For those of you who have read my ‘About Page’, you will have seen that I worked as a Procurement Manager for a large corporation for many years. As of yesterday, that is no longer the case. I decided that this business (Advice and Beans) was doing well enough that I would make the leap of faith and do it full time. As some of my earlier posts have alluded to, I believe that anyone with a dream, the willingness to work hard, and the blessings of their creator, can build something of their own. As I knew that my relationship with my previous employer was getting tenuous, I made preparing for the inevitable move my number one priority for about the last 6 months. In my opinion, employment status is one of the biggest reasons to make preparedness a part of one’s life. Here are some of the things I did to get ready for the day when I would have to leave my day job:
1) Have a plan – While I hoped that Mylar Bags and Oxygen Absorbers could be a full-time job, I also know the risks of putting all of my eggs in one basket. I actively searched out new product lines (Such as the Gamma Seal Lids, buckets, desiccant, Rothco and some others I haven’t even gotten around to selling yet), started some basic advertising, and worked pretty much all the time. While working 16 hours a day is not the way I want to live my life forever, I knew in this case that for every day when I had two incomes coming in, it would better prepare us for when one of those went away. Even if starting a business is not your thing, a part-time job never hurt anyone! The steps below were additional parts of the plan.
2) Save, save, save – Even prior to starting Advice and Beans, my wife and I always saved a good portion of our pay, upwards of 30% or more when we could manage. When I knew I might have to leave my job, that number became more like 50%. Living on less than you make is the best, and some say only, way to build financial security. While it has been easier in recent years due to rising income, dual income, and becoming debt free, I made saving a habit even when I was making $8 an hour as a temporary 12 years ago. Every paycheck, I put money in an envelope, whether it was $5 or some weeks $20. Having even that little savings available to handle some basic emergencies is a lifesaver and can save you from having to put it on a credit card. Some folks say there is never enough money for them to save, and that can be true if you pay yourself last all the time. Pay the savings envelope first when you get paid, and anyone can do it.
3) Give Things Up – My wife and I, while we have some nice things, are also willing to sacrifice when we need to. We cancelled our cable TV over 2 years ago and have saved over $2000 by not having it. I gave up Dunkin Donuts coffee every morning at work, saving $500 a year. Additionally we sold and continue to sell a huge variety of stuff in our household. Books, movies, games, collectibles, we sell all of it. And not only did that make us some extra money to save, it also cleared much of the clutter from our lives. Giving up any one thing might not make one financially secure, but making some regular cuts or selling things you might not use often can help your budget a great deal.
4) Do Something, Anything, to Make Some Extra Money- My original goal with Advice and Beans was to make an extra $20 a day. I figured an extra $7000 a year would make a great difference in my families financial condition. Starting small also meant not writing huge checks and taking unnecessary chances. So in the beginning, I would buy a case or two of supplies and try to sell them on eBay and Amazon. Once I sold out of those, I rolled that money over until I could buy 5 cases at a time and get a better price. Eventually it got the point where the business, while not generating any ‘income’, was able to buy larger and larger increments of inventory, up to and including multiple pallets nowadays, drastically improving our buying power. I say this to make the point that while sometimes risk is good, it doesn’t have to be a part of starting a business as I’ve heard some say. Sure, I could have started out writing $10,000 checks to suppliers (well, not too many of those)…but only at an unacceptable risk to my family. So for those who are thinking about starting a business…start small and cash-flow your way to big. That’s infinitely better than writing some huge checks only to find out you have no market for whatever it is you want to sell.
This whole adventure demostrates exactly why we (or at least I) prepare. Having a couple of years of food on hand certainly provides some comfort in knowing that if the business goes sour, at least I can feed my family. I’ve learned some new skills, such as researching suppliers, doing complicated taxes, and dealing with beauracracies (oooh, my favorite part!). I’ve also learned a bit of patience and adaptability…especially these last few months when my best suppliers all flaked and went out-of-stock. When I didn’t have big oxygen absorbers, I substituted mediums; now that I am out of mediums, I am substituting smalls for some SKU’s. The point is to keep moving forward and building momentum, even when it seems things aren’t going great.