You Don’t Need A Business Plan To Start Your Side Hustle

After nearly a decade of my traditional corporate career, I did the thing that social media dreams are made of — I quit my day job to turn my side hustle into my full-time job. I went against conventional business advice, and was still able to build a six-figure business from scratch.

Data from the U.S. Census Bureau shows 5 million businesses were started in 2022, and more and more corporate employees are contemplating leaving traditional career paths for entrepreneurship.

Because I Invested My Own Money, I Never Needed A Formal Business Plan

The first thing I learned in business school about starting a company was that you must write a formal business plan — to show that heavy document to a bank, a venture capital fund, or to your family to borrow money for startup capital.

If you are going to quit your current, stable job, it definitely helps to have more than a few ideas in your head. But I’ve personally taught so many aspiring entrepreneurs who get overwhelmed by the idea of business plan that they never start at all.

I started my current business, a company entirely predicated on traveling as a speaker in front of large mass audiences to teach financial education, the same way I paid off $300,000 of debt in three years. What could possibly go wrong?

That was January 2020. As the Covid-19 pandemic hit, I quickly had to pivot into a new business model. Now in my fourth year in business, my financial education company has made more than half a million dollars in revenue with thousands of students participating in my programs.

I never actually wrote a formal business plan back then. But I did wait to have my personal finances in order so I could be my own investor, rather than borrow someone else’s money. Looking back at how 2020 unfolded, any new business plan I would have written would quickly have become obsolete.

Without A Plan You Must Assess Your Own Risk Tolerance

According to a KPMG Women’s Leadership Study, only 43% of women are open to taking bigger risks associated with career advancement, and that’s within a stable corporate career versus the unknowns of entrepreneurship.

Becoming debt-free allowed me to start a business without a fully formulated plan because it took a huge amount of pressure off how much I would need to earn in my early years. And it trained me to think more creatively to cover business expenses, in the same ways I did with my personal expenses when I paid off $72,000 of student loans a year after graduating from my master’s program.

It’s helpful to use available tools to assess how much you’re willing to put on the line for your own business, also known as your investment risk tolerance, and take that quiz once a year to see how you might change over time.

I personally took a Rutgers University quiz that helped me understand my investment risk tolerance is below average. This motivated me to take other steps in my personal finances to calm my nerves while I was ramping up my business.

Declutter Your Personal Finances To Leave Room For Inevitable Trial And Error In Your Business

Aside from paying down debt, I was also able to reduce my financial risk by pausing the use of credit cards, streamlining bigger budget line items (like selling one of our cars) and having emergency savings set aside.

I don’t suggest that you need to do this, but I even took the aggressive approach of paying off my mortgage prior to 2020. This helped me think, “even if my business fails, I’ll still have the roof over my head.”

It wasn’t until December 2020, almost a year after I started the company that I had a clearer path to revenue and consistently made $10,000 a month. Until then, I was testing (and failing) different iterations of my products and services.

Having fewer living expenses was incredibly valuable in keeping me calm while others were asking for forgiveness or forbearance on their mortgage loans during the pandemic.

My financial education company has since grossed more than $500,000 in revenue, more than I would have made in my full-time corporate job. Becoming a solopreneur has helped me not only stay debt-free, but also become a millionaire in my thirties, travel globally and reach my financial independence goals.

I’m glad I didn’t wait until I had the perfect plan to get started, and grateful that I set up my finances to invest more time, money and energy to grow my business. The hardest part is often just mustering up the courage to give it a try.

Source: Forbes.com