Ahhh… the dream of jumping off of the corporate bandwagon and running after the golden city that is entrepreneurship. Isn’t it comforting knowing that if you only had the courage to follow your passion, you’d be rich, popular, and successful?
Well, that’s a bunch of bull…
Owning a business sucks…
When I first started Pro Sulum, LLC in the fall of 2009 I had high hopes. I blogged, recorded video, ran Craigslist ads, and worked social media. My dream was to be able to leave my job, work from home, and earn a living based off of what I produced rather than how much time I spent in a cubicle. Everything looked good and I had seemed to be doing all the things taught in the books I had recently been reading. Unfortunately, the only thing I was becoming accustomed to was sleep deprivation and nothing to show for it.
Even after learning to sell and to price, business still wasn’t very good. In fact, there were times when I almost had to close up shop because the time spent on client projects wasn’t worth the price they had paid.
Come the end of the year, although revenue was in the 5 figures, expenses overshadowed them.
Being profitable takes a lot longer than you think
Learning to run a profitable business is tough and takes an enormous amount of time, determination, and chutzpah! After almost 2 years, my company is only now beginning to be profitable (how’s that for transparent). You know what? Most companies don’t see a profit for the first 3 – 5 years. That’s the average.
If you aren’t in it for the long haul, you will fail. We are used to seeing successful entrepreneurs and assume that it only took a year or less for them to get there. 99% of the time these entrepreneurs spent years of working their #$$ off to get into that position.
If you make it big quick, great! But as history shows, don’t expect your business to soar before it even has wings.
Update: Welcome any New York Times readers. To help Ramit out, and to clear any misconceptions and to try to put things in context, I decided to add my profit and loss chart for the last year and a half. The point of the article is not saying that “owning a business sucks so don’t do it because I’m not making money and you won’t either” but that it’s really, really hard.
As far as the expenses go, a lot of them were things that I bought unnecessarily. For example I bought a piece of softrware for $1500 that I rarely use, I bought a $500 email newsletter template that I never use, and so on. Many of the expenses were because of my own idiocy. Also, a good deal of the expenses were legtimate business expenses like food at networking events or eating lunch with friends who could be prospective times. Those things are stuff that I’d be doing with or without a business.
Note that about 99% of the revenue comes from my Pro Sulum, LLC web development business. I’m not done with April yet but I have some projects coming and March was a great month for me. You’ll also notice in March of 2010 a spike, that’s when I took the Earn1k course :). I don’t have anything to gain from Ramit’s course on the blog. I don’t get affiliate money from him in the least. I took the course and it helped tremendously. For more on what this site is about (Definitely not get rich quick), please check out my about page. You can also Check out the post dedicated to Ramit’s NYT article for more context.
Feb. 2014 Update Below
If you are are new to the site welcome! The above post is still a great way to get an idea of how long it takes to get your business profitable. However, quite a bit has changed with my business and had helped to definitely increase the profitability of what I do.
One thing that has been a great success is teaming up with a partner. Last year Brett Bartlett and I teamed up – He was a master of selling physical products online, and I new how to create websites that could be used for information products. I still create sites on the side, but it’s nice to have consistent income through a variety of channels coming in.
I actually did a course on this in the Warrior Forum a while back but basically this is how it works:
Premise – You can’t do everything. That being said, if you can leverage the skills of others you cut your time spent on other things (things that you may not be good at) in half, sometimes more. You don’t want to necessarily find a business partner that has equity in your business, but doing an informal joint venture ads a number of positives that can help your business and get it to profitability much more quickly.
- Example 1 – with my web development business, I knew that I sucked at design. Rather than spending my time learning how to be a better designer, I ended up teaming with a designer friend that wanted to get into the web space. Not only that, being that I was working full-time, I didn’t have much time to market myself. The great thing about my JV partner was that she was on her own full-time. That meant not only did I get a designer on my team, I also had someone marketing on my behalf. It was a definite win-win and a big boost for my business.
- Example 2 - In the situation with Brett above, he was making well over 6 figures in gross sales via Amazon. However, he really wanted to get into the web space and start creating information products based on the knowledge that he had acquired. As luck would have it, I knew how to do all of the things that he needed (email marketing, membership sites, e-books, blogs, etc.) and it was a great win-win again.
Anyway, the point is that – even if you are hell-bent on being a solopreneur – at least give JVing a thought. It’s freaking hard doing everything by yourself and it can be far more profitable for your business if you team up with someone that augments areas that you may suck at.
You can check out what we’ve been doing in the free webinar below (we also have free videos being posted on this site too – just check some of the recent posts. It’s pretty cool stuff if you are looking to sell physical products in your business.