How to launch a new business without sacrificing your lifestyle

Financial business advice

Ben Nash is a Financial Adviser and the founder of Pivot Wealth, a money management company that helps young professionals make smart money choices. Today, Ben ever-so-kindly gives us his tips on how to launch your business with the minimal amount of sacrifice.

These days it’s becoming more and more common to want to cast off the shackles of the 9-5 and launch your own business. You dream of the freedom, the flexibility and the good life where you live and work on your own terms, and quite frankly your timing couldn’t be better – there’s been a huge shift away from big corporations to small businesses, and the constant growth of technology means you can run a business from home, in your pj’s and no one would be none the wiser! Although the reward has the potential to be huge (not without hard work!), sometimes just starting, can be the hardest part.

To successfully start a business without a huge amount of stress and financial pressure, or resorting to moving back in with the parentals (love you guys), and eating nothing but ramen noodles for the next couple of years, you need to take some time to set up the financial side of things to ensure things run as smooth as possible in the initial stages and beyond. It can seem like a big undertaking but if you know the steps involved and the order to do them in, things will get so much easier.

Here, I cover the five steps you should follow to help launch your own gig… without making any huge lifestyle sacrifices:

    There are a bunch of costs, both obvious and not so obvious ones, involved in starting a business. Some are absolutely necessary and non-negotiable, like legal and business registration costs, technology set up, branding and design and website costs, and then there are some other costs that are nice-ities, like a $2000 artwork for your home office, a $100 candle to help boost your creativity and a $300 Smythson diary just in case your iPhone self-destructs, are probably not essentials at this point. But, these things, plus all the added unaccounted for extras tend to add up. So make a list of every cost you can think of, and don’t forget the ongoing costs – software, bookkeeping, accounting, and maybe ongoing legal advice or help with finance. That way, you will know what you’re in for post-launch. Be clear on these costs and the steps involved so you so you can plan for them and take the right steps at the right times. If you don’t have a background in business and haven’t done this before, consider working with a mentor or adviser who can tell you exactly what you need to do and when you need to do it.
    As much as it would be great to think you’ll start a business one day and money will start rolling in the next, it’s generally more sensible to assume no or low income from your new business for a little while. With that in mind, you will need to think about how long you want to be able to cover your personal living costs before you start drawing an income from your business. Fact: spending money is way more fun than saving it. But, how much you save dictates how quickly you’ll have enough money to quit your job and turn off your income. Your spending will also dictate how long your savings will last after you quit the 9-5.Lay out your income and day-to-day personal spending (i.e. outside of the business) and see what’s left for saving. Then, think through any bigger ticket spending you want to do following your launch. If you’re happy to cut out expenses like travel in the short term, that will save you some cash, but if you want to launch your business and enjoy your lifestyle along the way, you need to factor this spending in.This amount will vary for different people and businesses, so think through the dynamics of the business you want to start and what you’re comfortable with. I’d normally suggest saving an absolute minimum of three months of living expenses, but ideally, closer to a year. For example, if you know you need $1k each week to cover your personal living expenses, and you want to cover your costs for 12 months (52 weeks), you’ll need $52k in savings for your first year. This will reduce the financial pressure and mean you don’t have to stress about chasing the dollars from day one!
    Starting a business is hard enough and you’ll want to hold onto every dollar possible. Holding too much debt is like trying to fill up a broken bucket, you hustle to fill it up but the money is leaking away at the same time. If you start your business with a leaky bucket, this will give you less of a runway to help your business take off, so do everything you can now to reduce your costs before launch.If you’re paying standard interest rates on personal debt you’re probably paying out thousands of dollars more than you have to. When you eliminate interest, every dollar you repay will reduce the amount you owe, so this could help you repay your debt faster. If you have smaller personal debt, do some research into balance transfers option or enlist the help of a professional to put together a strategy to help you pay off your debt faster and free up more cash to save.
    Once you’re clear on the costs to launch and run your business, and how long you want to cover your living expenses for, you’ve got your ‘launch number’. By looking at what you’re saving based on your spending plan and your current savings balance, you can start to work out how long it will take until you hit your launch timeline (launch number).A word of warning here – if you look ahead and aren’t happy with your timeline, don’t stress, this is completely normal! It just means you need to go back a couple of steps and see what you can adjust in your savings and spending plan to make it happen sooner. Think about which of your ‘wants’ are non-negotiable, which are important, which can be delayed, and those that can be removed. It’s about priorities here. Make the adjustments needed to a plan and timeline you’re happy with. Then, print a calendar, post it everywhere around your house, make it your screensaver, and look at it EVERY DAY. Use this as a motivational tool to keep you focussed and on track as you count down the weeks and months until you launch. This will help you focus on your end goal so you’re not just saying no to that night out or weekend away with mates, but instead saying yes to your business and future as your own boss.
    Once your savings plan is set in a timeline you’re happy with, now all you need to do is, make it happen! Your spending, saving, and banking will have the biggest impact on how easy it is to stick to your plan. Set up your banking in a way that makes it easy. Automate your banking transfers, separate your spending, and set your savings to happen before everything else. If you need help in this department, check out my guide to set up your banking like a boss and make it easier to save.Another way to increase your chances of sticking to your strategy is by being accountable. Most people think being money smart should be easy and that you should be able to do all this yourself. But with anything important, often the worst person to be accountable to is yourself because there are no consequences for stuffing up other than you kicking yourself for a brief moment (which is quickly forgotten when you start playing with your new tech toy, take off on that spur-of-the-moment weekend away, or order up a round of Cafe Patron shots at the pub). With an ‘accountability buddy’, you know an uncomfortable conversation is coming if you haven’t done what you said you would. Your buddy could be a friend, partner, or financial adviser– whoever it is, they need to understand what you’re working towards and be able to have tough conversations when they’re needed.

Launching your own gig is a big undertaking. If you know what to do and put a good strategy in place to get there, it’s totally achievable, but it won’t just happen by itself! It’s so easy to spend most of your time doing things that are (or seem) urgent, and setting up your money to launch your own business may be something you constantly put on your to do list but never actually get around to, but if you are keen to turn your side hustle into a full-time gig then you need to make this a priority so you can quit your day job and start living out your dream career. Make it happen.

Thanks Ben! Did you know there is a whole chapter dedicated to your finances in our ebook, Calling the Shots? Get your hands on it today. 




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