Do I take the plunge?

[Airlie]

Hi All,

Looking for thoughts on my current situation from like-minded people…very long post so no offence if nobody can be bothered to read it!

Right now I am considering taking the plunge to start my own business, due to the nature of the business I can’t run it alongside my current job as there would be a conflict of interest (it’s basically doing the same thing as I do for my current employer).

To go it alone the setup costs would be small, I would just need to set up the usual things such as a website, home office ect…all work could be done from my home as its essentially consulting. I am highly experienced in this field and fairly well known within the industry for what I do as it’s a bit of a niche, I don’t know if I would win work based on my current connections or not, but it is definitely possible and that would be my plan initially. If that doesn’t work I need to make new connections and market my service on a low budget.

I don’t particularly enjoy working for my current employer, but I also know that it could be worse, I do feel like I am wasting my life sat in an office though. My pay is pretty good for the area I live in and generally I get left alone to manage things how I see fit, although that’s changing more & more all of the time now and I’m not very happy with the new way of working being forced upon me. If I stay in this role, I will probably be promoted to director in around 10 years when my boss leaves…other than that, I don’t see any progression in the short term other than just annual pay rises etc. In general I am fairly comfortable right now with work life balance and salary, but I just feel like there’s something missing…

My dilemma is – do I take a chance and leave my job to try and start up on my own? By doing so, if successful I would give myself freedom to work from anywhere (which really appeals to me) and most likely earn quite a bit more than my current salary whilst having to actually work less (I know at the start I will have to work a lot more and I am prepared for that). If it doesn’t work, I would be quitting a well-paid job for my area (it would be hard to find another with this salary locally), I would have used all of my savings to keep my bills paid (I have 6 months money saved) and I would be giving up a job that has good prospects long term (although short term I have gone as far as I can as mentioned before). The real question is I have no idea if I’d be able to win any work from existing contacts…it’s possible, but like most things…who knows! If I can’t win work form existing contacts, it’s going to be harder to get the business of the ground, but still not impossible…things will just be a lot slower and I will struggle to keep my head above water for the first year or so.

Why would customers want to use my service you ask? The main reason is I would be a third cheaper than most other UK companies and my service would be just as good…actually better given my expertise as I could really focus on delivering the specific service I plan on offering (currently I am stretched over many things in my job). Once I leave my employer, there would be a big knowledge gap in my area.

What do you think – Should I stick or twist?

 

[Mark T Jones]

There are 2 things which would be of concern to me at this point; though you you might well have good answers for both:

1. Your post isn't ooozing with the kind of drive and passion it takes to pull a business throuh the inevitably tough first couple of years.

2. 'Cheaper' business models are invariably flawed, plus selling cheap is tougher than you might imagine.

On the second, I'd suggest you take a step back and focus on a niche where you can be better, rather than cheaper. This might also help with the first!

 

[mattk]

First of all, you need to check your contract with your current employer to ensure you don't have a non-solicitation clause. This could cause you problems if you plan to approach clients you've met through your current employment.

Secondly, this bit concerns me... "most likely earn quite a bit more than my current salary whilst having to actually work less". Trust me, you'll be working A LOT harder. Today, you have work dropped on your desk. Running your own business you have to go out and find work, deliver that work and at the same time do all the "admin" tasks associated with running a business such as bookkeeping, invoices, paying your taxes and so on.

However, despite saying all that, I would definitely recommend you weigh up the options. Depending on your industry, could you go and work as a freelance contractor for a period of time? This would give you an introduction to the world of business, but with the relative security of a few months guaranteed income and an opportunity to start to build a client base of your own.

 

[Airlie]

Thanks for your reply,

I’m genuinely passionate about doing this and thought about it a lot for several years, I think I try to play it down to try and get a balanced view from people....I can see it doesn’t come across like I’m desperate to make it work on this post! I actually love business and owning my own would probably be a dream for me.

Whilst I will definitely focus on making things better, a reduction on cost is still important to my initial business plan as I feel that’s what will temp people to give me a try initially (people have won work from me in this industry the same way). But thanks for your thoughts on this I will certainly take them into consideration.

 

[Airlie]

Thanks for the input on contractual issues Matt, I’ve checked and there are no issues there. The working a lot less part I can see what you are saying, but what I meant was in order to match my current incomings I wouldn’t need to actually win a great deal of work....I totally understand all the extra parts that will come with running a business and I am prepared to work harder to cover everything. Thanks for your thoughts.

 

[lazypbx]

>2. 'Cheaper' business models are invariably flawed, plus selling cheap is tougher than you might imagine.

I second that. Lot's of people start a business thinking it's all about cost, but it's about value. Value will include things like confidence, trust, history, relationship, risk etc.. For a example a company may not want to deal with on single consultant because you might get ill and leave them with difficulties. If you're 'cheap' it can also raise concerns about quality. As Mark says the 'cheap' model may be much more difficult that you think, you will need to put a lot of extra effort into the business and may have much less time for your consultancy than you think, there will be gaps in employment, you'll possibly find yourself needing admin staff etc.. all costs which now have to consider. If your current employer is charging the market rate, then it's likely you will not be able to sustain a business on much less.

I know of a situation recently where a consulting friend working at a senior level in a consulting firm offered a client the same service but direct (exactly the same staff were on board). It would have saved them a 6 figure sum, but they declined. Why ?- because they looked at the overall value, the relationship, risk etc.

You should consider a model where you charge similar but add more value. Think about what could be done different or better than the service delivered by the current employer.

 

[Newchodge]

You list the (actually very few) reasons why you are unhappy in your current job. Can you look at just those reasons and specify what will certainly improve if you set up alone. If those certainties are worth the risk of losing most of your income, then that should influence your decision. However, looking at your list I can't see that much will change except that you will work harder for less return.

 

[Cube Digital]

Don't sell cheaper - I see cheaper and my first thought is what is wrong with it.

Running your own business is very different from being a technical expert in another business you do not run.

Have a read or listen to E-myth Revisited.

 

[Paul Norman]

Only you can really make the choice - it is, as you have said, a big decision.

And, of course, many of us here are hopelessly biased. We have done it. We are now living from our own businesses. And some of our memories of the early pain have receded!

However, a couple of pointers:

1. Being unhappy in your job is certainly a reason to leave. But you could leave and work somewhere else. To go it alone well requires more than that. A burning desire to go it alone, for example.
2. Spend some time (the evenings, for example) putting together your action plans. What are you actually going to physically do to get the business going?
3. Think about your marketing stance. Price alone is rarely enough to grab sustainable levels of business.
4. Listen to people that tell you how hard it can be for the first year or so. Think through how you are going to manage your motivation through that. What if you cannot pay yourself a salary, for, say, a year?
5. Go through number 2 again. Give yourself the maximum chance of success.
6. Understand what you are good at. Be brutal. You are about to become your own boss. You will need some honest appraisal type feedback from yourself.

Apart from that, if you decide to do it, I wish you the very best. When it works, it is very satisfying indeed.

 

[Airlie]

Thanks all,

I was fairly kind about my job to try and get a balanced view but it seems that it’s gone the other way and swayed the view to much. Reasons I’ve had enough are:

I’ve gone as far as I can, there’s no progression for me even if I stay another 5 years.

I’m being forced to use new systems that I actually hate working with.

Held accountable for large amounts of revenue with no bonus in place for actually achieving it.

I used to get to travel internationally - that’s now stopped due to acquisitions of other companies.

Receiving 150/200 emails every single day, if I have any time off I come back to a mountain of work.

Feel like I’m wasting my life stuck in a dead office.

For balance - things I like are the people in my local office and the pay is fairly good. I used to get left alone to decide the best way to do things but the corporate machine is starting to stop that.

I shouldn’t have done - but I did briefly chat to a customer I know very well about the possibility of me moving on, they said the main reason they use us is because of their relationship with me, I think this would typically be the case for a handful of customers. Basically, they have no other reason to be using my company as all work is done via myself (not the case for all customers, just a small amount).

I have other responsibilities other than just the technical stuff so I’m not too bad with things such as finance etc and I’ve done sales before so I know I could handle that.

The reason I would be cheaper is my overheads would be much lower, other than that the product is the same and actually would be better. Going alone has financial risk and that’s the big thing I need to consider, but if it goes well I could also make a fortune and also have a lot of freedom.

Worst case - I fail and eventually take another job earning less and I’ve lost a few grand in savings.

Best case - it takes off and I earn x4 my salary (I’ve considered taxes and expenses), working from wherever I want.

It’s a tough one! I’ll only know if I decide to go for it I suppose!

 

[Scott-Copywriter]

Expect some conflict if you quit your employer and then start poaching their clients.

Legalities aside, they aren't going to be happy. Not one bit. What they can do about it is a different question, but it can still cause a lot of stress. Many companies wage war over things like this.

Also, considering the circumstances, I'd consider 6 months of savings inadequate. If things don't go to plan, you'd be wise to think twice about leaving a well paid job and putting your financial status at risk based on success being rated as "not impossible". They aren't good odds.

Like any decision of this type, it's about risk/reward. Based on what you've said, I'd suggest the risk outweighs the reward at this point. Perhaps that could change though with more research, a larger financial buffer, and a clear plan of action to get back into employment if the freelance route fails.

The key here is to plan everything out in as much detail as you can, and then decide. Prior to leaving, if you choose to do so, you should already have a plan of action ready, as well as plans A, B and C based on the most likely eventualities.

For example, you've suggested that you may have to market your services if plan A doesn't work. How will you do that? What methods of advertising will you use? How much will they cost?

Believe me, it's surprising how many people mark a solution as "marketing" and then realise that it's nowhere near as straightforward as it seemed at first. Reaching a niche audience with a convincing message that causes them to disrupt their status quo isn't easy.

 

[Airlie]

Thanks everyone for your input!

I’ve actually already written a detailed business plan which lists things such as marketing strategy’s and a few different financial outcomes, good to know I am on the right track with this.

On the approaching customers part - I agree hat it would be crazy to expect my employer to be anything but furious about this and I have wondered what the best strategy to avoid conflict is. This is a massive company so I’m not potentially sending them under or anything, to be honest in the scheme of things they’ll hardly even notice the fall in £ (the department will, but overall the company defintley will not). I was thinking of simply telling them I’m moving on to a new job elsewhere...no mention of any plan to start up on my own after working my notice period, what do people think about this?

There have been some very useful and somewhat challengeing points made which is exactly what I was after so thank you all fornylue honesty.