Salary or start a business?

[screwitletsdoit]

I have analysis paralysis and would really appreciate some general advice.

I’m currently in my early 30s working in finance earning a decent salary (take home £2.5k net). I have spent the last few years paying off all my debts, I have a small mortgage and low expenses (less than £1k per month) and no kids. My wife also earns a similar amount so we’re comfortable and I think I am in a relatively strong position to allow me to take on some risk.

I have two paths I could take, build my career which pays quite well but doesn’t make me happy and fill me with purpose, continue to save hard and invest in the usual things like rental property, shares etc and do quite well or go for it and either start or buy a business and potentially do much better. I guess it’s the old saying that the enemy of the great is the good!

I'd like to think I have realistic aspirations. I don't want to be the next Peter Jones but how realistic is it to do much better than a senior white collar employee (i.e. six figure salary)?

I’ve started to do some research on buying an established business on businessforsale.com. I mentioned in my intro post that I wanted to start a property related business. This is something I am still yet to decide upon.

I would really appreciate any advice and recommendations for further reading.

All thoughts welcome!

 

[domainguy]

I'm you a few years down the line. I chose the salary path, earn more than you and doing ok but oh so bored with life! wish i'd started a business years ago and racking my brains for one now. Everyone is different though. I'm sure many business owners on here would happily swap for my 9-5.

 

[tony84]

Being self employed if successful you can earn in theory as much as you like. But if not successful you can earn nothing or worse, lose money.

When I first went self employed (working with a financial advisor) I had to go back to being employed after 6 months as I could not do what I wanted to get business so was earning nowhere near enough. 12 months after being employed again I then stepped out completely on my own and have done pretty well.

Its a funny one as work life balance is better in some ways but worse in others. For example, I get up at about 9am, I do a couple of hours work, then go to the gym and get my shopping done whilst its quiet etc. But I can be working until 9pm at night sometimes or weekends.

Overall I do like working when I need to, rather than working 9-5 because I have to. ie if its quiet, I get to enjoy it, im not just stuck in an office because I have to be. but when its busy I can be working 60 hour weeks.

Unless I had to, I would never go back to being employed. But I do not think I would ever get a job being employed earning a 6 figure sum plus pension and everything else that comes with it. Where as being self employed there is a far better chance in time I could get to that level if I pushed myself.

 

[The Byre]

If you want to go into business because you think that there will be a six-figure salary at the end of the rainbow - go away and stay away!

If you want to go into business because you feel that you should be creating something and doing something special and are happy to get by on £20k for the two of you, at least, until such time the business 'takes off' which may be today, or tomorrow or in ten years time - or just never, then welcome and good luck.

If you do it right and you do it smart, you never know - there just might be enough air in those tyres to pay you that six-figure salary. The only thing there is, you will find you are so happy at what you are doing, that you will not want or need that six-figure salary and you will plough any spare cash into your business.

When you are young, you should be building value (i.e. equity) into your business and into your life. Being debt-free for both yourself and the business is the biggest luxury you can enjoy in life.

 

[billmccallum1957]

Personally, I would look at starting something part-time, whilst you still have an income.

Don't invest more than you can afford to lose.

Getting into property is pretty dependant on location, London & the South is over-priced, but the North East is cheap as chips.

 

[boring-friday]

I’ve started to do some research on buying an established business on businessforsale.com. I mentioned in my intro post that I wanted to start a property related business. This is something I am still yet to decide upon.

I wouldn't do this, I'd only buy a business if I thought I could improve it. I'm quite good with stats/figures and internet marketing, I have quite a few people working for me doing internet marketing so I know that I'll be getting better/more cost effective advertising than 95%+ of my competitors.
So if I wanted to buy a business I'd be looking to buy one that had a crap website/marketing and one that I thought had their prices too high or too low. Everything else I didn't know how to do well I'd check how well they're currently doing, if its a restaurant and the owner is a amazing chef and they have amazing food I might be concerned about matching it for a reasonable price, if the owners have basically given themselves minimum wage jobs then I can probably easily replace that so game on.

If you have no relevant skills you're basically giving yourself a minimum wage job and hoping for the best, hiring people when you've never hired anyone before aswell. There's a 99% chance the previous owners will of been running the business better than you can so the profit is only going one way.

 

[jack1980]

I think you might try if the right age and in any case you had a good gain so strong shoulders ! thrown

 

[The Byre]

It is a not raining here also! thrown back.

 

[MyAccountantOnline]

........I have two paths I could take, build my career which pays quite well but doesn’t make me happy and fill me with purpose, continue to save hard and invest .............

Personally I think it's worth remembering life is short.

I suspect there is nothing worse than looking back and thinking I wish I tried.

 

[myself]

If you know already what you want to do for your business it is huge and also if you have savings it could be perfect before you actually will be able to make money with your business. But personally I think it is better to do what you want and not somebody else want!

 

[Root 66 Woodshop]

If I were you, I'd give myself a target... save £10k over the next few months... unless you've got £10k spare in savings... if so over the next couple of months think about what you personally can and can't do.

what kind of business would like to do? - you're already in finance... that's making you wish your life away - but is there another area of finance that you've not dealt with yet - that could make you grow with energy down below... in your gut I mean!

If you've had enough of finance - make a list of things you can/can't do - are you a handy chap? do you know handy chaps? can you manage a business while passing manual work onto others, i.e. sub-contracting jobs out.

if after the few months you've been pondering - and you've still not got a clue what you want to do... or even can do... at least you've got £10k cash saved... hey there's your business right there!!... make 10k every 2-3 months doing exactly what you're doing... while thinking about doing something else... see!! subcontracting ideas is a cracking idea for a business for you... I'll take a 10% sur-charge!

 

[myself]

That is really good advice man, good said and looks like you are quite long in this area. I wish I was on this stage too!

 

[CompareNewTyres]

If you're wanting a logical response then stay in your current job, keep the safe salary and invest your money. But I don't think starting a business is a logical decision, it's a passionate decision. Head and heart rarely mix, I don't think at least.

I think you're clearly thinking about setting up a business and if you do it I hope it works out for you. My only advice is that if you have never failed, you've never tried. Failure isn't a bad thing because you'll know the outcome rather than spending the rest of your days wondering "What if...."

You have as much chance as anyone else in succeeding in business. All I would say is maybe minimize your risk by trying to startup whilst working.

 

[Scott-Copywriter]

Just think about it.

And I mean really think about it.

This advice might seem obvious to the point of being useless, but in any path you want to take regarding a new business, the answers you seek are usually there if you dig deep enough.

For example, if you look at a certain business idea, you must ask yourself:

- Is there enough demand?
- How strong is the competition?
- To remain price competitive, can I still make a decent salary after doing all the maths?
- Do I have money to fall back on if things don't go as planned? If so, how long could I last?
- If the business fails, how easy/hard would it be to get back into full-time employment in my current profession?
- Am I equipped to deal with marketing, suppliers, bookkeeping, administration and many of the other tasks involved in running a business?
- To meet my current outgoings, how many sales per week/month would I require? How realistic is this to achieve and in what time frame?
- Is there a ceiling on how much I can earn? The incomes of many one person businesses are limited by how many hours there are in the day. If there is a restriction, how could I expand?

There are many more questions to ask yourself as well, and when you combine these with plenty of research into the field (for example, seeking out the opinions of others already in the field through various information sources), you can build up a much clearer picture of what you should do.

People often speak of the conflict between heart and head, but if you really figure everything out in detail and leave no stone unturned (especially regarding the financials), you will come across ideas which not only provide a lot of enthusiasm, but also make solid business sense as well.

 

[Deleted member 59730]

Just think about it.

- How strong is the competition?
.

The most rewarding areas are the most competitive. Just be the best.

A case in point is acting. There are thousands of out of work actors and competition is intense but it hasn't stopped Daniel Craig making big money doing what he enjoys.

 

[screwitletsdoit]

Wow, I'm pleasantly surprised by the quantity and quality of advice from everyone. Thank you so much. It gives me a lot to think about.

I'm going to keep saving hard whilst I do further research before making any rash decisions.

Thanks everyone.

 

[Claire Freshney]

I'm actually quite surprised at some of the comments here saying 'don't start' a business. Stay safe. Where is the entrepreneurial spirit?

IF you can afford to take the risk - do it. Or regret it. You can live a life of oh wells, not what ifs. So take the chance.

I earn a 6 figure salary and i've worked exceptionally hard for 6 years. I wouldn't personally 'buy' a business. I would go to the drawing board and see where your passion lies. There is always conflict between making money and passion and finding something that covers both - can be difficult - but not unachievable.

Being self employed is the best thing in the world. You are not in fairy-land for having a goal of 6 figure salary. The difference between someone who earns £20k per annum to someone who earns £300k per annum - is just sheer determination, fantastic business acumen and a 'get up and go' attitude. IF you have that, then go for it.

Any business can take 1-3 years to start seeing progress. You can always go back to full time work, but I bet you don't.

 

[myself]

Yes I agree if you afford to take a risk and if you know how to do business, and you willing to do whatever it takes and whatever it needs. DO IT! No regrets! It is only the way to know until you try!

 

[Ali Amjad]

Man, this is really a tough choice. As Steve Harvey says, "MAN, YOU GOTTA JUMP!". And he says it in context of switching your job to Entrepreneurship. If you want to fly like a bird and enjoy true freedom of life, "You Gotta Jump!". Do you have any business idea if you're going to leave your "Safe" job?