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Today’s entrepreneurial mind-set may be one of the reasons increasing numbers of people are starting their own businesses, whether that means a part-time side gig to bring in a little extra money or jumping into their business full-time. With this in mind I interviewed Kimberly Palmer author of the new book, The Economy of You: Discover Your Inner Entrepreneur and Recession-Proof Your Life, which focuses on the micro-business movement.
Palmer is senior money editor at US News & World Report. She’s also appeared on NBC’s Today Show, CNBC, and CNN. Her first book, Generation Earn: The Young Professional’s Guide to Spending, Investing, and Giving Back, was published in 2010. Here are Palmer’s tips on how to start your own business.
What’s the best way to test the waters when starting a new business?
Putting your product or service out there using existing e-commerce sites to get your initial sales — and feedback from those customers — is a great way to begin. Those sites, from Etsy to Fiverr to Freelancer.com to Elance.com, make it really easy to make those first sales without investing a lot of your own cash up front. In fact, you can often get your shop set up in a matter of days. Then, as you perfect your offerings and get a sense of what the market wants, you can tweak your product (or service) and invest more in your own website and other startup costs that can help build your business.
The first step is to visit these sites and set up an account, which usually takes less than an hour. Then, you can play around with your profile and description, and also see what’s working best for other people.
Please give our readers three ways to juggle your fledgling business with your day job?
I like using small slivers of time to be productive instead of waiting for the bigger chunks, which often never come, especially when you’re juggling a demanding full-time job, too. That means using commuting time, lunch breaks, evenings and weekends to check up on the competition, brainstorm ideas, and create your products. Thank goodness for Smartphone’s — I can send Tweets and even update my Etsy listings while standing in line.
Second, staying ultra-organized helps avoid scheduling conflicts. I like the paper-based approach; all of my responsibilities go in my Planner Pad and then I supplement with Google Calendar. Shared calendars help make sure family responsibilities get taken care of, too.
Third, think more in terms of managing energy than time. I can get much more done in my heavily-caffeinated mornings than my more sluggish afternoons, so I try to use my mornings for creative work and my afternoons for more busy-work. That’s also why I try to save the afternoon slump for answering email so I can be more productive in the mornings.
How do you know when it’s time to leave your full-time gig?
You can quit once you’ve developed a steady stream of income from your business; usually at least 10 percent of your total income. You also want to make sure your finances are in good shape otherwise — your debt is paid off, you have a six-month emergency fund and a solid retirement savings account. Once your business is replacing a significant chunk of your income, and you see how it could grow even further once you have more time to devote to it, then you can consider quitting.
But it might never be time, especially if you love your job. That is the beauty of the side-gig — it lets you fully embrace your creative and entrepreneurial side while still benefiting from the security of a full-time job. If you can continue to do both and you enjoy both, that can give you the best of both worlds — creative freedom and security.
Sometimes, you don’t have a choice. Full-time jobs disappear as a result of lay-offs every day. If that happens, your side-gig is there to catch you. You can leverage it into a full-time job, or use it as a safety net while you job hunt.
Having a support system is essential for every entrepreneur. What’s the best way to find an online community?
You have to find your specific niche. Maybe it’s gen y career coaches, or Jane Austen-inspired jewelry makers, or creative entrepreneurs on Etsy. Finding the community who is doing work similar to what you’re doing, or what you aspire to do, is often as simple as spending half an hour running some web searches on terms related to your interests. The more specific you can be the better. There is probably someone else out there doing something similar to what you want to do, and they can help guide you, even virtually. You can learn so much from reading people’s blogs and Twitter feeds.
What is the one thing you would tell anyone contemplating starting a business?
Get started today! It can be overwhelming when you’re starting a business from scratch, but breaking it into small steps — send a Tweet, write (or read) a blog post, open up a PayPal account — makes it more doable. Spend five minutes a day investing in your business idea, and within a month, you’ll have made significant progress — and maybe even your first sale.