likely to come true. Quitting is pretty public, so that does the trick.
2. Write down your goals for the next 6–12 months and sign it.
Hand writing and signing your name to something increase ownership over the topic, making it tangible and actionable. We begin to act in accordance with what we write down, which helps us manifest our original goals. Read: Influence by Dr. Cialdini for more on this topic.
3. Have an escape plan, but make it embarrassing.
We humans hate humiliation and will do everything in our power to avoid it. Often this has a negative effect, like keeping us from starting a new project for fear of failure. So why not leverage natural psychology in your favor? In the same way making a public commitment helps us keep promises to ourselves, making our escape plan tough to reach or embarrassing will light an extra fire under us to put in the extra hustle we need to succeed.
For me: I have a backup, joint savings account with a good friend. In a worst case scenario, I know the money’s there…but I sure as hell don’t want to ask to use it. Maybe not for everyone, but for me it works.
Amateur Versus Professional
There’s a striking difference between the amateur and the professional, and it goes beyond quality of work.
The professional shows up, committed, with the boat destroyed (it’s make or break every day). The amateur half-steps, takes his time, and never truly enters the arena.
It’s hard to point out everything the professional does that the amateur doesn’t, but an unconquerable level of commitment is certainly number one.
The pro commits and acts the part; the amateur never fully leans in.
Once you’ve embraced this concept, that you need to become a pro if you want to succeed as an entrepreneur, the next step is applying pro strategy to your work…
Step 4: Sell / Create / Ship / Improve
Those who haven’t read a business book or blog in the past ten years, may view business, writing, art, etc. as a simple process:
Build –> market –> sell –> repeat.
For many entrenched businesses, this process is still the same…although many of those businesses are going out of business – fast (e.g. big book publishing houses, and conventional media companies are getting destroyed by innovative disrupters with lower overhead and less to lose).
Why?
Because this process means you need to hit home runs over and over again to survive.
But what if there was a better way?
What if you could stop wasting time building something no one wanted and spend more time creating stuff people have already ordered and put money in your pocket for?
This isn’t a crazy theory – it’s a practical framework that’s been used by hundreds of companies to sell products and services for years. The principles and strategies have been established in great detail in books like The Innovator’s Solution and The Lean Startup.
In a nutshell, a lean business progressively builds and validates a product as they go, creating just the minimum necessary to get purchases (or whatever the conversion objective is), which furthers development, expansion, and more sales. Applied properly, this process means it’s possible to get sales before you build the entire product. Taken to its edge, you can sell on proof-of-concept alone – That is to say: it’s entirely possible to sell an idea before you ever start building.
Using this strategy, I was able to make over $1,000 in preorders for a brand new, donation-based, semi-annual business and arts journal called The Creative Entrepreneur (which we recently rebranded to: Bootstrapped). This journal was a collaborative effort of artists and entrepreneurs from around the world, and because of this, it took months to create. The last thing I wanted to do was waste my time and the time of my authors, artists, editors and designers building something no one cared about.
By selling the idea before we created the journal, we managed to mitigate the greatest risk to new entrepreneurial endeavors: will the product sell?
More recently, I used the same strategies to launch an in-person business incubator program in Asheville, NC. We ended up raising $41,000 in commitments before we ever built any of it. You can read the exact steps I took to do this here.
And right now I’m working on another lean launch for a U.S. veteran’s transition training and membership site. We plan to launch in the exact same way: by selling on proof of concept alone and then building the product to ship to market. If we don’t get enough funds to finance the development of the program, we can ditch it without wasting any more time or money, or we can make a pivot and try launching again (same rules apply).
The point is, it’s entirely possible in the world we live in today to fund your ideas before you spend months or years building them. So why use any other strategy?
Step 5: Never Stop Shipping
At the end of the day, I’ve created a lot of stuff, from books to websites to podcasts and beyond. Many of the things I’ve worked on have failed.
I’ve spent weeks writing guides only to see nothing sell. I’ve spent months building websites that ended up going nowhere. Yet each failure is a lesson learned. Maybe more importantly, through the constant process of shipping, some of what I’ve created has done marginally well. And a few things have done incredibly well.
This is the nature of entrepreneurship: most things probably won’t work or at least not work well enough to continue producing…
But the big wins make up for everything else.
As long as you keep shipping, you increase your chances of creating a breakout success. The things that don’t work? Let them go. The things that do marginally well? Let them go too. No entrepreneurs have found success by doggedly promoting a product or service no one cares about.
But the things that work? Leverage the hell out of them. Build additional products in and around what you’ve created.
And before those successes ever dry up (nothing sells forever), keep creating and keep shipping new products and services every day (using the same technique as above).
So my recommendation: never stop shipping.
Time to Leave Work Behind
The self-employed or business owner lifestyle isn’t for everyone.
But for those who read Tom’s blog here at LeavingWorkBehind.com, I have a pretty good feeling it might be for you.
I really hope these steps, strategies, and techniques help you along your journey – or at least give you the confidence that you don’t have to be great at everything to build your own business from scratch. All you have to do is:
- Start with a Side-Hustle
- Build Your Financial Cache
- Go All In
- Sell > Create > Ship > Improve
- Never Stop Shipping
Simple, but not easy.
If you need some extra education and motivation, I encourage you to check out our brand new, issue 2 of Bootstrapped – a business and arts journal for disruptive innovators. The theme for this issue is “Starting from Scratch” – a topic that will certainly help those of you just starting out on your entrepreneurial journeys (and those of you already on your way, but could use some cutting edge strategy and motivation to take your product or service to the next level).
Thanks for reading, and if you have any questions or want to connect, leave a comment below – I promise to answer every single one.
Good luck and keep creating.