If you love space (and I do), you have to admire Elon Musk. Despite being told it would never work, so many times, he has done what any boy dreams of. Making rockets and playing with them like toys.
Being able to strap a Tesla car, including Dummy pilot, and playing David Bowie en-route to Mars surely tells us something. He’s earnt the right to do what he wants, not needing permission or blessing from anyone.
This got me thinking about business, and how much it’s like his reusable rocket that he’s developed. The stages that a rocket goes through are very similar to your journey. Leaving the safety of Her Majesties Armed Forces and start a business on civvy street is will take you on a journey. If you’re thinking about being your own boss, you need to keep one important thing in mind.
Do you have enough rocket fuel?
Elon Musk knows about rocket fuel, having enough and what happens when things go wrong. he’s had so many failures that he acknowledges he was very close to bankruptcy. He used us all his spare cash and was bailed out by a billionaire to carry on the project. So how much rocket fuel, or in the case of business, do you need?
Let’s look at the stages
Building a Rocket
This starts as exciting, but soon becomes frustrating, simply because you just want to get going. You’re going to need money to set-up. How much depends on what you want to do. However, whatever the amount you have in mind, my advice is to double it. The bills have a habit of adding up, little things creep in, and accessories haven’t been allowed for. When I set up my car key business, I estimated I’d need to spend £15,000 on equipment. However, to trade, I needed stock, a software licence, Yellow pages, etc. So, my initial costs were in fact £25,000. Straight away, I’m £10,000 over budget! Who knows the total cost that Elon Musk invested into SpaceX?
The most exciting bit. Just like Elon’s rocket, you have all this money already tied into the launch, money you’ll never get back and the moment you do launch you are now trading. You’ll have your first ever phone call, the first ever customer (I still remember mine), and the it’s up to you and you alone to get on with it.
There’s also a tremendous amount of fuel used on the launch phase, or in the case of business, cash. It’s possible that in the first few weeks and maybe months you’ll not make any profit. This is very simply because you may not have any customers, or if you do, you may be working much slower than necessary, or you may have costs to pay back in the early stages. Unlike a SpaceX, that is in space in minutes, let’s say that you’ll be a few weeks before things settle down into a rhythm. Remember, all this time you’re burning fuel, or cash.
So, you’re off the launchpad and making some money, fantastic, you have a business. The aim now is to focus on getting into orbit. For SpaceX, the orbit will be wherever the satellite needs to be released from, and to get to this point in space, the first stage is released (more of this later). Next, there is a secondary burn and it’s the same with your business.
In fact, this is a common point that businesses fail and can be the saddest of endings for a business owner. The hard work is done, you’re up and running, but just when you can feel it’s starting to work, you’re out of fuel. When the spare cash is all used up, and you can’t find any more funding, you never reach the point at where you reap the rewards.
For you, instead of releasing a satellite, your rewards come from reaching orbit by getting regular customers and profits, and breaking even, after paying your tax bill. Now tax bills and break-even are articles on their own. Once this money has been allowed for, and you have reached the wage that you set yourself at the very start, then your business is self-propelling. Your fuel burn is over, apart from minor course corrections and if there are no emergencies, you won’t need any more cash.
Of course, you’ll still need to invest some money into the business. If you’re a painter and decorator, you’ll need consumables and hand tools. If you’re a plumber, you may need new power tools. For us, we allow at least £10,000 every year for new software and hardware. But if your business is performing correctly, it will generate this extra cash itself. It’s an amazing feeling.
Return to Earth, selling the business.
Remember the first stage rocket, the one that normally is lost into the ocean? Well as you’ll probably have seen, Elon Musk has taken it one stage further. His dream was to make space travel cheaper, by re-using the parts of the rocket that would normally be lost. His very public catalogue of failures must have made the final success even sweeter. On the 21st of December 2015, SpaceX landed its first stage, at Cape Canaveral in a perfect landing, they made history. Likewise, just four months later, they landed on an ocean barge, an amazing feat.
Why do we need to bother with this last stage? Well if you ever want to retire from your business, do something different, or start another business, the aim must be to sell it, and get some money back. Wouldn’t it be good to recoup all the money you invested in the initial rocket build and getting into orbit? Elon Musk certainly has now. By planning ahead, he has something that has real value should he ever want to sell it.
Of course, none of us have plans like SpaceX. However, to get repaid for all the work that it took, will hopefully be your goal, it’s certainly mine. Granted it will take some more fuel, more cash. SpaceX crashed over ten of these landing stages to get the final landing right. Now, they’ve done the hard work, they can save money every time they fly, and they are market leaders in Space Travel.
Lessons from SpaceX
Whether you have plans to build a bigger business or want to build a lifestyle business where money is less important, we can still learn a valuable lesson from Elon Musk and his SpaceX team. You must keep some cash back so that you never run out of fuel. To get so close and to fail through lack of cash would be heart-breaking and devastating financially. Imagine your gratuity money burnt completely and having nothing to show for it.
But more importantly, SpaceX shows us that failure is a part your final success. You should expect it, plan for it and with some hard work and good fortune, you’ll achieve your own orbit, whatever that may be.
Most of us agree, it’s socially unacceptable for anyone to drink and drive. Quite rightly, this disregard for the law, provokes damnation from most of us. Had it been Jeremy Clarkson, Katie Hopkins, or worse still, most politicians or premier footballers, we’d be cursing them. Overpaid and underworked, any drink driver deserves the full punishment of the law. The problem is, he’s like family.
This week, Ant McPartlin, from the duo ‘Ant and Dec’, very publicly crashed out of his TV career . With that bad decision to drive his car, he’s become the nations most-loved, drink driver. Although we knew he’d been in rehab and struggling with some issues, things have reached a new low for him.
There’s real confliction here. On the one hand we hate what he’s done. What if he’d killed or seriously injured someone, or knocked a child down? On the other hand, we want to protect him from the fallout that’s coming. Just as other public drunks before him, will his fall from grace become his legacy? Is he destined for a life of magazine front covers and tabloid headlines? ‘Such a shame, he was such a lovely lad’
Amazingly, social media has turned on the the papers that have printed the story and photos of his crash, and is full of people protecting him.
‘People don’t understand what it’s like, the hard life he’s had, the pressure he’s under’.
He’s become our close family, we’ve eaten tea on a saturday night with him, camped out in the jungle to hear his and Dec’s magic. He’s someone who’ll we’ll excuse for bad behavior. Ok, so he likes a few drinks, who doesn’t? Ok, so he’s a drink driver…ok,…that’s awkward.
At last we got to watch it. Like most families no doubt, when we all get together, we have a stack of favourite films. On top of that, favourite actors, such as Tom Hanks, Matt Damon, Leonardo Dicaprio, to name a few. So at last, I dusted off an old favourite which stars two out of three, ‘Catch me if you can’. However, the tale of two little mice had never struck me as it did tonight.
Two Little Mice
‘Two little mice fell in a bucket of cream. The first mouse quickly gave up and drowned. The second mouse, wouldn’t quit. He struggled so hard that eventually he churned that cream into butter and crawled out. Gentlemen, as of this moment, I am that second mouse’
This is a story that Frank senior tells Frank junior. It’s his account of the struggle and supposed victory against forces that want to undermine and ruin his life as a business owner. He’s clearly proud that he see’s himself as someone who’s beaten the odds. Whilst in truth, he’s clearly fooling himself, it will strike a chord with anyone who’s worked their way out of a hole, when all seemed lost.
I’m one of these two little mice, maybe you are too. Skirting along the edge of a massive overdraft, just about meeting big loan payments, how do we end up in this position? Were we stupid to end up in the bucket of cream? Did we not have the skills to spot the bucket? Is there any way we can learn to spot the common traps that await us as a business owner? Unexpected tax bills, unplanned capital expenditure and emergency replacement of anything can catch us out and drag us down to the point where, there’s simply too much cream, there is no escape.
The good news is that hard work will trump everything in business. It allows us to catch up, make up, and prepare for the days, weeks and months ahead. The ‘Hard work test’ should be the first test that any prospective business owners take. You know yourself if you’re cut out for a life without a wage. You must be honest about whether you want that struggle, that work.
As ex-forces people, how can we prepare our self for the early weeks, months and years in business? Can resettlement from the forces ever prepare us for life as a business owner?
Steve Jobs did it. Elon Musk is doing it. Deliveroo were trying it this very weekend. Are you brave enough to be making tracks in the snow?
Before venturing out, after a heavy snowfall, we’d be stupid not to check the roads first. Is it safe to drive? Are others driving on the roads? What are other people doing? Surely if they’re doing it, then we should be able to.
But are we be brave enough, or stupid enough to be first out in the snow? Are we brave enough to do something with our business that others aren’t doing?
For most of us, we’d rather follow the tracks of others, this makes perfect sense. It’s safer, we have the previous tyre tracks as a guide and we can see they’ve made it safely. There are no wrecked cars, littering the hedgerows or side streets, we’re in safe mode, there’s little risk.
But as a business start-up, we have no choice whether or to be first out. When you take your first call from a customer, when you meet them in person. When you write out your first invoice and when you agree to do the thing you simply don’t know how to do, then you’re first out in the snow. You can read about how to do it, you can plan how you’re going to do it, but eventually, to get anywhere you haven’t been, you have to just set off, making tracks in the snow.
Leaving the forces and starting a business gives us a unique chance to do this. To start something great and to make a difference with the skills we have. The question is, while you’re making plans for your future, are you going to making tracks in the snow?
After yesterdays failure, today was affirmation we’re truly able to make a difference to a customer. If you’re thinking about starting up, or wondering why anyone would want a business, for me, this is the reason.
Today, after a week of family sickness, missed meetings, delayed plans and frustration, it was enough just to matter to one customer. Our customer phoned us and I knew she was at her wits end. Her son, who had a challenging illness, had lost his car keys, amongst other things. She was completely out of her depth. Unfortuantely, parenthood doesn’t prepare you for everything, and she didn’t know who to turn to.
She’d gone directly to the main agent, who asked her lots of things she didn’t understand. However what she really wanted to be asked was..
“How can we make your problem go away?”
“In a perfect world, when do you need this problem fixing by?”
“what can we do to make your life better”
These are the questions, we all want to hear, in any disaster. It may be that, just like the main dealer told her, she does have a complicated problem. But the fact we asked what she needed, and listened, meant we got the chance to explain the problems and the challenges she faced. It showed we were listening, that we cared. She understood that we were on her side. So we fixed her problem, we made her life better.
We’re clearly not in the car keys business. Nor even are we in the car key programming business. We’re in the problem solving business, the listening business and of course, how to make a difference to a customer business.
This is why I love being self-employed. We get the chance, to make a difference.