We spend so much of our lives figuring out what type of work we can do that will make us feel happy and fulfilled. Entrepreneurship is a great way to live and earn money doing something you love. But financial uncertainty turns many people away from making that leap. If you fear that you won’t be able to turn your passion into profit, you’re not alone.
I, too, struggled with the fact that becoming self-employed meant that I’d have no idea how much I was going to earn each month. What if my business couldn’t make ends meet? Thankfully, there are ways to deal with this concern. Here’s what to do when your business is slow:
- Prepare for the worst
- Work a side hustle
- Build up an emergency fund
- Pick up new skills
- Live on a bare-bones budget
- Diversify your sources of income
- Network with people
1. Prepare for the Worst
If your dream business isn’t bringing in enough money to pay the bills, you’ll need to act quickly and explore all your resources. And before you even go into business, you need to prepare in case your business doesn’t last.
The market for your product or service could very well change over time. This was the case for Joshua Crum, a credit expert and business owner. “My first business was a home computer-repair company,” Crum says. “Things went very well until computers became disposable and customers started expecting me to work for less than minimum wage. Laptops, phones, tablets, and dirt-cheap computers killed the repair market, and no one wanted to spend $200 to $300 fixing their old PC when they could put that into a new device instead.”
After his business's failure, Crum had to immediately cut down on his lifestyle to become more financially stable. “My meager emergency savings (under $1,000) dropped to nothing, and I had to cut steak dinners and high-priced car accessories in order to make ends meet,” he said.
2. Hustle on the Side
All businesses take time to get off the ground. For example, if you start freelancing, you won’t land dozens of great clients during the first week or so. Keeping that in mind, it’s okay to do some side work to supplement your income if you’re not earning enough from your main business at first.
For example, I started my business while holding a full-time job; and before I considered quitting, I grew my income to at least match what I was earning at my 9-to-5 after taxes.
It was hard to juggle all that work at times, but it felt better knowing that I was building a business that could cover all my expenses.
Karen Cordway, a public-relations specialist and personal finance blogger, had to take on some side work to supplement her income, as well. She recommends that others do the same, even if the side hustle isn’t really related to their business.
“I worked as a substitute teacher just to make sure that I brought in a certain amount of money until I established myself,” Cordway says. “It wasn’t high-paying, but it was a flexible job, and I could pick and choose how often I worked, depending on how much I needed to earn.”
Having an income deficit is a scary place to be, and it can be a major confidence killer once you finally embrace self-employment and start doing work you enjoy. But there are some other ways that you can help hold things together, too.
3. Build Up Your Emergency Savings
When you run a business, your income can fluctuate from month to month. That’s why it’s important to save up a larger-than-average emergency fund during the good times. This way, you’ll have a financial cushion to fall back on during the times when income is scarce.
4. Learn a New Skill
When Crum’s business started going downhill, he diversified his education and picked up some new skills that he could monetize. While some markets stay the same over time, others change or dissolve so it’s important to always modernize your skills and learn new things. (You can find online courses through sites like Udemy and Coursera.) Crum no longer wants to put all his eggs into one basket, so he’s been improving his skills by learning about credit repair, web design, journalism, personal finance coaching, social media management, and marketing.
5. Drop Down to a Bare-Bones Budget
A bare-bones budget consists only of basic expenses you need to survive each month. Lowering your expenses can reduce your stress levels and allow you to stretch your budget while you build up your income.
6. Diversify Your Income Streams
Avoid putting all your eggs in one basket. The most successful businesses offer a variety of services and products. You can still have a main specialty, but consider expanding your services so that you can make your income more reliable.
Everybody outsources these days because it’s convenient. However, if you lack the money, create the time to handle certain tasks yourself. Once your income increases, you can loosen up the reigns a bit.
8. Grow Your Network
Networking is often overlooked when it comes to advancing your career or growing your business. Start gaining more contacts by meeting more people online and in person. Attend free events and connect with other people so that you can develop new partnerships and establish new clients and customers.
If you are truly passionate about your business idea and have clearly defined how you will earn money, I recommend you stick with it during both good times and bad.