Q. Dear Zenagos,
I started my own coaching business about 6 months ago. I’m getting great clients and things are going really well, but I’m just not getting them fast enough. I’m running out of money. Should I just give up and get a job?
At Zenagos, we hear this question several times a month. Starting a new business is a struggle, and it is common to hit a point when you need more cash or you can see your cash savings (or “runway”) running out. Getting a new business going always takes longer than you think.
You’re Not Alone
It is normal for the entrepreneurial personality to do things a little out of order: ready, FIRE, aim! It is not unusual for a first-time entrepreneur to just take the leap and try to fly the plane while they are building it. Most mentors will advise a new entrepreneur to have enough cash in the bank to run the business for six months. The truth is that it usually takes about two years to get a business humming, and that’s if you manage to avoid the most common mistakes.
Don’t Beat Yourself Up
It would be nice if you had saved two years’ worth of cash before launching your business, but almost nobody really does that. In any event, it achieves nothing to beat yourself up about what you’ve already done. Start where you are, and move forward.
Do the Math
Figure out how much time you have by doing a weekly cash forecast. If you don’t know how to do this, get a mentor. You can get a free mentor from SCORE. Make sure you let them know that you are worried about your cash runway. Once you have figured out how much time you have, this will help you decide about whether to get a job.
Lots of Entrepreneurs Have a Side Hustle
If you need to get a job, that’s okay. The ideal situation is to find a way to do contract work, so you can continue to work on your business. If you are seeing progress on the business, try to find a job that lets you keep building on that progress. You may need to make some tradeoffs or get some help from other people in your life. Most entrepreneurs get help from others along the way. It’s okay to lean on your support network.
Be Honest with Yourself
Entrepreneurs have a tendency to think that they are “almost there,” so you need to be honest with yourself. Set a deadline by which you will have reached some specific milestones. For example, “In the next two months, I will get 4 new clients.” Set an appointment with yourself at the end of the two months, and be honest. Did you get the 4 clients? Did you make any progress at all? If you don’t hit your own deadlines, this is a sign that you may need to move on from your entrepreneurial venture.
Only you have the information you need to decide the best path going forward. If you have people who depend on your income, then you may need to wait until a time in your life when you can handle more financial risk. If you don’t handle stress well, then you might be better off taking a job that provides a predictable income. And, your decision does not need to be permanent. If you need to step back and regroup, just remember that you have learned a great deal by launching your own business. You will be a better employee now because you have stretched yourself, and you will be better prepared if you try entrepreneurship again in the future.
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