Embarking on the entrepreneurial journey is an adventure filled with excitement and uncertainty. One of the most daunting uncertainties is financial stability. As an aspiring entrepreneur, you may find yourself asking, “How will I support myself while I bring my business idea to life?” I understand this concern deeply, not just as a business coach but as someone who has walked this path.
In this article, I’ll share with you five strategic approaches I’ve learned and lived—each capable of supporting your lifestyle while you’re building your startup. From the wisdom of saving to the innovative concept of geographic arbitrage, these strategies are designed to help you maintain financial equilibrium on your path to becoming your own boss.
But financial strategies are only part of the equation. Many of you also share the concern of not having a business idea to start with, or not being sure if the one you have is the right one. That’s why I’ve created “Mastering Startup Ideas: From Discovery to Validation,” a program to help you discover and validate your startup ideas, ensuring you’re building on a foundation of passion and potential.
Let’s dive into these strategies and get you on your way to financial readiness and entrepreneurial success.
Strategy 1: Build Your Safety Net
In the high-stakes arena of entrepreneurship, saving might seem old-fashioned, but it’s the unsung hero of startup stability. This realization hit me at 25, thanks to T. Harv Eker’s “The Secrets of the Millionaire Mind,” which taught me to “pay yourself first.” By consistently setting aside 10% of my income, I built a robust financial backbone, a practice especially critical for entrepreneurs who face unpredictable income streams.
My MBA at INSEAD drained much of these funds, yet the habit of saving endured. Back in the workforce, I replenished my savings, paving the way for my confident dive into entrepreneurship.
For those on the brink of this journey, knowing ‘your number’—the total you need to support a year of your life—is essential. Total your monthly must-haves, adjust your wants by half, then multiply by twelve. That’s your savings target before you jump into startup life. Intimidated by that figure? Don’t be; the upcoming strategies will help you reach it more quickly.
Though a year’s worth of savings seems daunting, it’s merely a goal to work towards. If you’re just beginning, take that first step now. Aiming for at least three months’ worth is good practice for anyone, but as a future entrepreneur, strive for that full year’s cushion—it’s the financial empowerment you need to innovate freely.
Don’t let the fear of financial instability hold you back. Start building your entrepreneurial safety net today. And as we unpack the next strategies, you’ll see there are many ways to reach financial readiness for your startup venture.
Strategy 2: Diversify Your Income Streams
Embracing entrepreneurship doesn’t mean you have to quit your day job cold turkey. In fact, a gradual transition can often be the smarter move, providing financial security as you build your business. This is where diversifying your income streams becomes essential.
The Power of Part-time
When my co-founder began his entrepreneurial journey with Le VPN, he opted for the steady path, transitioning from full-time to part-time work. This allowed him the breathing room to focus on our startup without the immediate financial pressures. And for me? I took the plunge into entrepreneurship headfirst, but I’ve seen the benefits of both approaches firsthand.
Consultancy: Leverage Your Expertise
Consultancy can be a lucrative bridge between employment and entrepreneurship. By selling your expertise for a few days each month, you could cover your living costs, freeing up the rest of your time to concentrate on your startup. And the best part? You often can command a higher price for consultancy, reflecting the high value of your specialized skills.
Finding Clients in Familiar Places
Your existing network is a goldmine. Often, your first clients come from within this circle—even your former employer might become a client. It’s all about leveraging the connections you’ve already built.
Freelancing and Side Hustles: The Gig Economy
In today’s gig economy, platforms like Upwork have made it easier than ever to find freelance work that can supplement your income. Whether you’re a developer, designer, writer, or consultant, there’s a demand for your skills. But be cautious; while freelancing offers flexibility, it’s vital to remember the end goal: building your own company, not just replacing one job with another.
As you explore these options, consider them stepping stones. They’re not just about making ends meet; they’re about strategically positioning yourself for the full entrepreneurial leap. Each dollar earned and saved is another brick in the foundation of your future startup. Navigating Time: My Time-Management Hacks When Starting a New Business would also be helpful in learning how to manage time and build a successful entrepreneurial career.
In the next strategy, we’ll discuss the lifestyle choices that can further bolster your financial transition to entrepreneurship.
Strategy 3: Lifestyle Downshifting and Smart Housing Choices
Entrepreneurship often demands sacrifice, but it doesn’t have to mean giving up everything. It’s about making smarter choices that align with your long-term goals. For some, this means adopting a minimalist lifestyle, for others, it’s about getting creative with their living situation.
Embrace Minimalism
Downshifting doesn’t necessarily mean downgrading your life; it’s about prioritizing what truly matters. It could be as simple as moving to a more affordable but still comfortable home, or finding joy in the free experiences life has to offer, rather than the expensive ones.
Leverage Your Living Space
Consider the potential of your current living space. Could it become a source of income? When I co-founded Le VPN, I faced a stark choice: maintain a costly Parisian lifestyle or find a way to make my living situation work for me. The answer came in the form of Airbnb. By renting out my Paris apartment and moving to a country with a lower cost of living, I was able to support myself and fund the early days of my startup. This strategy not only provided financial relief but also the rich experience of living abroad.
The Benefits of Relocation
Relocating isn’t for everyone, but for those who can, the benefits can be substantial. A cheaper country doesn’t always mean a cheaper life. In my case, moving to Argentina meant that I could live comfortably on a fraction of what it cost in Paris, while still earning rental income from my French property. This approach isn’t just about saving money; it’s about exploring new horizons and gaining experiences that can enrich you personally and professionally.
In our next strategy, we’ll look at how moving to a country with a lower cost of living can not only maintain but even enhance your lifestyle, all while saving you money that can be reinvested into your budding enterprise.
Strategy 4: Embrace Geographic Arbitrage
In today’s evolving landscape, the ‘future of work’ is not tethered to a single location, especially for the modern entrepreneur. Geographic arbitrage—relocating to a locale with a lower cost of living while maintaining your income level—can be a strategic boon as you build your startup. This approach is about downshifting expenses without downgrading your lifestyle, and for the remote worker, it’s about leveraging the freedom to work from anywhere.
Cost-Effective Living Without Sacrifice
Relocating to a less expensive country can drastically reduce your monthly outgoings, enhancing your ability to save or invest more in your business without sacrificing lifestyle quality.
My time working in a corporate role in Bali exemplifies this perfectly. Not only did I advance my career and significantly boost my savings, but I also enjoyed the luxuries of living in a villa with a pool and indulged in a vibrant social and wellness lifestyle—all on a budget that would barely cover rent in a major Western city.
This strategic move wasn’t just about the financial gains; it laid the groundwork for my entrepreneurial venture a year later, aligning with the ‘future of work’ model that promotes remote work and working from anywhere with internet access. Embracing this approach allowed me to channel the saved resources into my startup, exemplifying the benefits of geographic arbitrage.
The Remote Work Revolution
The shift towards remote work has opened up a realm of possibilities for entrepreneurs. With just a laptop and internet access, the world becomes your office, providing the chance to cut costs while exploring new cultures and markets. This mobility is more than just a perk; it’s an asset for any businessperson looking to understand the global market.
Reaping the Benefits
The benefits of geographic arbitrage extend beyond personal savings. Living in a new culture fosters creativity, adaptability, and innovation—all traits beneficial to an entrepreneur. It provides exposure to new business ideas, potential markets, and networking opportunities that might not be available back home.
As we look ahead to the final strategy, remember that leveraging the ‘future of work’ concept and embracing geographic arbitrage can be a game-changer for your entrepreneurial journey, giving you the financial and lifestyle freedom to focus on what truly matters—building your dream.
Strategy 5: Harness Social Safety Nets
The leap into entrepreneurship is often a leap of faith, but it’s a leap that can be cushioned by the social safety nets available in many countries. These programs are not merely fallbacks; they’re trampolines that can launch you toward your business goals.
Social Programs as Entrepreneurial Springboards
In some countries, like France, unemployment benefits are structured to support not only those seeking employment but also those aiming to create it. When I founded Digital Consulting Lab, I tapped into these resources, which replaced a portion of my previous salary while I built my business. This governmental support acted as a financial bridge, allowing me to dedicate myself fully to entrepreneurship without the immediate stress of personal revenue.
Beyond the Monetary: Knowledge and Networks
These programs often come with additional resources, like startup advisors and mentoring, which can be as valuable as the financial support. Leveraging this expertise helped me to navigate the early stages of my business more effectively, even though I had prior experience. It’s a testament to the fact that there’s always more to learn, and every bit of knowledge can accelerate your progress.
The Broader Picture: Building Your Business with a Net
Exploring the social safety nets available to you can provide a degree of security as you build your startup. It’s about more than sustaining your livelihood; it’s about empowering you to take calculated risks with the backing of a supportive system. These programs recognize the value entrepreneurs bring to the economy and society, and they’re an acknowledgment that your success as an entrepreneur is a collective success.
As we wrap up our strategies, remember that transitioning from a 9 to 5 job to entrepreneurship doesn’t have to be a solitary or an unsupported endeavor. There are structures in place to support you, and when combined with your savings, part-time work, smart housing choices, and the possibilities of remote work, you’re not just dreaming of a new future—you’re actively building it.
Conclusion: Combining Strategies for a Foolproof Plan
We’ve navigated through five distinct financial strategies, each with the potential to stand alone and make a significant impact on your entrepreneurial journey. However, when woven together, they form a comprehensive, fool-proof plan that allows you to live the dream lifestyle while building a business fueled by passion.
I understand the apprehension around finances that often accompanies the leap into entrepreneurship. It’s my aim to dismantle those fears, paving the way for a journey marked by innovation, not financial stress. And while securing your financial footing is crucial, I know another pressing concern often lies in finding that one business idea that sets your heart ablaze.
That’s precisely why I developed “Mastering Startup Ideas: From Discovery to Validation.”
This program isn’t just about finding any idea; it’s about discovering the idea that speaks to you, that aligns with your values, and holds the promise of success.
Your Invitation to Discovery and Success
For a comprehensive guide on leveraging mentorship to accelerate your business growth, download my free resource: How to Leverage Mentorship For Startup Success.
Thank you for exploring these strategies with me. With your financial strategy in place, bolstered by a community and a course designed to bring your business idea to life, you’re more than ready to step into the world of entrepreneurship with confidence.
