One of the most common fears new entrepreneurs encounter before launching a business is how to handle the risk of losing job security. The transition from cubicle to company owner can be downright terrifying, as giving up a day job also means giving up a regular pay cheque, benefits and the comfort in knowing you have a steady, predictable income.
But you’ve already decided to take the leap – and fortunately there are ways you can build your business so that it protects you and provides regular income. After all, you need to support yourself and your family.
Creating Predictable Income
One of the best ways to ensure your business can pay you every month is to set up at least one predictable income stream. Sometimes called passive income, this is fixed revenue that you receive every month, which your business continues to earn even if you’re not working.
If you’re a massage therapist, for example, you might earn predictable income from selling complementary products, like pillows or therapeutic devices. You can track the number of clients who actually buy the products you recommend, to get a predictable average number of sales per month. If you can set up your product sales on your website, even better – other staff in your practice can easily manage these sales for you if you’re unable to work.
Consultants and other entrepreneurs who primarily sell services can also set up predictable income by offering monthly subscriptions or packages. Maybe you offer a consulting retainer that lasts a minimum of six months, guaranteeing your income for that period of time. Or, maybe you sell a subscription to a membership site where people have VIP access to content that the public doesn’t see. Monthly group coaching calls or webinars are another way to do this.
If you have a physical store, you might consider introducing a monthly “goodie box” that people can subscribe to. Every month, you send them a special package of products for a fixed subscription price. This also makes it easier for people to shop at your store who couldn’t otherwise get to you because of distance or mobility limitations, so it allows you to expand your customer base at the same time.
If you’re not sure how to create predictable monthly revenue, think about what value you could offer your customers every month, at a price they could afford. What’s something they would look forward to receiving from you on a regular basis?
Why Protecting Your Income is So Important
Creating job security in your business is all about finding ways to protect your revenue streams so that they don’t go away completely if you’re suddenly unable to work for any length of time. It affects your clients, too, in ways you might not realize right now. It’s impossible to serve your customers to your greatest ability if all you can think about is how you’ll pay rent next month. Your financial worries will affect the health of your business, and that has a noticeable impact on client retention and referrals. In fact, your money stress can stifle your business growth and start a vicious feast-famine cycle that’s difficult to stop.
The big company you used to work for had temps to replace you when you were sick, and other systems in place to keep business running smoothly. You need to do the same thing – even though your business is very small – to make sure you can still take care of yourself and anyone else who depends on you. So it’s really important to address your fear about losing job security, as early in your entrepreneurial career as you can – you’ll be very glad you did.