Sometimes I feel a bit schizophrenic, on one hand encouraging people to
not stress so much about leaving their corporate job to start a
business, and on the other hand feeling extremely uncomfortable about
all the "start a business in 30 days in your bathrobe" nonsense that
permeates the internet.
Sparked by a blog post my good friend and fellow entrepreneur coach Philippa Kennealy wrote called Can you maintain your income as an entrepreneurial physician?, I invited Philippa as a guest for this week’s podcast on realistic expectations for making money in your startup business.
Find it here – it is about 38 minutes long.
Like anything in life, you will have people at every end of the
spectrum, some who get lucky making tons on money in their first year,
and others who take a decade to make serious cash.
In this interview, I talk to Philippa about:
- Her own experience building both a coaching practice and a coaching business (there is a difference, which she explains!)
- What she learned by launching The Entrepreneurial MD,
a coaching business focused on helping physicians learn business
skills, enhance their medical practices and start new businesses - They key questions to ask before launching a business
- Realistic time frames for getting your income flowing after launching your business
Our advice may seem a bit conservative to some of you who have big
plans to make a huge sum of money your first year in business. My
response is threefold:
- If you can make a huge sum of money your first year in business, do it. Don’t let us or anyone else stop you.
- Faster is not always better.
There are really great things that result from taking the time to plan
and launch a business. For people that have a lower tolerance for risk
(financial and otherwise), slow and steady growth can be a lot less scary and more
rewarding than an all-or-nothing 100 yard dash. - If you think it is easy to make huge piles of money your first year in business, you may want to test your assumptions.
Real world testing is the best … launch a small product, do a
consulting gig or two, try to get some new clients on the side of your
day job. I hope I am wrong and response #1 applies to you. But I
would rather you temper your optimism with realism than fall on your
face and lose more than you need to.
I am curious what you think of the conversation.
Monetizing your sites is a great opportunity to make tons of money. Always make sure prospects will be enticed to buy or click. Remember that your visitors do not pay attention to all banners placed on your site but rather to the information that they can get from your website.
Hi Pam,
I just managed to find this podcast recently. Just thought I’d say a few things:
1) I greatly enjoyed it. It was greating hearing from both you and Philippa.
2) I know that doing interviews is harder than blog posts but I enjoy them. I suspect that we, your readers (blog and book), forget to say thanks for things like this enough.
3) In the interview you asked for feedback regarding interviews in general. I listen to several podcasts or interviews each week and I really enjoy learning from you. So, if you are still interested in opinions, my vote is for more interviews. I also enojy your non-interview podcasts, too.
Have a great one!
Mike
Great job Pamela (and Philippa). This is only the second podcast I’ve ever listened to (in my life, not just yours!) and I’m definitely going back for more.
I’m in start-up mode with two businesses, one a freelance service business and another an online store. Despite the business planning and a marketing background, I found myself smack up against my expectations of what kind of income and success I would have after launching. I didn’t realize the extent to which I had integrated the “get-rick-quick” mentality of being an entrepreneur until I was several months into it and wondering why my phone wasn’t ringing off the hook.
Thanks for putting this out there and for all the work that you do. I’ve linked to your blog from mine (Ditch the Dusty Widget) and appreciate all that you offer to us ambitious entrepreneurs!
Our software company Practice Velocity (www.practicevelocity.com) is a startup company, that grew out of our own startup urgent care business (www.physiciansimmediatecare.com) and has helped over 50 startup urgent care centers reach peace-of-mind profitability. The keys to success can be summarized in a few points: 1) provide a service (or make a product) that people need, 2) deliver that service (or product) in a way that produces more value for the customer than anyone else, 3) make your number one goal to build a great business (not to pay yourself), 4) work harder than you ever thought you could and anyone else thinks you can, and 5) work even harder.
To my observation, the more “professional” the business, the longer it takes to get it started. Personal service businesses like dog walking and house sitting can potentially make as much money as businesses such as coaching and consulting. The “credibility-building” stage is much shorter. For some people, that’s not appealing, as being “professionals” is part of their identity that they don’t want to discard when they leave corporate America. I have known (and hired!) other corporate workers who felt liberated by leaving that sort of persona behind.
Hum along if you like….”Money, it’s a crime. Share it fairly but don’t take a slice of my pie. Money, so they say Is the root of all evil today. But if you ask for a raise it’s no surprise that they’re Giving none away.” (thanks Mssrs. Floyd)
“They’re not giving none away” that kind sums it up — you gotta work for it, very hard (12 months of smart 16hr days 7 day weeks for me). And that may not even be enough 🙁 Pam as you know I got canned (rightfully so from good job I hated 3/7/07) have to tell you this I now LOVE almost every minute of what I do @ Buttons of Hope.com BUT money still rules — I am pretty much on financial fumes & without a minor (estimated $50K) money miracle I will probably be headed back to the cubicle (doubt they’ll take me)…yikes!
I know pity alert!! Thing is I wouldn’t change much about my business model or how I tried to pursue my remarkable idea (purple cow, permission et al) BUT thing is in the end whether your an entrepreneur or hang dog daddy in a cubicle it seems IT IS ALWAYS all about the money! I know it’s a downer [sorry bad week] but there can also be a slap in face reality to escaping — kind of like a prison break — now your out there in a field in orange pajamas with no money or car, the escape was exhilarating…survival and evading recapture…well that’s another story! I know your writing a book make sure you include a chapter on this ~ possible title “Standing here in orange PJs, What now?
Back to Mssrs. Floyd…”Money, get away. Get a good job with good pay and you’re okay. Don’t give me that do goody good bullbleep.” Be careful out there, plan your escape, you better you bet!
Nicole Richie went birthday shopping for her baby daddy Joel Madden yesterday in Hollywood! Joel turns thirty today!
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You can take it slow or make a running start towards the precipice, but either way you have to take that first step.
Today I read a great “I’m quitting my job” post by Jeff Atwood of Coding Horror http://www.codinghorror.com/blog/archives/001074.html. He didn’t even intend to leave his job but his blog became so popular that he reached escape velocity anyway.
Even if you have to take entrepreneurship slow, it’s clear that you need to be putting yourself out there by blogging sooner rather than later.
Also, Chris makes a good point above. It’s much better to build products to sell. Consulting doesn’t scale (unless you plan on hiring lots of bodies), and it’s much harder to cash out of a consulting business.
First of all, thanks for the great post.
Second of all, I’m glad you put the first disclaimer in. I personally believe that it’s totally possible, in some cases, to go out there, start an all-new business, and do pretty well for yourself from the first year and even the first few months.
The way to do this is *not* through consulting but through creating products and services that can be at least 70% automated.
Sometimes, taking it slow and steady is actually the wrong way to go. It’s the right way to go slowly broke, but that’s not what you want, right?
This is a great topic. Based on my freelance experiences, you’ll loose money for the year or two. It takes a few years to build your brand momentum. If your business is coaching/consulting or service based then you might never make the big bucks. With this model you have very little scale in your system. You are limited by the hours in a day and number of clients you can work with in a day. Having products like a website, e-book, subscription services is a good way to scale this type of business.
I think it really depends on the situation. If you can find an untapped market, sometimes going all out makes sense. There is an advantage to the first mover in a market. However, the difficult part is find an untapped market. Personally, I’ve tried both and my most successful company is the one I’m running part time right now. I sort of fell into the market on accident, and really didn’t try to turn it into a business until about a year into it. I didn’t think there was sufficient interest to make it worth pursuing with a lot of energy. I was wrong about that one!
Pamela,great post. I agree whole heartedly,slow and steady is the course. The ole
“Rome wasn’t built in a day thing”. I’ve started and it’s a slow go, I’ve been at it two months lots to learn.