So you have a great idea for a small business, you have clear personal goals, and you have the talent to execute!
You even have a pretty good idea what your business model will look like—the way your company will be run, product offerings, target customers, marketing strategies and so on.
How about your goals? They may be simply to provide for your family, or to provide for your family and save enough to retire in ten years.
And even though your goals and the strategy to get you there may seem in sync, they might not be quite aligned.
For instance, say you are a talented and experienced lawyer, and your business model is to represent people for an hourly fee. Great! But keep in mind that there is a limit to how much you can charge per hour, and a limit to the number of hours that you can bill in a day. This kind of business model—based on talent and time—has a built-in earning ceiling. So you may be able to provide to your family but not retire when you’d like.
However, if you were able to represent corporations in more lucrative law cases, where the business model included charging an hourly fee, plus commission, you might work longer hours but you would increase your earning ceiling and reach your retirement goal pretty quickly.
The key is to consider your talent (product or service) and then align your business model, so that they match and result in better reaching your goals.
One of the beauties of software development is that you can build your product once, and then let electronic distribution multiply your investment at very low cost—it costs you nothing, for example, when users download an app you’ve created from an online store. However, to get to that point, you need to align your talent with an appropriate and sustainable model for mobile-app development.
Now, if you choose to work full-time for a large software company, you will earn a good salary and get great benefits, but have no time to work on that genius mobile app you’ve moved to your mind’s back burner. And you have the same problem as the lawyer we discussed earlier: Earning a solid hourly rate at full-time hours, resulting in a limited earnings ceiling.
If you took a less demanding job with lower pay, however, you’d probably have free time to work on your mobile app. Another model might be to work for a startup with lower pay but a good stock-option plan, which might get you to your retirement goal too.
The point is that in order to reduce risk, and give yourself a chance at reaching your personal goals, it’s important to make sure that your talents, end goals and business strategies are aligned. Best of luck in finding that balance!