I did what social media dreams are made of.
After nearly a decade of corporate misery, I quit my full-time job and became an entrepreneur. I started a local clothing store based on an idea I had in business school, and my clientele grew rapidly. I even appeared on local news and television.
After three years running that business, I shut it down. He was on the path to profitability, but he was burned out and working at an unsustainable pace. It was one of the hardest things I’ve ever had to do. After seeming like a success, now everyone would think I was a failure. What would you do next? Should I go back to work from nine to five again?
I decided I would launch my second business, and this would surely be a success. This new business would be based entirely on traveling as a speaker in front of large mass audiences to teach others how to pay off debt, just as I paid $ 300,000 in debt in three years. What could go wrong?
That’s what I thought in January 2020. When the pandemic hit, I had to quickly learn how to move to a completely virtual model.
Just over two years later, Crush your money goals I earned over $ 250,000 in net income with over 2,500 students participating in my programs. This small business helped me achieve my goals of financial independence much faster than I had planned, while I witnessed many of my colleagues go into debt or close their businesses during the pandemic.
As I shared in other articles in this column Mess to the million, I went against some conventional financial advice. Still, I was able to build a six-figure business from scratch during the pandemic.
This is the fourth column in a 5-part series by Bernadette Joy. In “Mess to Million,” she shows that you don’t have to be perfect to get rich. Go on @nextadvisor on Instagram for live updates and questions and answers with Bernadette.
# 1: I never wrote a formal business plan
I have both a degree and a master’s degree in business, and the first thing I learned from starting a business is that you have to write a business plan. One of those spiral-bound documents, the size of a phone book, full of graphics and calculations on how you will do your marketing, operations, finance and technology.
You may need to show that business plan to a bank or investor for approval of a loan or initial capital. And certainly, if you were going to leave a current and stable job, you should have a documented plan. But many aspiring business owners I’ve taught over the years hear this and never start that business, because building such a comprehensive plan can be incredibly intimidating.
Well, I never did.
But I waited to have my personal finances in order and my debt paid off before launch.
Many people are surprised that I never wrote a business plan for any of my businesses. I decided I would always be my own investor, so I never had to apply for a loan.
Being debt free was perhaps the most important business lesson I learned and that allowed me to start a business without a complete plan. First of all, paying off my $ 72,000 student loan has put a lot of pressure on what I would need to earn each month just to cover up my loan payments. Second, the consistent budget over the years has trained me to think more creatively to cover business expenses, just as I have been creative with my personal expenses to pay off debt.
Looking back at how 2020 unfolded, any business plan I wrote would have come out the window anyway!
I credit this financial decision for the basis of my business plan
The best thing I did to start a new business in 2020 was pay for my house in 2019, a decision most of my family and friends disagreed with.
With no more student loans, car loans, credit card debt, and not even a mortgage, my personal expenses were low enough to handle if I had to accept less paid work to survive while figuring out how to grow my business. time.
Now, obviously, paying for your entire home is a tricky task, and I’m not suggesting that you have to do it before starting a business. But I strongly encourage those who start a business to pay off most of their consumer debt as much as they can, because it creates so much more room to breathe and make the inevitable mistakes when starting a new business.
# 2: I did NOT follow my passion
The number one piece of advice I’ve heard over and over again, whether from Oprah Winfrey or from local businessmen in my city newspaper, is this: “Follow your passion! Do what you love and the money will follow. ”
I mean, if Oprah said that, it should be good advice. And with my first business, I did that. I started a business for women to rent dresses for special occasions because I loved fashion, shopping and parties. I’ve always liked how clothes can build trust in people who wear them, even when they were little.
It was great the first year after being trapped in a cubicle for so many years. I couldn’t believe it was my job to play disguise for fun. But here’s what I didn’t expect: Trying to monetize something that was once just for fun caused pressures that made it feel like a task. Over time, what used to be a creative and social outlet for me became something I had to do almost every day, even on days when I didn’t feel up to it.
Instead, I found a valuable problem that I like to solve and left my passions alone
Now that I run a company that teaches financial education, people tell me “Wow! You’re very lucky to find your passion!”
But the truth is, money is not a passion for me. I consider money as the tool that helps me explore mine real passions: traveling and finding panoramic views, watching live music from country to K-Pop, and having hour-long conversations with people I care about. These are things that revive me and make my life worthwhile, and no, I don’t need to figure out how to monetize them.
However, I really enjoy helping my students learn how to better manage their money, and I have found ways to make it fun and valuable for both me and my clients. Finding your passion is amazing, and an important part of your identity, but I’ve spent too many years confusing what I do for money with who I am as a person. When I worked in corporate human resources for many years, just to realize I didn’t like it, I thought that meant I was lazy.
When my first business failed, I thought that meant I was also a failure and a less valuable person. I decided that this time I would keep my passions and sources of income separate, just as I now practice keeping my net worth and self-esteem measured separately.
# 3: I didn’t try to “expand” into a multimillion-dollar business
An employer I’ve worked for has often told me that sleep is for when you’re dead. And for a long time, I internalized that mindset, especially when I was working a full-time job, doing a graduate degree next door, and trying to grow my dress rental store in the evenings and on the weekends. In fact, that was what led to the final demise of my first business: I stayed completely and decided to close it, even when I was on the path to profitability. A business that requires you to work all day is neither sustainable nor healthy.
My income goals are aligned with what I need to truly retire
One of the Wonderful Side Effects of Growing an Online Business is Crush your money goals is that people have been incredibly supportive and enthusiastic about the value it can bring. Even complete strangers will send me messages and offer ideas and tips on how I can turn this into a multimillion-dollar business. Scale and grow and then become a billionaire: Isn’t that the point of becoming an entrepreneur in America?
But the truth is, I don’t have my eyes set on growing my individual business into a large-scale corporate entity with a lot of employees. I’ve worked for those companies for many years, and I have no intention of going back to it, even if that means I’m the one at the top of the organization chart. My goal in growing this business, in addition to helping others with their own financial journeys, is to end my own journey to financial independence.
And for me, that means reaching for my FIRE (Financial Independence, Early Retirement) number and pursuing the passions I mentioned earlier, or perhaps exploring some new ones. It started by calculating my FIRE number and keeping my current living expenses relatively low, despite the big jump in revenue over the past two years, so that I can invest in the long term to achieve my FIRE goals.
In my last installment of Mess to the millionI’m going to share how I actually got that FIRE number recently and what’s next.