The dream of being your own boss sometimes can be exaggerated. I think that’s what social media does – to make entrepreneurship look like it’s easy. But if you sit down and have an honest conversation with an entrepreneur who has been running his or her own business for a decade or more, you’ll find the truth which are not commonly shared online. Let’s face it, everyone wants the gain and fame, but not many can survive the pain.
So the million dollar question is, should you quit your job and be your own boss?
Here are some entrepreneurial lessons and experiences I’d like to share with you ever since I quit the bank in 2015.
Do monthly / annual budgeting and save up
Before your friend tells you to quit your full time job and join the new <insert company name> MLM business, list down your monthly and annual commitments first. Don’t quit a job that has been paying for your commitments, thinking that the new MLM or whatever entrepreneurship adventure can fully support you. Like any new business, you need time to plant the seeds, experience rejections, marketing and to repeat the entire process til you start seeing profits.
Once you’ve done your budgeting (and do it as detailed as possible), save up and have 6 to 12 months worth of expenses in fixed deposit, ASB or Tabung Haji. Financial planners call this activity as cashflow analysis. You can Google how this works, or you may also carry out this exercise with us during the first advisory.
Whenever I speak to someone who is considering to be self employed, what would hold them back is the fact that they don’t have enough savings, and will need time to hit the 6 to 12 months savings mark. If one feels the first baby step is too much, then stick to your full time job. Entrepreneurship isn’t a straight forward path like employment. Savings is a must.
Setup your SSM and company bank account
For those who earn side income on top of your salary from employment, how are you running your show? Do you bank in every side income into your savings account? Or is everything via cash, hard notes?
If everything is via savings account, with everything that is digitalised right now, you will not be spared by LHDN. It is just the matter of time that they will eventually reach you and audit your entire income channels.
So before they get to you, I’d suggest you be smart in your entrepreneurship game. Setup a company via SSM. For new entrepreneurs, if it’s just you running the show, start off with sole proprietorship first. Slowly scale to Sdn Bhd later on. What’s the rush? You’re just starting out.
Once your company has been established, apply for a company bank account. Whatever payment you get from customers or commissions, let it be transferred into your company bank account. Of course you could also get the income to be transferred to your personal bank savings, but it will be messy if you need to share your bank statements when applying for a loan / financing later on in the future.
As an ex-marketer (and a marketer at heart, always), I will always hold on to this value: KEEP IT SIMPLE, SILLY. The original last word is actually stupid instead of silly, but I guess since I’m writing as a Licensed Islamic Financial Planner, choice of word matters :p
Simplify your income reporting method. Help yourself in advance. This simple step can go a long way especially later on when you want to buy a house, car, credit card or apply for business financing. Banks would generally ask for three months bank statements. If your statements aren’t convincing, they could ask for up to six months plus other supporting documents such as recent income tax filing.
Hire a good, registered tax agent under LHDN
If you’ve been in my life long enough, you’ll know how I’m an advocate of this.
Invest in a good tax agent early on. It’s not a liability. Their fees aren’t expensive either as it depends on your transactions and business setup. If possible, avoid freelance accountants. They aren’t answerable to LHDN when your business is being audited. Hence why it is vital to only work with registered tax agents under LHDN.
Take care of your tax AND zakat. In return, these things will take care of you for the rest of your life.
Mix with positive crowd, and avoid pessimists
Being an entrepreneur is hard, and it is still hard even until this very day. There will always be a new kind of hard, so choose your hard. Surround yourself with entrepreneurs, someone who has the grit and determination that you want to emulate.
There will always be people who will not believe in you, doubt your dreams, and have negative things to say. You can’t control other people. All you can be mindful of is what you feed your mind and soul with.
You become like the five people you hang out with the most. If your top five aren’t inspiring, time to reflect and upgrade your circle (not upgrade your material things ok?).
Practise delayed gratification
This is the hardest bit, because as human being, we would always want to flaunt. Who doesn’t want to, right? In my earlier career of a unit trust agent, I often see new agents buying BMW or Mercedes on their first to second year. I still question this foolish act until today.
Don’t fall into this trap. If you commit to liability that doesn’t increase your business net worth early on in your entrepreneurship journey, you may or may not be able to survive, and the last thing you want is to sell off the car because you can’t keep up with instalments AND then go back to employment.
I’ve been fortunate enough to have met amazing entrepreneurs in my life who told me they only bought a nice luxury car for themselves 10 to 20 years later after starting their business.
The trade off you make today will pay for your lifestyle in the future. Trust the process. Trust yourself.
Upgrade your knowledge
In my first five years of becoming self employed, all I did was go for classes after classes. I still do this even up til today but I pick my courses wisely. After learning a particular subject, the next important step is to implement it and learn from the mistakes. This is where your masterpiece will be perfected – after making mistakes.
Experiment different ideas
Back in 2017, I remembered carrying out unit trust roadshow twice a day in a month. Each day costed me RM1,000. My colleague and I would go Dutch on the roadshow booth rental.
At that time, the idea of investing RM1,000 a day for this idea seemed crazy for my peers. It’s too much of an initial investment to make, for results that are not guaranteed. Just like any other investments, you can only know the ROI once you’ve invested and go through the entire journey.
Today, everytime I pass by a unit trust, PRS, estate planning, insurance / takaful roadshow wherever, I’ll smile. Kudos guys. Not everyone can carry out roadshow. It takes courage.
Dhuha, sedekah, tahajjud
This is the secret weapon for my dearest Muslims. Embed this into your entrepreneurship journey and see how Allah blesses you with abundance more.
You gotta put in the effort alongside these spiritual practices. Praying alone won’t make a million dollars fall from the sky.
So, employment or self employed?
To those who are feeling the exhaustion of working 9-5, being an entrepreneur stretches your working hours. You can’t relax on this side. In your current career, if you’re tired, overworked, going through depression, talk to your superiors about going for sabbatical. Or take a break. Your mental health matters.
I’ve disappeared from social media for few months because of exhaustion (despite being my own boss). I’d love to disappear for the entire year, however, the truth is, I depend on social media to make a living 😂
Whether you’re currently employed or plan to be self employed, the main driver is having sufficient cushion (savings). Do not neglect the importance of having this cushion because new business takes time to fly. Don’t be overconfident. Achieving your sales target earlier is a bonus, but never discount the possibility of success being delayed.
In entrepreneurship, you gotta look after you. If you feel it’s too much to be an entrepreneur, then ask yourself: what’s wrong with being employed? If you hate your job, nobody is forcing you to stay. Find a position elsewhere that will nourish your soul and help you grow. Be clear with who you want to be. In whichever side you plan to be, there is no shortcut.