It’s a common daydream – leaving your job in the corporate world and striking out on your own. Maybe you want to pull the rip cord like Steven Slater did when he literally ditched his day job by sliding down the exit chute of an airplane — a beer in one hand and (I imagine) his middle finger waving on the other.
You could do that. You could quit, start your own company and be happy.
But if you see yourself bailing out of corporate America, there are some key things you must do now to prepare. (for example, check out my P.S. below.)
As a lesson in quitting the rat race, let me tell you a story about two young kids who are now very, very wealthy young men.
Not too long ago I spoke with brothers Ian and Shep Murray — a couple of guys who ditched their jobs to live the dream, and went on to create a wonderful, fun and highly profitable $100 million company.
The lessons they learned are so important. I really want to share these 3 lessons with you now – before you pull the exit handle and go screaming off into a new venture.
Ian and Shep Murray started the uber-cool necktie company “Vineyard Vines” because (despite being just barely out of school) they simply were not enjoying their life in the corporate world.
Fortunately, Shep and Ian Murray were young and had a high tolerance for risk. As Shep puts it, “We had a vision and we just went for it.” Still, they did a couple things exactly right… and a couple things, well, not so much. Let’s break it down.
Lesson 1: Plan The Work, Work the Plan
The most important thing the Murray brothers did was to take their time.
Unlike the Jet Blue attendant, there was no cowboy exit from their day job. In fact, they took several months to understand and plan all the details of what would become Vineyard Vines.
Ian and Shep mapped out products, promotions, and profits… taking at least a stab at the concepts and cash needs that were ahead. Mapping out a finance strategy is a vital – and often overlooked – part of a business plan.
They managed to answer tough questions up front, including key cash flow issues: It’s easy to project sales, but until those sales are paid for,where will the cash come from to buy raw materials, pay salaries and put gas in the car?
Lesson 2: Don’t Quit the Day Job
Ian told me, “We didn’t have a penny to our names, but we had an idea. While we were still working, we used as many [of our employer’s] resources as we could. We took advantage of the studio at the agency where I was working for design resources. And Shep’s employer had a fashion division that put us onto the suppliers.”
There’s no smarter entrepreneur than the one who uses the day job as a springboard into entrepreneurship.
By the time Ian and Shep told their bosses to ‘shove it’, they had developed the designs and supplier relationships they needed. Quitting their jobs was not their first concern – having a real business to jump into was the priority.
[NOTE: See the note of caution about this point in the comments below… using your employer’s resources could mean that your employer has a claim on your new business!]
Lesson 3: Balance Risk and Discipline
I’m not fond of the strategy that the Murrays used to fund their business, but you’ll want to hear this.
During the early days of Vineyard Vines, the Murray brothers ran up more than $40,000 in credit card debt.
That seems like a big mistake to me. The interest on credit cards can be hugely expensive, and they are so easy to use that you can quickly get deeper into debt than you can manage.
With true discipline, however, the brothers Murray juggled multiple cards, moving balances around and making minimum payments for long enough to start also making significant sales. As Ian told me, “…We knew that someday when we were making millions, that ($40,000 debt) would seem like a trivial amount.” Lucky for them, these days they are making millions.
So the fact is, it can be done. But the more important point is, you gotta be ready for the risk.
There was no salary for the Murrays during those early months. Sales had to cover credit card payments until they could get some big customers in the door. Maybe this kind of bootstrapping is just the motivation some people need to create a fast growing company.
It’s the “get off your butt and sell something” mentality that I like. But you’ll have to judge for yourself whether you can stomach the risk. Here’s two points to consider:
DO THE MATH: Your dream of entrepreneurship will quickly become a nightmare if you don’t project both sales and expenses well into the future. Understand the budgets and forecasts, then stick to it. Build an income statement NOW, while you are still working for the man. Understand the sales you need to hit in order to pay off all expenses AND replace your salary.
BOTTOM LINE: If you don’t have a template to project your income, get one. I’ve got an easy template to use. I’ve used this one to start hundreds of business plan projections, and you’re welcome to it. Fill out the form below to automatically download your free copy.
Dedicated to your (Start up) success,
PS: If you don’t have a great business plan and a clear financial forecast, please let me help you. I’ve written hundreds of business plans, and I can make your plan so powerful, so inspiring, that you’ll wonder why you haven’t started the business years ago.
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As Ben Franklin said, “Failing to Plan is the same as Planning to Fail”. Click the button below to be taken through a totally secure PayPal checkout process. At the end, you’ll get links to download not just the best plan template in the world, but also a free gift that will help you forecast your profits from your new business. Don’t wait. I can’t help you if you don’t ask. Click the button below to get started right away.
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