In this blog post, Everything You Need to Know Before Starting Your Own Business: I’m going to give the full DETS on all those things that you need to go through and think about before you consider leaving your job and to start your own business.
To do this, I’m bringing you extracts from an interview I did on my podcast with one of the UK’s leading Coaches, Ruth Kudzi and we both go into the details of what you need to go through and think about before you take that plunge.
So if this is you, I strongly advise you read every inch of this blog.
Then skip to the summary section at the bottom!!
Here is the transcript from the interview:
Prosperity Kitchen: So if we have a listener out there and they have got a dream. They want to open a coffee shop I think that was the example I asked you to look at – coffee shop, or whatever really. What would be your advice to them generally? How can they explore that the reality of that dream job is a good reality for them or will be a good reality for them?
Ruth: OK so the first thing that I’d say to anyone if you’re considering changing career is find some people who are doing what you want to be doing and speak to them. So if it’s a coffee shop, go into coffee shops that you like and ask if you can speak to the manager. Ask if you can have 10 minutes/15 minutes with them. Buy them a coffee. But say to them ‘I’m really considering doing this’. Speak to some of the bigger brands and I’ve just forgotten the coffee brand. I wrote it down…..oh the coffee brand that’s in Borough Market…I can’t remember it, but speak to some of the bigger brands and say to them ‘how would I go about opening a coffee shop stocking your coffee?’ So really do your research. Look online. See if there are any blogs or any vlogs of people that have opened coffee shops. Have a look and see what the success rates are for people and then do your due diligence. Have a look at how much it will cost and map it out so you’ve got a plan of what it’s going to look like and if it is actually going to be a reality for you but it’s always good to speak to people because to speak to people, even though your experience may be different, you can start to get a feel of what they do every day. Is it just glamorous making coffee and chatting or are there lots of other bits that they need to do? So there are some companies as well where you can do grown-up work experience and if you’re going to work in a coffee shop, I would say, even if you’re working in a bank full-time, work in a coffee shop. Find out what it’s really like because you don’t know until you’ve tried.
Prosperity Kitchen: Boom. Absolutely love that. Which companies do the work experience? I know there was one lady that was in The Times…
Ruth: Yes that’s probably her. She’s called Lucy and it’s ViewVo.
Prosperity Kitchen: Yes she’s in Chiswick isn’t she or something?
Ruth: Yeah she is. I think she’s going to change the name of her company but at the moment you can look her up. It’s under Lucy, I can’t remember her surname, she’s absolutely lovely. She does work experience for adults and I think doing something like that is quite bold but it’s a really accessible way that you can get into an industry that you don’t anything about.
Prosperity Kitchen: Yes so, brilliant, you’ve said find somebody who is, we were talking about the coffee shop analogy, find somebody or people who are running coffee shops and speak to them. You said do your research, look at people who run blogs, financially plan what you think is going to be viable or if it’s going to be viable. And I think the most brilliant thing you said there was get the work experience. Actually go and work in a coffee shop and actually this is a really good sedgeway into a client that I had, Ruth, who wanted to do this and he went and worked in a coffee and realised he actually hated it. He’d had this dream of leaving this big job and opening a coffee shop in a local village and then he did it and realised he hated it. So thank god he actually went out and did the job. So I completely agree. Get that work experience. Anything else that they need to do do you think?
Ruth: Yeah they need to work out the financials. OK so most businesses still fail on their financials and it’s usually your cash flow and if you’ve got a bricks and mortar business like a coffee shop you’re usually going to have to pay a certain amount in rent, in business rates so get really clear on what that looks like and if it’s realistic. Even at the beginning, if you knew that you had to sell 20,000 cups of coffee a day to break even, that probably is going to start ringing alarm bells. So if you can’t do it yourself, if you don’t know about accounting, I actually studied accounting at university as part of my degree…really interesting. I don’t love it but I know the basics and I would say speak to an accountant because there’s no point going down a road and then getting close to the end and thinking – actually I don’t have the money or this isn’t going to sustain me because things like coffee shops, you’re not going to make your money in the first 6 months or the first year. It’s probably going to take you a couple of years to break even and make money so, if you’re doing it, you need to make sure that you can sustain yourself and you can buy yourself coffee and food and shelter, all of those basics.
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Prosperity Kitchen: And that’s a really good point because most people, particularly if you’re leaving a job to open your own business, what I see and I’m sure you’re going to say the same thing or agree with me Ruth, time and time again with small business owners, at the beginning, is they are hesitant to pay for experts to come in and advise them because they don’t want to pay the fees because they feel that’s expensive and they don’t have much money. Whereas, actually, if you don’t have the expertise and the skills you’re far better off paying somebody who’s an expert in that area to set you up on the right track rather than scrabbling around and probably getting it wrong and ultimately losing money eventually down the line. So you’re better to pay somebody who’s an expert to come in and help you.
Ruth: You’re definitely better to pay. I think in the context of people who, yes at the beginning people are like oh I’m starting up, I’m not making any money so I’m not going to invest until I’ve made money and actually that’s the wrong mindset because investing will help you make money. Lots of people don’t have any business skills. They’ve never written a business plan. They don’t understand marketing. They don’t understand KPIs. They don’t understand the basics and I was really surprised when I started out, actually, how few people understood because I studied business and I was a Business Studies teacher. There’s this really romantic vision that you’re going to have a coffee shop and it’s going to be really lovely but actually it’s going to be hard work and you need to know your numbers and you need to understand you need to market it and you need to hire a team and do all of these things and get your pricing right. So it’s not something I’d jump into straight away. Saying that, it can be absolutely amazing but the reality is often not what we imagine when we’ve got those rose-tinted glasses on.
Prosperity Kitchen: Yes. No I think you’ve said that correctly. Some people, and good on them, freakishly do start a business and it just whoosh, it goes, because they’ve got this particular product or service that is hot and they scrabble around and they make it work and they do very well but I would 100% agree with you that I would put my neck on the block and say 90% of businesses have to have a strategy in place and know your financials. Otherwise it’s likely that you’re going to run into difficulties. Not everyone. It’s a general statement. But for most people. And we’re not being negative. It’s just the reality isn’t it Ruth?
Ruth: Yes and it’s not being negative because you’re saying ‘actually before I go into this I’m going to get that sorted so that’s not a problem for me’. And as you said 90% of people do need that strategy and having that strategy is a safety net. Understanding, right this is where my money’s coming from, this is how I’m going to support myself, will give you a lot more head space to focus on your business.
Prosperity Kitchen: Yes. And do that whilst your still in paid employment. Do that due diligence. Do the research before you press the button on leaving a career where you’re getting paid, research what you want to do thoroughly – in an ideal world that’s what you should do but I appreciate that for some people that’s not always the case. OK. So what are the essentials that you would think or do think that somebody needs if they are going to leave paid employment to set up their own business?
Ruth: It’s pretty much the same. I think that you need to have a really good understanding of your financials. You need to have a plan for your marketing and then you need to be able to take action. You don’t need to have qualifications or anything like that. It’s more about having the right mindset. So being in the right place mentally, that you’re prepared to take risks and you’re prepared to take action even when you don’t feel like it but also making sure, I say this all the time to people and people still don’t do it but making sure that you understand the numbers and it’s like when you have anything done on your house – add 20% because there’s always things that you don’t think about that will crop up. So add 20% and go for it and go for it. Make sure that you know what you’re do§ing that you’ve got some kind of direction and strategy and then do it. Take action. And if you can’t do it on your own, work with a business strategist or coach or mentor to help you have that in place.
Prosperity Kitchen: Yes. I think the number one thing, aside from the financials and the marketing, is the mental agility and the resilience because if you’re going out on your own, unless you have got that business that does literally take off, which is brilliant if you do, most of us have to work at growing our businesses and it does involve resilience because there are going to be bad days and there are going to be days when you’re knocked back or things are not going your way or you’ve lost money and you have to be able to bounce back.
Ruth: Yeah you really do have to because if you don’t then you’re not going to have a business. If you take everything personally, if you see every failure as something that’s going to sit with you forever, you’re not going to have a successful business because you’re going to spend all your time wallowing.
Prosperity Kitchen: Which leads us nicely into the next question. What will be the main challenges that a listener will face if they’re going to set up their own business?
Ruth: Oh wow, so when you set up a business it is literally like the most intense therapy you can ever have. Even, obviously, we’re in the personal development space so we know about that kind of thing but any kind of business, because you are basically betting on yourself every single day. So you’re going to start to notice behaviours and things about yourself that you could have kept hidden in the world of employment. So you’re going to have a big journey personally around who you are, how you operate, what your pressure points are, how resilient you are, so that is going to be the hardest thing. That journey that you’re betting on yourself and you’re putting yourself out there because as humans we don’t like change. We like to stay comfortable and what you’re doing is you’re going way beyond your comfort zone and so it is going to be uncomfortable. It is going to be messy at times. I’m sure there’ll be tears or shouting or hiding under your duvet but, equally, it’s going to be incredibly rewarding. So be open to the fact that, and nobody ever believes me when I say this, I’m sure that you agree Gemma, be open to the fact that it’s going to be you that’s going to be the biggest obstacle in your business and it’s going to be you that you’re going to do the most learning about. More learning than about coffee beans or coffee shops or whatever it is you’re doing, your biggest learning when you’ve got a business is about you and how you operate.
Prosperity Kitchen: Ooh I want to high five you down the computer.
Ruth: It’s absolutely true. No-one ever believes it. So many people say ‘no I don’t have any problems with my mindset’ and then whenever anyone says that to me I’m like ‘hmmm’.
Prosperity Kitchen: Yeah. I could talk to you about that. The fact of the matter is, every single person walking this earth is going to have some, how can I put it, not some issue, we all face challenges – personal challenges. That’s life. And particularly when you open a business, like as you just said, you are putting yourself out there and for the more weak-hearted it is a big shock if you’ve never done it before and you’ve got to back yourself. You’ve got to rate yourself. You’ve got to be your own PR, marketing, financial manager, everything rolled into one and more importantly you’ve got to keep yourself motivated and, like you say, it’s the person who is the biggest challenge to them. It’s not getting customers maybe. It’s not making the money. It’s actually getting yourself into a state where every single day you can come to your desk and literally just get out there and that can be the hardest thing.
Ruth: Yeah it really can.
Full Podcast Interview with Ruth
And the interview continued onto how to leave your job to start a business and you can listen to the full interview here.
Summary – What You Need to Know Before Starting Your Own Business.
So in summary, we advise:
- Get work experience in the business you want to open.
- Speak to people who are in the business that you want to be in. How do they find it? What’s their advice.
- Do basic financials and have a strategy in place. For example, what will my rents and rates be, staff costs, equipment hire and stock cost? How much will I need to sell to make a profit.
- Pay the experts to help you where you can. It’s worth it.
- Accept that in most cases, it’s going to take time to make a profit.
- Learn about mental agility and resilience.
- Got a Coach! Of course I’m going to say this BUT it’s vital.
I hope this helped you.
Gemma is a leading Life Coach & Business Coach, Award Winning Podcaster and the owner of Prosperity Kitchen. Regularly featured in the national press, Gemma is one of the “go to” people on Life Coaching & Business Coaching. Gemma counts VIPs, High Net Worth Individuals, Entrepreneurs, Career Professionals, Stay at Home Parents and all manner of other amazing people as her clients.
She specialises in Personal Development, Career Coaching, Employee Coaching, Executive Coaching, Confidence, Motivation, Health and Small Business Coaching
Ruth Kudzi is a business mentor, mindset coach and best-selling author who has worked with 1000s of clients worldwide. She combines practical business skills with a MA in Psychology and numerous coaching qualifications including NLP to help her clients build businesses they love.
Ruth works with coaches, consultants and service providers to help them build and scale their businesses and has been seen in The Metro, Women & Home, The Guardian, Psychologies, Thrive Global, Huffington Post and Business Insider.
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