Fact or Fiction? You NEED side a job when creating a business because there is no way to make money for 6-12 months

Any perspective on the topic is greatly appreciated. Thank you Clarity community.


A startup is in essence the "art" of juggling. Of course you need some sort of "income" to pay for rent, food while your startup or business begins to generate cash flow. Ideally you should have at least 6 months of saving, sufficient time to give you a clear outlook of what will happen with your business. But some businesses start generating cash liquidity at faster pace. What is definetely certain is that you will need "leverage" in order to get your business started: savings, past clients, loans, investor capital, or even grants.

Happy to jump on call and explore more :)

Answered 10 years ago

It depends on the type of business you are launching. If it is a product-based business, then you are correct in that there will be significant runway/(and potentially investment required) to bring your product to market and start generating income. However, if you are a services-based business you should be able to start generating revenue much faster, if not at day 1. My past 2 companies were built on an agency layer so it was just a matter of pitching clients until we landed our first contracts. So I was fortunate in that in each case I got started by having someone hand me a check.

But like others have said, starting a new venture is going to be a balancing act. Assuming you are bootstrapping, ideally you will have saved up/set aside enough money to cover 12 months of living expenses. This removes the financial stress of not having any revenues/income, and you can be 100% committed to focusing on your venture.

However, the reality is that this isn't an option for most people, so having the security of a salary/benefits at your job (especially as you get older, have a family, mortgage, etc.) is a more realistic approach. This is fine, but then you need figure out how you can still be fully committed to launching your venture - i.e., will you put in another 8-12 hours a day (nights/weekends) *after* you get off of work? What about other responsibilities like time with your family? What happens as the business begins taking off, and the daily demands (during normal workday) increase?

No matter what, time is going to be your most valuable resource as there are only 24 hours in a day. Good luck!

Answered 10 years ago


Good question and a bit tricky..

You may need to access the financial aspect, liquidity ratios etc.. how long the business could sustain without having to go to work. Some business can make money in 2-3 months, some 6 months and some take more than a year. it really depends on the nature of business and readiness of your company to compete in the market.

Before that.. you may want to do feasibility study or at least study business cases as reference to finalize business plan, revenue model, marketing strategy and financial projection

The above exercises could help you to comfortably forecast, whether you need to work or not.. to support the business.

Hope this helps

Answered 10 years ago

The fact is that you need to be careful with the decisions you take and, above all, be realistic.

How much spare cash do you have?. Are you on your own or supporting someone else?. How much a month do you need to live?.

The truth is that when launching something, you will find endless ways to spend the few extra cash the business can generate at the end of the month (if any) but paying yourself (hiring more people. signing for this additional service that will benefit your customers, redesigning your website ...), so yes, it may take time (and even more than 12 month) until you can start getting some meagre cash out of the business for yourself.

So plan to have spare cash to survive at least a year and get ready to live a stoic life for a while.

Besides these minor issues, all the other stuff related to launching your start-up is wonderful! :D

Answered 10 years ago

False. Depending on the business you are creating and how agile you are in acquiring adopters will determine how quickly you turn a profit. There are a variety of strategies and plans to do so. :)
- Humberto Valle

Answered 10 years ago

Fact :) But of course, this has to do with your overall profitability and a ton of other metrics. Of course, these days, if your startup is actually generating revenue right out of the gate, you're golden. But it's essential that you diversify you income as early on in your life as possible. So, yes, I'd say a side job can be somewhat of a necessity for some entrepreneurs.

Hope this helps :)

Answered 10 years ago

Fact. Unless you're young and can live on ramen.

Remember young people are the target for investors because of this. Not because they are "better at picking what's hip" ... That's the story that's being spun. It's because they can take a high stake and not worry about the founders being paid.

Don't let anyone tell you that you can't make the money you need to live (and perhaps for your family to live) while you do a startup. If you find someone who tells you that you can't work and do a startup. Move on. You don't want to get involved with that person because they'll only drag you down.

If this is coming from an investor then shame on them. They should know their target better. You likely do not fit their profile. Find another one. I promise people with common sense do exist.

Answered 10 years ago

A lot depends on the business. Are you starting off with a contract or taking a customer with you? You might be fine (don't forget that you've almost certainly underestimated your startup costs though).

One of the more successful restauranteurs I know, conversely, told me that the secret in his business is to plan to have no revenue for 12 months and then no income for another 12. If you can do that, you'll be fine for the long term as long as the food and experience isn't terrible. Even great restaurants can take a very long time to build a clientele though.

I would say though that - again, depending on the business - you'd be better off using your savings or going into debt than having a side job. Being able to focus everything on your new venture is a huge factor; also, knowing that you have to make those 12 sales calls because your income depends on it can really be a motivational kick in the right way.

Answered 10 years ago

I think it is good to either have a good reserve for slow months or having some sort of side job in the beginning. Some are not able to work on side jobs so people may opt to have reserves and have some sort of pipeline of revenue coming in before going full time.

Answered 10 years ago

This completely depends on the business model. When I started my first business, I no money saved up, signed my first mortgage 2 weeks after starting my business, and had my first kid 4 weeks in. I made money during the first month. By month 6, I was making just enough to support my young family of 3. We have never missed a mortgage payment and I now have my home fully paid off. This is called bootstrapping.

I've also worked with entrepreneurs who are building a business model that won't make money for at least 12 months - by design. This later scenario usually requires outside investment capital to work.

Answered 10 years ago

My short answer is fiction, in most cases. I think it totally depends on your unique situations, but I certainly wouldn't say there is NO way to make money for 6-12 months. I think if you're in a progression phase from a comfy, steady, easy corporate job to your own venture, you need to be strategic and play scenarios out in your head before taking the plunge. There'll be plenty of days where you just think to yourself "You're quitting tomorrow and we can figure out the income thing the day after" - Which is a natural thought process for an entrepreneur. Of course, taking action is a great but I personally believe in taking calculated massive action. For example, if part of your progression plan is to leverge existing business relationships - make sure you've planted some solid seeds with those people before just jumping out of your day job and losing your income. (You'll want to consider legal ramifications here too - It's often not a great idea to try and steal your previous employers' customers). Build systems for your new venture, get up at 4am daily and spend the first 5 hours of each day getting stuff done that will move you towards a smooth progression financially. And yes, I agree with the other respondents that it's definitely a great idea to have some savings set aside if possible, or at least some solid committed customers for your new venture.

Answered 10 years ago

A business isn't a business until you earned your first dime. So you definitely need to have some financial back up for your personal consumption which is separate from your business investment requirement.

Having said that there is no definitive timeline. thats why focus on earning your first business dollars, once you see that people are willing to pay for your service/product you can think of leaving the job.

For example if you have a foodtruck you will start money from day 1. Give it a go for a week or even a month in the evening after office before leaving your job. May be soft launch but try to understand if people are buying from you.

Often we make a mistake by providing free service/products at soft launch and people rush to get it. We see it as good sign and jump the bandwagon only to find out people are not willing to pay for it. So My two cents are see the dollar at first or have at least 12 months worth saving (consider at least one failed attempt) before jumping.

Answered 8 years ago

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