Many times when people think about somebody becoming an entrepreneur they think about, day one they had a job, day two they quit their job, day three they started a business. It just happens in three days.
But it doesn’t happen that way. Most people started their business being part-time or they had a transitional phase into going full time. This isn’t everybody, but this is a lot of people.
I think about when I interviewed Steve Wozniak, co-founder of Apple, when he and Steve Jobs started the company together.
I asked him a question, “So how was it when you got started?” He said, “I had a job, we were both working, whether it was Atari or Toshiba, we had a job. And then six months later when I noticed that people wanted to buy the product, of Macintosh and our computers, then I quit my job and I went full time because I had benefits, etc.
And then we started Apple. So there is that idea to know that a lot of people start part-time. The key is to know when to go full time.
So today I want to talk to you about 7 items to think about when going full-time as an entrepreneur Some of these have to do with each other. Some of them are completely separate.
But it’s 7 things to be thinking about. When someone calls or asks me the question, “You know, Pat, I’m afraid, should I go. . . am I ready? When am I fully ready? Should I quit my job? Should I go full time? Should I do this?” By the time I’m done with this video, the people that are thinking about, “Am I ready to go full time, and if yes, what date should I put for me to go full time and become a full-time entrepreneur?” So let me get right into it.
To me, I remember when I went full time, the first thing I had to know that whatever product you are selling as an entrepreneur, you have a track record of selling that product.
For example, if someone wants to become a real estate agent, hypothetically, if you never sold a single real-estate property, and you go full-time the next day, and you have nothing in place, nothing in savings, nothing, you’re just going to go full time the next day, but you never sold, and you’re thinking your family and everyone is going to buy from you, it’s a bad idea.
Now does it work every once in awhile? Yes, but it’s not the best idea for someone to go full time right off the bat.
I was selling investment products and insurance, 401ks, IRAs was what I was selling, and I had to know, “Patrick, do you know how to sell these products?” The moment I knew how to sell that product, and the number I like is 50 sales, but 50 sales is not in every business, and in real estate, 50 sales, maybe you’ve sold six different homes. Or you’ve sold ten different homes.
Then you may be ready to do that. If you’ve sold six homes, depending on the type of market you’re in, and sales you’re in, it could be a $60,000 payday, it could be a $100,000 payday. If you’re in the Arkansas market, with $60,000 homes, it may be a $15,000 payday.
So it’s all relative on where you are. But I want to be able to know that I have a track record of selling that product and making money selling that product and not a one-off success story or two.
Multiple success stories depending on the industry you’re part of. The next thing on when you’re ready to go full time is this. Say I have a job and I’m making eight grand a month, hypothetically.
And I want to go full time in my business, and my business is only paying me $1100 a month, the last three months I made $1100. And by the way, never go full time on one big month.
The way I gauge my income is I take my six-month income, and whatever it is I make in my business every month, and I take the lowest number of the six months, and that’s my real income, hypothetically. If month one I made six grand, month two I made $1500.
Month three I made three, month four I made $1100, month five I made $700, and month six I made $7,000, my real income is $700. That’s how I do my math. What is my bottom line number, is $700? That’s the number I’m going off of. So, the second point is, to have the income coming in from your business cover your monthly expenses.
So if your monthly expenses are $2800 per month, and your net income, you’re making based on your business is three grand a month, you’re ready to go full time, because it’s been covering that. Generally I like that to happen on a three to six month period before I go full time. The next one before going full time as an entrepreneur is having six months of expenses covered.
Now this depends on what type of a business you have. If you have an investor that comes in and they tell you. . . you know, my friend, Robert Greene who wrote the book, 48 Laws of Power, he wanted to write a book called 48 Laws of Power, and he meets this investor in Europe and he said, “Look, I’ll cover your expenses for two or three years, you go write this book.”
If you have somebody that’s willing to invest for you, and cover you, then you have time. Then you can go full time right now and make it happen. But what if you don’t have an investor? What if nobody is willing to invest in your idea? Then you have to have six months of your expenses covered before you go full time.
So if your expenses are $6,000 a month, you’ve got $36,000, you’ve got six months to get your business to a level where you’re making that $6,000 a month, and you’ve got to get to work. Every single day counts, every single sale counts, every single appointment counts, every single call counts, every single minute counts, because that number is you’re tapping into $36,000, 34, 33, 32, 31, 30, you’ve got to make sure you make that money by the time that 36 goes to zero.
Point number four, on going full time, if you’re single, you have to talk to your family, but very rarely, parents understand when their kids go full time or they become entrepreneurs, and they’re really not supposed to unless they’ve been entrepreneurs before, you’ve got to understand that your parents, you know, if you’ve been a kid for 18 years, to a parent, you’re a kid for 18 years.
And they think you’re going to be a kid forever, right? But parents believe in their kids and they love their kids, but they don’t necessarily want to see them go through a failure, so you have to go earn their respect, that you can become an entrepreneur.
You know, there’s a. . . my mom doesn’t believe in me, and my dad doesn’t believe in me — that happens a lot. Well, you’ve just been a kid longer then you’ve been an adult in their lives.
You’ve got to go earn that respect from them and when you do, they say, “Oh wow, we never knew you could do it. Good job! Now you’re an entrepreneur.”
But you’ve got to make sure that you have that conversation, if you’re married and you’re watching this, you’ve got a family and kids, you’re not single, somebody single’s saying, “I don’t care. I can go full-time today,” you can. I did. I went full time at a young age. Lost, failed, failed miserably, and I was okay. I was in at $49,000, I lost every single thing.
Credit card debt, I mean, it was terrible! But I didn’t have kids, I didn’t have responsibility, I didn’t have a wife or someone that was relying on me.
If you’re married with kids, and watching this, it is very important for you to have this conversation with your partner or spouse before going full time because you’ve got to feed kids, family, all that stuff, if you don’t have the savings, if they know that you have the savings, if they’re willing to support you with the savings, then you can go do it.
One of the good stories I recently saw was from Kevin Hart. Kevin Hart goes to his mom and says, “Mom, I want to be an actor.
I want to be a comedian .” And his mom says, “You’re out of your mind!” He says, “Mom, please, I want to do this.” Finally, his mom says this to Kevin Hart. ” I’ll support you for one year, you don’t need to have a job. One year.
But if you go and become a comedian, you better believe, I’m working to pay your bills, for one year, I will support you financially, but you better be working hard to become a professional comedian.”
Kevin Hart today is in every other movie. If you blink your eyes and open them up, he’s in another movie that he’s doing.
Kevin Hart, making millions of dollars, and his mom’s proud, but that happened, he had that conversation with his family, his family believed that he was serious, and the rest is history. By the way, comedians, they’re entrepreneurs. Actors, artists, they’re entrepreneurs.
This is independent contract, the world where you’re going and making money on your efforts, you’re not getting a W-2. If you don’t work, you’re not making money. That’s the same mindset that goes into doing what they’re doing.
The next part is timing. Timing is what it is. A lot of time, I have a lot of people that I coach on going full time, and some of them are afraid, so they wait way too long, and they’ve been ready for a long time to go full-time. They just don’t want to work that hard.
What you’re really saying if you’ve been holding off is that you’re afraid of how much work you need to put in, and you don’t really want to work that hard. That’s what you’re saying. You know deep down inside that you can make it, but you don’t yet have the work ethic and you’re afraid if you really want to put that much work in. The other people are the ones who do it too early.
And you could have waited a month or two more months before going full time. There’s never really a perfect timing on when to go full time. I’ve never seen anyone do it just perfectly, everything perfectly on time, no matter who does it it’s going to be ugly at a period of time when you decide to go from W-2 to entrepreneur full-time, but there’s a timing component.
And you’ve gotta know if you’re being way too early or if you’re being way too late. Generally you’ll be able to understand it much better on when to go full time. So that’s the timing part.
The next one is, it takes courage, you’ve got to have guts when you’re going full time. You’ve got to have the guts. I mean, I had one of my good friends, Fred and his wife Christie, these guys are bartenders, they’ve been bartending for awhile, but not regular bartenders.
They’re making six figures, they’re doing good and they were thinking about whether they wanted to go full time or not, and become entrepreneurs or not, should they go become this, should they go become broke, should they do this, should they not do that, finally, they did, and when they did it, his wife gets pregnant and this is like, get married, pregnant, and start a business.
Talk about anxiety and panic on what to do. But they had guts, they had courage, and they went to work, and this month, in the month of May with their business, they’re going to net somewhere around $50,000, but if they didn’t have the guts to do that, going from six figures as bartenders, they would have never made the 50, but it was never really perfect timing for them. They just had the guts to do it. That’s why they are where they are right now.
The last one I’ll talk to you about is similar to what I said about talking to a loved one is sitting down and letting your family know what’s going to happen with schedule and moving forward. Let me explain what I mean about schedule and moving forward.
You know, a lot of times, if you’re married, again, if you’re married, and you’ve got kids and you’ve got a family, if you don’t sit down and tell your family what to expect when you become an entrepreneur, your spouse, your husband, your wife, your family may expect you to be coming home at 5:00, like you do with your job. They may be expecting you to come home at 6:00, like you did at your job.
That’s not how it’s going to be when you’re an entrepreneur. You need to get the buy in of your family on the type of schedule you’re going to have the moment you become an entrepreneur. They need to understand that is not a 9-5, you’re going to be working double time, there is no 9-5 as an entrepreneur.
Your morning early 7:00, and you’re going to have 10:00 nights, sometimes 11:00, 12:00, but you can have Sundays with your family and I’m a six day a week type of a guy, myself.
We have a blast, we travel, we do all that other stuff, but there needs to be that conversation taking place with family to know what to expect, when you’re going full time with business.
Because in reality, what is the real reality part of becoming an entrepreneur. Think about it. So ask that question.
Why do you want to go become an entrepreneur? Why? Freedom? Lifestyle? Control? Building something; legacy? Being part of something very big? Solving a problem, solving a bigger problem? Finding a way of doing it better? Financial freedom? Victories? You know, all of that comes together, but all of that stuff is what everybody wants.
You know, going through that process, like the whole process of making a sausage, sausage may taste very good, but the process is as nasty as possible, and very few people want to go through that process. If you do it right as an entrepreneur, and make your transition from part-time to full time following these seven points that we’ve got here, it will make for a better transition of going full time, but there’s never, ever, ever a perfect, right way of doing it.
No matter whoever I’ve seen do it, and it’s “Oh my God, you don’t understand, I’m so nervous, what do I do?” As long as you know how to put your head down and work your butt off, and know how to sell your product and figure out ways to make money with the product that you have, and getting better, things out to pretty much work out in your favor if you do that.