Wednesday, June 16, 2010
Catching up with friends I often get comments along the lines of 'Good on you for taking a risk and leaving your job to start your own business, I wish I could do something like that.' Starting your own business is certainly not the most conservative thing to do, but I don't think it's such a risk.
When we started Shoes of Prey, here was the decision making process that Mike, Jodie and I went through:
The best case scenario is we build a good business that we can either continue to work on or sell. We'll have done something we loved and ideally be in a good position financially.
The worst case scenario was that the business failed and we're down $50k in startup costs and a hundred or two more in lost salary, and we would have gone back either to our old jobs if they would have us, or something similar having learnt a lot more than we would have otherwise.
Given we'll work until we're 70 or 80 anyway, what's $50k and a year or two of lost salary now? In our minds the best case scenario far outweighed the worst and we were confident that the odds of the best one happening outweighed the odds of the worst. That seemed like a good bet to us so we did it.
Another thing we did that looks like a risk on face value is Jodie leaving her job to work on Shoes of Prey full time. This does mean Jodie and I have no salary at the moment, however having Jodie work on the business means it's more likely to succeed. Things are currently going well but if that were to change and the business fail, we should hit that point sooner meaning we can move onto something else earlier than we would have otherwise saving Mike and I additional salary that we would have lost otherwise. So it's really wasn't a big risk having Jodie join us full time at all.
A few of my friends work in legal roles, don't enjoy them and plan to leave, they just haven't worked out what they want to do yet. I actually think they're the ones taking the biggest risk. My first job out of university was as a lawyer. I was having a career chat with one of my mentors and he explained that he had been a lawyer for 10 years, he really didn't like it but he had a mortgage and had settled down and gotten married. If he left his legal role to do something else, his salary would halve because his skills were so specialised. He'd left leaving something he didn't like until too late, and now he was stuck with it.
Going down that path is a big risk for a lot of lawyers who don't like their jobs and afraid to look for something else. It's said so much that it sounds cliched, but it really is true, you only live once and work takes up a huge amount of your time. It's worth putting in the effort to find something you like doing, and as I see it, the risk of falling into the trap of spending your life doing something you don't enjoy is a big one that is best avoided.
As I see it, if you plan for it properly, starting your own business is a lot less of a risk than it might first appear. I'm keen to hear other people's thoughts on this.
Posted by Michael Fox at 8:08 PM