I’m happy at my new job and I’m toning down the side work a bit, but this is a great confidence booster for anyone trying to make the switch from a salaried position to a freelancer. I do want to throw out a caution that I think my friends in sales can back me up on – you should use this calculator only to get your breakeven rate.

I always think of it this way – when you go the local market down the street to buy something at the deli, do you ask the owner how much it costs him or her to keep the lights on or how much his mortgage is? Of course not – you buy based on market value and what you’re willing to pay to get good quality meats and produce.

I’m a huge fan of billing based on value – not by hour and certainly not based on your overhead. It’s not about how much time you put in or how valuable that time is, it’s about the value you provide for your customer. If your customer is maintaining a website that costs $500/month in labor to maintain, can you show the value in a $6000 investment to automate some of that maintenance? If your client has an e-commerce site that isn’t marketed well, can you project how much market share you can create for them to justify an investment in your services?

If you lack the confidence to sell based on value, I don’t think you’re ready to make the switch. Have pride in promoting yourself and what you can provide for your prospects. Then, ask your first few customers to help you identify where you bring value and what it’s worth.

The only thing I couldn’t find is how cost effective it is. I’m sure there’s a significant cost, but the convenience of the whole relationship must make it worth your money.

It was the type of thing that started out as “let’s give it a shot.” Admittedly, I was doubtful at first but Kyle convinced me to go through the application.

After we were done, I felt like we had done a great thing. Putting your idea to paper and challenging it with the right questions is a useful exercise regardless of the potential for venture capital. Sometimes, I get so caught up in the work that I forget to step aside to set the pace and the direction.

I listed some of the good questions below. Are you asking the right questions about your business? Are you taking the time to challenge your idea(s)? As a business owner, you set the tone and the vision. While getting the day to day business done is important, I’m becoming convinced that my role needs to evolve more into planning and business development. But hey, that could be a little of The E-Myth talking.

Some solid questions from YCombinator that I wanted to share:

• What’s new about what you’re doing?
• What do you understand about your business that other companies in it just don’t get?
• How long will it take before you have a prototype? A beta? A version you can charge for?
• What might go wrong? (This is a test of imagination, not confidence.)
• Why would your project be hard for someone else to duplicate?

Are you asking the right questions? Can you quickly delegate the work you have currently so that you can answer them? More importantly, are you stuck in stagnation? Then, if you don’t plan for your business, who will?

• Objective 1: Determine what type of business I want to build – what are its ideals, its mission, and product?
• Honest, Simple, Practical – these are the 3 main descriptors I want our customers to use when they’re referring to the way we do business
• We make running small to mid sized businesses and organizations easier. We’ll try to find proven and practical software to meet your needs – if we can’t find it, we’ll build it.
• Initially, Enlight Solutions will sell expertise in Information Technology and Software Development. We’ll eventually break into a Software as a Service (SaaS) model offering all small and mid sized businesses affordable solutions that make good business sense.
• Objective 2: Determine action steps – what will it take for me to get there? Who will I have to meet? How will I meet them?
• Develop long-term relationships with quality customers
• Regularly attend networking events
• Maintain existent relationships
• Find a mentor
• Develop a proof of concept to create buzz
• Save at least 3 months worth of a salary
• Objective 3: Develop a rough business plan
• Objective 4: Develop a rough sales plan

This all needs a bit of refinement but you get the general idea. I didn’t really get to tackle Object 3 and 4 as I got sidetracked brainstorming on a proof of concept. I want to build something out that works great for all small businesses. I came up with triptracker.biz – track your business mileage for tax purposes and travel reimbursement. It’s a really cool concept and I’m looking forward to building it out. I tried to think of a tool that everyone in a small business could use, and I definitely think this falls in that category.

Positive, healthy relationships – build trusting and significant relationships (both professional and personal) with people that are like me or that I like. I want to know everyone’s name that I work with. I want to know what’s going on with their families and just general things about their lives. I want to help my friends reach their goals and offer advice. When I get older, I want to help young people like me start out. Productive, Complementing Teamwork – have a great team that is constantly refining and fine tuning their abilities and processes. The team should have a great work ethic, and shouldn’t worry about someone that’s not pulling weight or is being too demanding. The dynamics shouldn’t have to be developed or cultivated, it should just be natural. Well balanced life – while work is important, it’s impossible to be personally unhappy and productive at the same time. I have to be able to section off time. I shouldn’t feel guilty about not being in the office every weekend, i.e. I must always be doing what I love, both in my profession and at home. This is sort of the part where you say “doesn’t everyone want that?” Well, that’s why this is called goal setting. It’s what I want and it’s what I’m aiming for. I understand that even the best teams require attention, cultivation, and growth, but it doesn’t necessarily have to feel like it.

From this manifesto I discovered I’m definitely in the right field: entrepreneurship. It’s something I’m committed to pursuing – I’m passionate about leadership and making businesses work for everyone involved. I also think it puts me in a great position to build the deeper personal and professional relationships I’m looking for in life.

So where’s the plan part? I’m afraid this step didn’t yield anything earth shattering. For some reason, however, I did find it empowering to put on paper. This is my action plan.

• Shake the full-time job to become a full-time Entrepreneur
• Start meeting the right people to help me reach my goals
• Mentors
• Potential Customers
• Team members
• Investors
• Generate passive income to reduce risk in other Entrepreneurial endeavors
• Investigate what to sell
• Learn how to sell it
• Sell it
• Implement It

Over the next few days, I’m hoping to make these goals SMART with business and sales planning.

I also spent some time today working on Objective 1 (What type of Biz to Build) – particularly in the vein of what to sell. The age old question continues to come up – should I consult or should I build a piece of software and sell it? After talking with a few people, it seemed like I might be able to do both, but that I needed a focus regardless of what I choose. I definitely think my objective will be to release some sort of software for small businesses, but we shall see how the remainder of the week works out.

All in all, I evaluate today as a success in getting more in touch with my personal needs and objectives. If anyone tells you business/professional goals should never interfere with personal ones or vice versa, they’re fooling themselves. These days, I think it’s impossible to segregate the two. When you’re life planning, be sure to account for all aspects of life and how they can influence each other. Without that consideration, I don’t think you can plan realistically.

What’s really fallen by the wayside is the planning and goal setting. I really need to start deciding what problems Enlight Solutions needs to attack. In responding to this issue, I’ve taken five days off from work to do some soul searching and start narrowing things down. Before I start anything like this, I try to set some objectives and plans for what’s ahead.

• Objective 1: Determine what type of business I want to build – what are its ideals, its mission, and product?
• Objective 2: Determine action steps – what will it take for me to get there? Who will I have to meet? How will I meet them?
• Objective 3: Develop a rough business plan
• Objective 4: Develop a rough sales plan

It’s a lot to cover in 5 days, but I’m committed to the task. Sometimes, you just have to jump right in. In order to reach these objectives I’ve set the following agenda for the retreat:

• Personal Life Plan
• Personal Goal Setting
• Brainstorming on what’s marketable
• Market Research
• Consolidation – determine what Enlight Solutions will specialize in
• Business Model
• Revenue Model
• Identify Primary Market and a few secondaries for growth
• Business Plan
• Sales Plan

Is this a good plan of attack? What snags do you think I’ll hit? Is this realistic for five days? Please let me know your thoughts. I will keep posting my progress throughout the week.

“I admit it: I’m scared. I can’t afford to quit my current job. Is that a sign that I don’t have what it takes to succeed?”

I love Guy’s response to this. He states:

“You should be scared. If you aren’t scared something is wrong with you…You can reduce these fears by diving into the business and making a little progress each day”

While it made me feel good to read that how does it translate to how I’m starting? I’ve taken that response and tried to apply it to my business. Building a business takes significant time and energy. I’m really committing to stay the course here, and it can’t be done overnight. From that, here’s what I’ve come up with:

• Set tangible, realistic goals.
• Slow and steady wins the race. Develop the skills and build the network. Don’t rush into a venture without the right amount of initial thought.
• Nothing goes as planned, but preparation helps. Have a vision but don’t over commit to what’s just an idea.

Easier said than done, right? I’m convinced that it’s all about patience in a fast paced world that wants you to rush through things. A small amount of progress is still progress. Don’t let the sheer mass of your business initiatives intimidate and overwhelm you into inaction.

I think I just motivated myself to make “a little progress” today.

I’ve decided that I’m going to start this exercise in small chunks at a time. Doing a little at a time will allow for the consolidation of my ideas. So I took an hour today to reflect on where I want the business to go. I began with a very simple question – what will it take to support my own, full time salary?

For a long time, I’ve been consulting. I enjoy helping people on custom software development and IT project management. I’m looking to transition a full time job and a part time consulting gig into a full time business. I believe that this can be achieved only through the development of assets. While consulting can make significant amounts of money, time is a limiting factor. You cannot make yourself or your employees available for a limitless number of hours. Therefore, all you can do to boost revenue is to boost rates. This is not something that is fair to my customers, and it’s not a model for significant business growth. At some point, your rates are going to become impractical and your customers will seek business elsewhere.

I would like to develop a business that will result in an increase of income with a reduction in time investment. This can be achieved through the development of products. The first five years of Enlight Solutions, Inc. should be spent on transitioning from a part time consulting firm to a full time provider of online services.

In order to sustain myself at my current standard of living, I will have to gross $85K annually. This was based upon a net of $60,000 with a reserve of $15,000 in taxes (30% of gross).

How can this be accomplished? If I invest money made off of consulting revenues into the development of products over time, I can begin to transition the business into its desirable focus. I’ve depicted this below.

There are numerous issues with this model, however.

• How can I keep my consulting customers satisfied while making this transition?
• How do I manage this transition relative to my active contracts?
• Will the products I develop be profitable enough to subsidize the loss in consulting revenues?
• Will I miss consulting?

Future brainstorming sessions will have to address these issues.