Most of us hear about those entrepreneurs that set up their own businesses, but we tend to think that these individuals must have done so because they had nothing better to do nor to lose. Either that or they were are at university doing their post-grad and decided to quit their “boring” courses to set up their tech venture, like Zuckerberg for example. But we rarely come across those that walked away from a $250,000 per annum tax free Investment Banking job to set up their own start-up. Well, you are about to read an article that has been written by one.
I will never forget ‘that day,’ when I kissed away the fat pay cheque, the yearly bonus, the business class travel, the 5 star hotels and restaurants, platinum medical insurance and tailor made suits to start Eureeca. I soon went straight into no income, no travel, Subway for lunch, no medical insurance, worn out suits, no car and on top of that, I had to catch rides to do monthly visa runs to the Omani border with my good old friend and business partner, Chris Thomas.
The question is, did I know that I will be embarking on a journey of austerity before that day I quit my job? The frank and honest answer is, absolutely, yes I did. It was always part of the plan, a pre-determined and well-structured plan. But the tricky part was persuading the others, friends, family, and colleagues that I was about to jump. The vast majority never thought I would, but I knew I had to, the planets were aligned.
I figured, what is the worst that would happen? If I run out of money and my start-up fails, I wouldn’t mind restarting by bussing tables or working at McDonalds until I worked my way up again. I figured that as long as I have a plan, and as hard as it was to stick to the plan, I will be alright.
Fast forward 20 months after ‘that day.’
I am still alright.
It has been, and continues to be, a joyous period of my life that is full of new experiences. Was it worth it? Who knows! Unless someone presents me with a crystal ball, no one will know. But I can tell you that right now, as of today, I am happy that I made that jump. But if you are thinking of making that jump, here is what I advise you ought to do.
Plan your finances way in advance
Put together various scenarios, a best, mid and worst case scenario. How much you would spend every month bearing in mind all your outgoings and liabilities. Again, this is austerity time! So you need to crunch those numbers way down – I crunched down 70% of my monthly expenditure. But you also have to balance that with reality. There is no money coming in for a while so if your car insurance is pretty high because you’re driving a Range Rover, ditch it and get a Yaris. It still gets you from A to B.
Have the talk
Prepare friends and family for what is about to come. They ALL have to be fully on board and supportive. No more international calls – Skype would do. No more weekends away to Ziggy Bay – Jumeirah beach would do. No more dinners in Zuma – a “buy one get one free” dinner coupon will be enough.
Stick to the original plan
It is tiring and boring but you have to do it. Track your expenses. I’ve recently downloaded the Wally application for iPhone to help me keep track of mine. Everyone falters, but you must punch in those expenses religiously – regardless of how small the amount is. It keeps you on top of your game – treat it like a game, because that’s all it is.
Do not upgrade your lifestyle
Your lifestyle will change once you take the plunge, and it’s important to keep your eye on the prize. Don’t upgrade your lifestyle if you’re not ready. It is very easy to get dragged into an event or dinner that will end up denting the budget. You can only afford to do so if you see some real solid visible income that is about to come through. Without that, don’t put yourself in that position in the first place.
Celebrate like you did in 1999
Once you start seeing some visibility and make headway, treat yourself! And do it with those closest to you that still remained close. Don’t get me wrong, you will lose a lot of friends throughout your austerity period, but you need to weed those shallow ones out anyway.
I have been doing this for 20 months so far since ‘that day’. I nudged up my lifestyle slightly after Eureeca raised capital successfully. But that was 14 months of total austerity.
How do I feel? I feel like a Subway and Potbelly expert, a visa run guru, a Dubai taxi pro, and the best bargain hunter in town. But apparently, and for some weird reason, they refer to me as an entrepreneur, and I much prefer that to an investment banker.