They say, “Follow your passion and the money will come”. In the tech world, a similar proverb might be, “Build it and they will come.”
I will tell you from experience that this is a lie. Well maybe not entirely. Sure, if you are passionate about something and work really hard at it, you can develop skills and expertise that have marketable value. But unless you have a way of marketing your passion, you can just as easily spend a lot of money on it, and never make a cent.
This is not a business. The IRS allows you to write off 2 years of business losses, after which the IRS considers your “business” to be a hobby. And continuing to write off business losses beyond these 2 years will only increase your risk of being audited.
But What About Passion & the Law of Attraction?
Some of the staunchest, bright eyed, crystal wearing Law of Attraction gurus might say, “Well, you weren’t attracting success because you weren’t focusing hard enough about it, you haven’t activated your personal power,etc…” And if you did so:
- Success will rain from the sky like manna from heaven, and / or
- You will at least win the lottery and / or
- You will manifest an angel investor discover your incredible talent who will pour money into your avante garde performance art business.”
Well you know what?
It’s important to keep passion and the Law of Attraction in perspective. Yes! Passion is a powerful motivator. Yes! The Law of Attraction has worked for me many times.
Self help books, life purpose workshops and motivational seminars abound to siphon away your hard earned dollars so you can connect with your inner power, true calling and even help you vision board / mind map your path to fulfillment and success. But a vision board is no substitute for a business model. And a business plan does not guarantee business success.
And you know what? Those feel good workshops are awfully addictive. There’s nothing more awesome than coming out of a transformational workshop feeling like you can change the world. And once that feeling starts to ebb away, there’s this other transformational workshop by another guru who has just we you need. But at a certain point, the reality starts to sink in – who’s the one making all the money? The guru holding the workshop, perhaps?
There’s nothing wrong with following your passion. You owe it to yourself to be a passion-based entrepreneur. But passion-based entrepreneurship is made up of two components: passion and a monetization plan.
When Does It Make Sense to Turn Your Passion Into a Business?
As a person with a corporate day job, a strong entrepreneurial streak and various side hustles, I’ve been reflecting a lot about when it makes sense to quit your job and follow your passion. I’ve talked to all kinds of entrepreneurs about this. Here are the different camps and my thoughts about them:
Don’t Quit the Day Job Until the Side Job Catches Up
Most entrepreneurs I’ve spoken to strongly recommend keeping the day job as long as humanly possible until the side hustles generate a sustainable income. This is a very wise and safe approach. However, you need to be aware of the tradeoffs:
- Less sleep
- Elimination of social life and / or romantic relationships if you are single
- Dropoff in exercise regimen
- Decline in health consciousness in favor of prepared foods
- Decline in cleanliness of your abode
- Degradation of your attention & stamina in both your day job and your side hustle
I’ve met a few entrepreneurs who have done this successfully. One thing I noticed they all had in common was the presence of a supportive life partner. You see, this is much easier to do if you have a partner who agrees to take on all responsibility for life drudgery – cooking, cleaning, making sure the car gets fixed, kids get to school, etc. so that the other can 100% focus on getting the side business to monetize.
Better yet, if your life partner also happens to be your business partner, not only are you able to cohabitate and share chores, if he handles all the web development and she handles all the online advertising and customer relationships, that can work out nicely too.
If you are single and under 30, chances are, you can still tap into the stamina of youth to work all the time, get minimal sleep, and not have your body demand payback at a later date.
You Owe It To Yourself to Take the Plunge
A minority say, if you have a business idea you believe in, it not only deserves 100% of your attention, you owe it to yourself to believe 100% that you can make it successful. Because, unless you are able to devote yourself 100% to your green business idea, you will not fully give it the chance it deserves. Your creativity will be impacted by the level of exhaustion you may currently be operating in, and your time to market will be impacted because it will take you longer to get things out the door when you are working cobbled together late nights and weekends, and your competition is working full time.
Sure, the day job provides nice cash flow. But you can always take out a business loan to get started, or hustle friends and family for seed capital. An entrepreneur I recently spoke to who now earns over a million a year suggested that the best thing I could do was lose the day job, because employment was an opportunity cost to successful entrepreneurship. A life circumstance forced him to choose between his family and his 6 figure job. He chose his family. After leaving that job, he went on to make even more money as an entrepreneur.
You will never make more money as an employee as you can as an entrepreneur. Your upside at a day job is a 5% annual salary increase. Big fucking deal. If you hop companies, you can negotiate a 30% salary increase. As an entrepreneur, there is no limit. But of course, there is more risk and uncertainty.
The Drawback of Diversified Income Streams
Some business gurus recommend creating diversified income streams. Every successful entrepreneur I’ve spoken to who started this way, has scaled back to a few, or even just one. If you have diversified income streams related to one specific business and niche, that’s on thing. If your diversified income streams are related to different niches, chances you will spread yourself too thin.
If you are working a day job, I highly recommend focusing on one niche first. Otherwise, you may end up burning out simply trying to keep all your balls in the air. A few successful (successful meaning they earn 6-7 figures online) Internet business entrepreneurs recommended to me – get rid of anything that is getting in the way of achieving your goal – both projects and people.
When SHOULDN’T You Quit Your Job
DO NOT quit your day job if you have no idea how your passion will make money. Period.
Sometimes it is hard to admit if your passion lacks a business model. But you need to get real about this one, otherwise you will find yourself burning through your savings and having to hit the pavement again a few months down the road for another job with your tail between your legs.
You will need to ask yourself:
- Can I consult with my passion? If so, how will I find customers?
- Can I create products or services related to my passion? If so, how much will it cost me to create these products or services? Does the market want what I have to offer? How will I reach my potential customers? Can my target audience afford to pay my desired price for my products / services ?
- Do I have enough funds to allow me to work on my business idea for a year without generating any income?
If you have sufficient resources to keep you afloat for at least a year, more power to you. If not, then you will need to look into getting part time employment, getting funded, or doing the full time job with side hustle dance.
Signs It’s OK to Leave the Day Job
There’s no formula for when you should take the plunge and start a passion based business. Everyone is different. Some people do best when they hop off the cliff and trust that the Universe will take care of them. Others feel more secure with a rock solid transition plan. And sometimes you just know when it’s time to move one. Here are some signs:
- Your day job feels like it is increasingly in the way of your side hustle. That is to say your side hustle has become much more important to you than your day job, and you can’t wait to get done with your job so you can work on your other stuff.
- Your levels of toxic career syndrome are at an all time high. Your levels of motivation are dropping off precipitously, while the biting sarcasm and disengagement with your day job is only increasing. It’s important to note that job satisfaction is related to your own attitude, and only you can choose your attitude. But if you cannot find it in you to change your attitude, then use your disenchantment to fuel your corporate escape plan.
- You see your goals within reach, if only you had the time. When you have a clear idea of what it will take to get your side hustle to cross the threshold from hobby to viable business, but you just can’t seem to get all the work that needs to get done quickly, because something else is occupying 40 hours a week, get rid of the thing that is in the way of you achieving your goals – in this case, the job
- You have other side income coming in. It should cover at least half your living expenses, if not all. Congratulations, you have a soft landing. You are are free to pass GO and collect $200.
I know I’ve expressed some pretty strong opinions here. Tell, me, what do you do think the right moment is to follow your bliss and go into business for yourself?
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