Light bulb moment?
Some of the best products around have evolved from humble beginnings, born off the back of a post-it note or random slip of paper, scrawled by enthusiastic hands that are convinced they’ve just invented the ‘next big thing’.
Some of those ‘light bulb’ ideas make it off the ground, while others don’t.
But if your idea is one that genuinely packs a punch in terms of uniqueness, market demand and universal appeal, you might want to consider investing a little time in it.
Easier said than done
Walking away from a ‘paid’ job and the benefits associated with it isn’t an easy thing to do; in some circumstances neither is it the sensible thing to do.
While your every instinct may be telling you that your bright idea is genuinely going to work, cutting yourself free from the comforting cord of an employment contract that boasts a company pension scheme, holiday and sick pay and a job that you can leave behind at 5.p.m isn’t an easy decision to make.
On balance, you’ve a tremendous amount to gain if your bright idea works. But there’s a lot at stake too. It's all about weighing up your options and making a series of carefully considered decisions.
Can't get it out of your head?
Whatever the idea is that’s consuming your every waking moment (to the point where you just can’t get it out of your head!), stop for a while and try to give it some serious thought. Think about whether your idea makes good businesses sense, or whether it's perhaps a hobby more than a commercial business proposition?
Give some thought to the following:
- What is the cost of getting your idea off the ground?
- Who will buy your product/idea?
- How will you take it to market?
- What’s your total spend?
- How are you going to fund it?
- What’s the size of the market and how will you set your price?
- Who are the key people that can help you?
- What funding is available to you? (there’s more on that later)
- And how will this new initiative fit in with your current work-life balance?
If you want to drive your idea forward you’ll also have the ongoing expense of paying your day to day bills as you tackle your new venture, which is why it’s inadvisable to be too hasty and hand in your notice at work. Walking away from the hand that feeds you isn't a decision to be made lightly, so hang on to your day (or night) job until you’re in a financial position to do otherwise.
If the figures don’t stack up to cover both your new business idea and paying your existing living expenses, then don’t do anything rash - even if you do think you’re on to something revolutionary!
Making your mind up
So you’ve decided that your idea is definitely worth investing in. You’ve spent months now tossing and turning, throwing off the covers and weighing up all that’s at stake versus all that’s up for grabs.
There’s no going back. You’re the right person, bringing the right idea, at the right time.
You’ve talked your ideas through with the people you trust, you’ve got some outline costs that corroborate a decent profit margin and you’ve gained ‘buy in’ from your other half (and if you can convince them, you can convince anyone!).
You’re starting to make inroads and moving in the right direction.
Money money money
Unless money is no issue (which is rarely the case), you’re going to have to really tighten your belt if you want to get this business off the ground.
Start by applying some structure to your planning and start to make some serious financial considerations about how you're going to fund your business, possibly cutting back too.
- Work out the cost of your business plan and put it into a workable spreadsheet
- Mock up a cash flow forecast that balances your projected income with any necessary expenditure
- Account for your every spend by being visible with your funds (that way there’s nowhere to hide)
- If you’re still in paid employment, make sure there’s no conflict of interest between your new concept and what your employer offers, otherwise you might find yourself in either a breach of contract or a bathtub filled with hot water!
- Educate yourself on the legalities of being self-employed and find an accountant who will keep you right in accounting practices
- Finally, knock on every door to source funding, despite the amount of hoops you’ll have to go through to secure it, it’ll be worth it in the end!
Money talks, it makes the world go around and without it you won’t get very far.
Quid pro quo
However long you choose to balance holding down your current role while working on your new venture is your call, and depends entirely on how successful your new business is. Making a decision to hand in your notice is a really tough call – scary in parts, exhilarating in others. But it is a dramatic change nonetheless and one that should only come after your business is well and truly off the ground, with a set of trading figures that evidence its success.
Here are some of the key differences of being employed and self-employed:
Who calls the shots?
Some decisions are made for you when you work for someone else, others you make yourself, but there’s usually support available to help you
You make all the decisions yourself. You’ll take the rap when things go wrong, but reap the rewards when your business succeeds
You’ll generally have structured hours and tight regulations over how many hours you can actually work. You may earn overtime when particularly pushed, but your time belongs to someone else
You’ll have no set hours and probably end up working around the clock. On the flipside, you can be flexible about when you work. You’re the boss, it’s your call
Tax and NI
Unless you are a higher rate tax payer and have to complete an additional tax return, your salary is taxed at source by your employer keeping your finances relatively simple
You’ll have the responsibility of both managing and filing your own self-assessment and/or trading/audited accounts. If you get an accountant, you’ll incur the cost too
From Health & Safety to Welfare, your employer will work with you to make sure you meet these legal demands
You are responsible for meeting all legal requirements and regulations, and knowing the rights of all who work for you
In the driving seat
Working for yourself is a completely different ball game compared with working for someone else. When you walk on to an empty pitch and the familiar team that once covered your back is no longer on the same side as you, you’ll begin to experience that first-hand.
However, the exciting bit is that this is all your choice.
You’ll get to create a whole new team for yourself, selecting the players whose skills best suit your business. You’ll have autonomy like never before.
Combine that with the empowerment to make dynamic decisions and the freedom to set your own standards, you’ll soon be at ease in the driving seat and steering a business vehicle that is engineered and fuelled by your own creative juices.
Check out our next feature on ‘A guide to business entities’