How We Started A Business With Zero Experience | The Financial Diet

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Hey guys i’m chelsea and i’m lauren and we are the financial diet and this week’s video is brought to you by quota c and this week we wanted to take a moment to answer probably the most frequently asked question we get on all of tft which is how we started a business and obviously it totally makes sense that lauren be here to talk about it because she did it too

Now just for some background for those of you who might not know t fd or the financial diet is much more than just this youtube channel obviously this is a big part of what we do but we also have our website our social media platforms we have a book we do events so the financial diet is just sort of the brand that encompasses all of that and we make money off of

It yes it is our full-time job it’s our full-time job as many people i think have a hard time understanding sometimes when you work on the internet the financial diet proper is a team of six women but we also work with tons of freelancers and contractors for example erin comes on as our guest to host the thursdays show so the financial diet is much bigger than what

You just see here but this is part of it and while we were on the road for the tfd book tour a lot of people came up to us and expressed how much they would love to start their own small business or even go full-time freelance and we think that that’s totally possible and doable but with that being said i think that you need to do everything in your power to set

Yourself up financially to ease into doing something like that don’t just go into your job tomorrow and quit and wing it because that’s a sure way that the thing you’re trying to do will probably fail yeah all of those quit your job follow your dream posters and coffee mugs and memes need to chill and it should be said that both chelsea and i had a certain level of

Privilege that allowed us to do tfd from the beginning so it is something that we’ve mentioned on the channel before but it’s good to reiterate that when we started tfd a both of us were coming from full-time salary jobs in the industry that we currently work in she was in an advertising agency i was at another website which not only allowed us to transition in

A more financially stable way but it also gave us a lot of background in the industry and what we were doing we also had made personal choices that allowed transitioning to be easier for example lauren lived with her parents until she was 25 and commuted to work so that she was able to save a lot of money and pay off a lot of her student loans i went to community

College which means that i largely avoided the whole student debt thing but we also each had partners who are able to help with the monthly bills during the time that we were not taking an income from tfd which while we did reduce our lifestyle on both sides to really help that transition is still an enormous privilege that not a lot of people have so we want to

Acknowledge that privilege while saying neither of us like came from great wealth or had some miracle happen so it’s often a combination of both and i think one of the most useful ways to start your own business or to even go full-time freelance is start doing it part-time at first you know work on it in the evenings in the morning before work on the weekends and

Ease into that transition of doing it full-time in our case lauren and i worked on tfd on nights weekends and sometimes during our day job for about four to six months before we actually took the plunge but before we talk more about the nitty-gritty of starting a business it’s also important to know the world of starting a business because a lot of people i think

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Have these myths and misconceptions around who starts a business how much it costs how much it earns what it looks like and it’s good to really know the facts before you go in yeah it doesn’t have to be so scary and studies show that startups are actually not so bleak in terms of prospects contrary to the popular belief that 50% of startups fail within the first

Year and 95% close shop by the five year mark the truth is 70% of small businesses remain in operation for at least two years 50% are still around in five years 33% in ten years and 25% after 15 years and it’s actually women who are leading the growth of entrepreneurship in america there are around 550,000 new entrepreneurs across the national state and metro

Level every month and women in particular have seen an increase as the rate of new entrepreneurs jumped from 220 out of 100,000 adults to 260 from 2014 to 2015 however the mental image of the ceo / self-made man / business owner that you might have in your head is probably more glamorous than the actual reality because the average income for a small business is

In the forty four thousand dollar-a-year bracket which makes sense when you consider that most small businesses consist of one person in general what’s important to understand is that the life of an entrepreneur and the path to get there is a lot less glamorous than you probably think but that means it’s also a lot more accessible than you probably think besides

Being realistic about your expectations of starting a business i think it’s really important to think about the financial aldys of how you’re going to start that business and what it’s gonna cost to get it off the ground for example census data shows more than 40% of all small businesses started for $5,000 and 64% of entrepreneurs started for about $10,000 now

That doesn’t include living expenses and the same article suggests that you should have about six months of living expenses saved up so that you can go ahead and pay your bills during the early stages of your business when you’re probably not making enough money to pay yourself now we of course must specify that that should be separate from your emergency fund but we

Know that some people tend to cheat when doing that now once you have a financial understanding of what entrepreneurship looks like and how much it will realistically cost you to prepare for it it’s important that you start above all with a true business plan now for us tfd just started as a personal hobby i created this blog on the side so i could track my budget

Lauren found it at her ad agency and was like hey i want to design this for my portfolio so neither of us went into it with the intention of being a business but very quickly it became clear to us that it could be a business we received a small grant for it people started paying attention to articles we started to get more and more traffic and when we decided that

We wanted to potentially leave our jobs into it full-time we knew that first and foremost we needed an actual business plan and we did not quit our full-time jobs until we knew how we were going to be making money at tfd a year from then when it comes to going freelance or starting a small business a common problem people have is confusing being good at something

With being good at making money off that thing no matter how talented you are as a designer or a writer or making something or doing something if you are not really capable of monetizing that which means advertising those products or services doing all the administrative work and actually doing everything it takes to maintain the business then you’re probably not

Ready for it to be a business and of course a lot of that you will learn as you go but a really big advantage in any small business or freelance situation is having some serious familiarity around the financials of the industry you’re looking to get into for example lauren and i came both from a background where we worked pretty closely in the advertising world

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Which is how we make money so there was already a base level of understanding as well as a network of people we could tap into to help us make decision and plan and even secured our first clients and yeah it’s not always fun to think about how you’re going to fund the work that you love doing but if you have any chance of doing it for the long term in any way it’s

Essential to think about the strategies and to actually map it out so in our case with tfd we had the actual product we had the website the channel and the various social media platforms and we slowly started building out a monetization structure we started with automated ads like a banner and pre-roll and then we moved on to selling custom ads and we slowly grew

The business from there as we increased our revenue we’re able to grow the platforms and hire more staff and bolster our team which grew the revenue in turn and during this period of growth it’s really important to set limits for yourself we chose to grow in a small and sustainable way because that’s what was important to us because work life balance has always

Been super important to us but thinking about your business plan isn’t just the gross amount of money you’re planning to make it’s also the actual day-to-day operating costs and the unexpected things that you don’t really think about when you go in to just doing that thing you love so many small businesses fail because they don’t understand how to plan out the

Real day to day costs of a business a year from now which is when you need to be planning for it and that’s why it’s so important to have that real cushion of savings or some kind of personal setup that allows you to alleviate the stress on your own bills during those initial six to twelve months because it’s so hard to predict those day-to-day costs that seem

Totally foreign to you at the beginning of it but if you’re not ready to think about your operation in terms of a year from now you’re not ready to start part of what i think made us successful and what i think can make other people’s business endeavors successful or even going full-time freelance is having this attitude of being scrappy and having a bootstrap

Mentality but only when you need to and when i say being scrappy i really mean just having the co can do attitude and being a solutions based thinker from an economic perspective i hate the term bootstrap but when it comes to starting a small business it’s kind of essential that you think that way aka i’m never too good for any one job and i think there are really

Two strategies that are useful to keep in mind here the first one is focusing on continued learning because no one’s going to be there to teach you how to do something or communicate with a client or solve a design problem for example you have to be the one who’s going to stay sharp and figure that thing out so continue learning is and the second is not hiring

Additional help or outsourcing work until you need to if you own a small business you don’t want to take on costs that are unnecessary and you don’t want to bloat your workflow or expenses in our case there are many things that we went without for the first two even three years of our business because although they would have been awesome and a huge comfort they

Were just expenses we really couldn’t justify for example we didn’t even have a proper office for tfd until three years into its existence the amount of time we spent pulling out our hair because we couldn’t find a coffee shop that had good wi-fi air conditioning everyone could sit down they didn’t get weirdly mad at you if you sat there and worked for a while

It was a nightmare as was working in a home office that was just basically my apartment but ultimately having made that choice allowed us to invest that money in so many other more important things that helped truly grow the business in a sustainable way for example we’re able to funnel those resources into hiring new staff and to pursuing new clients it’s of the

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Essence to reduce costs not just in your personal life but also in your professional life and it’s also super important to remember that when you are getting paid by clients the day you sign that contract is not the day you count that money because wuff some clients will pay you right away on signing and bless them but some clients will literally pay you 90 or even

120 days later and if you mentally take into account every dollar you sign the minute you sign it you will crazy overspend which is why it’s really important to do your budget on a much more extended basis but be it’s also important to remember that a dollar is not truly countable as spendable until it’s in your pocket we have literally hunted down clients for 10

Months to get payment on something and if we had counted that money as already in our pockets we would have been in debt and finally the thing that helped tfd mature as a business was moving into an executive mindset which chelsea and i both had to do and which everyone has to do if their full time freelancer or small business owner for example i had to learn to

Really value my time put a dollar amount on each hour and work to steadily increase it i also had to learn to better communicate with the people around me and learn how to think long term rather than getting caught up in the day-to-day tasks and also building up the business to a place where we could finally outsource some work allowed us to take a step back from

The day-to-day work and think big picture which is necessary for every business to succeed even if it’s something as simple as using apps that help with your day-to-day tedious work and productivity the more you can free up your brain the better ultimately no matter what small business or freelance career you want to start remember that it all begins with taking

Care of yourself preparing yourself financially and doing the diligent work of planning out a detailed business plan well before you take the plunge but even if like us you have your own business which is doing well and growing every year it’s no excuse to sacrifice your quality of life you may be doing what you love and it may be your passion but you should still

Put limits around the amount of your life that you give over to work we close our laptops and go home at the end of the day just like we would if we were at someone else’s nine-to-five job doing what you love doesn’t mean doing it 24/7 even if it’s your own business and whether you’re building your family or your business the people you care about depend on you

Protect what you love with affordable term life insurance from quota c just answer a few quick questions to compare your policy options and apply online quotas these agents will guide you every step of the way from quote to covered easy right life insurance may not be something you think about every day but taking care of it now will let you make those big life

Moves like starting your own business with peace of mind and confidence get started today at the link in our description so as always guys thank you for watching and don’t forget to hit the subscribe button and to come back every tuesday and thursday for new and awesome videos and speaking of awesome videos the financial diet is part of the complexly family which

Produces a bunch of other awesome channels like scishow psych where every week hank and britt dive into what makes us tick check out scishow psych at the link in our description bye

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How We Started A Business With Zero Experience | The Financial Diet By The Financial Diet

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