As an entrepreneur, I often get asked this question: How exactly do you transition from being an employee to being in business? What are the steps to starting a business, so I can leave my current job and invest in something I’m passionate about? As this is something I went through myself, below I’ll explain the exact steps to starting a business you believe in and finding success in it.
Harv Eker’s Steps to Starting a Business
When people ask about leaving their employee status behind and becoming their own boss, my answer is always simple: There are two types of people in the world. There are waders, and there are divers. You’ll see how important this distinction is as we go on.
I’m going to outline my top three steps to starting a business before you leave your current job. After being in business myself for decades (and struggling for 12 long years), this advice comes from my firsthand experience. It can save you a LOT of valuable time and money in the long run.
1. Find Out How You Work
First, you need to decide what kind of person you are. Do you like to just dive into things and take a big risk? Do you like to just go for it and put all your attention on it at once? Or do you like to just wade in slowly? Simply asking yourself this will come into play when choosing whether to start a business (or not).
Regardless of who you are, one of the things that really bothers me is when people drop their current income to zero in order to start something new. I’m not just talking about a job here — I mean income.
When you’re starting out in business, it’s crucial that you take care of cash flow. There is no point in jumping in and running hard only to find out you’ve run out of cash two months in. Instead, it’s super important to make sure you have money coming in. Then, you can give your business the chance it deserves.
I don’t care if you’re a diver — suck it up for a little bit. Don’t lose your income. You can lower it, yes, but don’t lose it.
Why is this? If you are starting out in business and cut yourself off financially, you won’t be happy. You’ll start coming from a place of scarcity, as opposed to abundance. There won’t be any joy in your new business, and it will feel like a burden before it’s even started.
Do you know what that is called? That’s called diving into a pool with no water. I have a million students, and I’ve heard thousands upon thousands of stories about this. It happens all the time. However, the good news is that it’s easily preventable.
2. Start Your Business Part Time
Whether you’re in a business that you think is not doing well and you want to get out of that business and into a new one, or if you are in a job and you want to get into a business that you love…here is the route I highly recommend you take.
Keep your current situation and start your new situation part time.
Of course, this means working overtime, late at night, and on weekends. However, let me say right now that if this is unappealing to you, you shouldn’t start a business. The truth of the matter is if you want to be successful in business, you will have to work weekends. You will have to work at night. At the beginning, when you own your own business, you will have to work your freaking buns off with 1,000% attention and 1,000% focus. That’s how it works.
If you’re not going to stay in your job while working nights and weekends on a part-time basis and earning some income with your new business (until it’s stable enough for you to fully transition), then my humble advice to you is to forget about starting a business altogether.
3. Get Educated in Your Field
This is a big one so pay close attention.
If your new business situation is in your current field, and it’s very similar to what you’re already doing, then you’ve got a nice head start! However, if you want to jump into something new and different than what you’re doing right now, you will need to get hands-on experience in the trenches.
Even if it seems like a downgrade at first, it’s really an investment in yourself. This change gives you knowledge, skills, and the assurance that your business will succeed instead of thinking short-term.
If you get a job in the field you want to run your business in, then you can learn the ropes on someone else’s dime. (Keep in mind you do this at the same time as building your business on nights and weekends.)
The truth is, people go to university for four, five, or six years to get skilled in their chosen field, and they pay to go. However, if you do it this way, instead of you paying them, they’re paying you a little something. Think of it as an investment in your business — and your future success.
How It Worked for Me
In my book Secrets of the Millionaire Mind, I tell a story about when I was 95% sure that I wanted to open a restaurant. Since I wanted to open a restaurant, I took my own advice, and I started working in different jobs in the restaurant industry.
Throughout my time in the industry, I was a broiler cook, a sous-chef, a host, a busboy, and a waiter and a manager at a pie store. Ultimately, I thought I was going to have a dessert restaurant, so I wanted to meet bakers. In fact, I was going through the garbage every night to see the boxes the pie store threw out. From my digging, I was hoping to discover who their suppliers were.
My attempt to learn everything meant I had seven different restaurant jobs in four months. I would leave each one of them, sometimes even before my employers fully paid me, because I was simply there to learn.
Then, I learned the most important thing about the restaurant business for me: I would never be in the restaurant business.
Can you believe it? That’s honestly what I learned. This was the most valuable advice I could’ve ever received.
How You Can Apply It to Your Dreams
When you work before diving head first into a new business, you go to school on someone else’s dime. You learn what it’s like to be in the business, not to look at it from the outside. To really understand your desires and path, you have to be inside the business. That’s why you look in the trash can and learn the suppliers. That’s why you learn everything you can about being in that business. You have to find out the pitfalls, the good stuff, where the money is made, and where the opportunities are.
Here’s a statistic: 80% of all new businesses fail within the first five years. You’ve heard that 100 times, and it’s true. However, there’s an additional statistic less widely know: 65% of all new businesses succeed if the person was already in that industry. This percentage goes to show that if they were just creating a new niche within the industry they were already in, then the chances of success skyrocket.
That’s why if you’re serious about having your own business, you need to know how you work. You have to be prepared to do the work. Then, you have to be humble enough to admit you don’t know everything. By taking a step back and seeing your approach as a slow and steady investment in your future, you’ll be able to play the long game — and reap the rewards.
So there you have it. My three steps to starting a business before you leave your current job.
Again, like I mentioned, I have many years of firsthand experience with starting businesses. I started 14 different businesses throughout 12 years. Out of the 14, almost every single one of them failed. If you follow my guidelines above, you won’t have to experience the same hurt as me, and I assure you, your chances of success in business will dramatically increase.
For Your Freedom,