The grass seems very green over there…
If you’re working for a large company, you may read stories in the press about teenage whizz kids and young entrepreneurs who set up their own businesses through crowd funding, achieve rapid success and sell their businesses for a crazy amount of money.
Having read about them making more than they need to comfortably retire by their mid-twenties, you then think about what you could achieve, how much you could make and how much easier it would be for you – given your experience and contacts.
If that’s you, don’t be surprised if you discover entrepreneurs and sole practitioners looking back in your direction, envious of your position within a large organisation. They see a regular paycheque, regular working hours, paid leave, gym memberships and all the other perks that come with working for an institution.
Of course, neither scenario is entirely accurate or usual. The grass is always greener on the other side. Life within a large company can be tough, with many people working a 70-hour week as opposed to the 40-hour week they’re paid for. Add to that the lack of control and the daily game of company politics and it’s anything but an easy life.
Working for yourself is no guaranteed picnic either – especially to begin with. If you’re setting up your own business you have to ask yourself the question ‘am I prepared to give up a regular, predictable salary and live off a survival budget until business takes off?’
If you are, then you have to figure out what a real survival budget looks like. We’re supposed to live to a budget at all times but a real survival budget is a seriously bare bones affair – with no spending (or savings for that matter) except on what will keep you and your family alive.
No car, no phone contract, no credit cards, no TV package, no new purchases (save food – which is now economy packs of rice and pasta). You might not imagine things being so severe and hopefully they wouldn’t be but the point is: are you prepared to live this way if that’s what it’s going to take?
It’s a useful exercise for anyone to do. Working out your bare bones survival budget doesn’t necessarily mean you have to adjust straight into it. Once you’ve worked out what your minimum expenditure is, it gives you an indication of how long you can survive for without any income. Useful even if you decide against starting your own business, but if financial disaster was to come at you from some other angle.
We all know the grass isn’t as green as it looks. Imagining that the whole area is a wasteland devoid of any grass is not an attempt to depress you, it is an exercise to prepare you. Backs-to-the-wall survival may not materialise, but if you’re not prepared for the toughest of journeys it may not be wise to set out. If you’re mentally prepared to make grass grow in the most arid of deserts then it may be time to step over the fence.