What if your spouse quit his or her job? Losing that source of income is a scary thought, right? Although for Steve Chou and his wife, it was a mutually-agreed upon decision. When his wife left the workplace after years of feeling unfulfilled (and to take care of their first child), the Chou family acted fast to replace her six-figure income. And they did — within a year. How’d they do it? By launching their very own online store. This week, Steve, who blogs at MyWifeQuitHerJob.com, shares his tips for anyone thinking about becoming an e-commerce entrepreneur:
Take a moment, close your eyes, and think of a startup company that was founded within the last 50 years. Chances are, I’m guessing you thought of a company like Google, Amazon or Facebook. Am I right?
These businesses come to mind, simply because they’re big — they’re everywhere. On top of that, the media focuses on them, painting entrepreneurs that “make it big” as lottery winners, and splashing their names all over the place. Not only that, but many media outlets scare off would-be entrepreneurs when they report that 99 percent of small businesses fail within their first year. One of my readers emailed me this terrifying stat, and said that starting a business was “too risky” when his chance of succeeding was just one measly percent.
Of course, this statistic only looks at the “big wins.” This is where the focus on the Apples and the Facebooks of the world will get you into trouble. Your business doesn’t have to be the next big thing to be a success. With the right approach, you can start a successful business without taking on a huge amount of risk.
You don’t have to hit a homerun to make money: Before you start your business, consider your motivations. Are you trying to build an income stream that you can rely on? Or is your plan to start a company with the idea that you will be acquired for a billion dollars? If you want to start a business with the idea that you are just going to sell it for instant wealth, chances are that you will fail.
Instead of setting your sights on a billion-dollar acquisition, create a plan for a business that has a good chance of succeeding quietly. It might seem boring, but the point isn’t to make a splash. The point is to create a source of income that you can reasonably rely on, and to start a business that will allow you to ultimately live life on your own terms. My wife and I have an online business selling handkerchiefs and linens. We looked for a niche, and we filled it. We make six figures a year, selling these hankies that clients can personalize with significant dates and events.
Our angle is that handkerchiefs make elegant, relatively inexpensive keepsakes. By focusing on selling them in a way that appeals to people who want to commemorate special events like weddings, baptisms, Christenings, graduations, and other life milestones, we have been able to build a successful business. Are we going to end up with a billion-dollar valuation? No. But my wife was able to quit her job, and, thanks to another low-key business I started based around my blog, I could quit my day job anytime I want, and we will be just fine.
Starting doesn’t have to be expensive: Another concern that many would-be entrepreneurs have is the expense. It seems risky to invest a lot of your hard-earned cash into a business venture that could fail. This concern about risk is one of the reasons that many people never start their own businesses. The good news is that starting an online business — even one that sells tangible goods like my handkerchief business — doesn’t have to be expensive. My entire upfront cost to launch my online store was $629.90. Within a year we were making six figures. Our ROI was several hundred percent. Here are some of the expenditures you will make to start an online store:
Of course, if you decide to build a business based on freelance services like writing, coding, or graphic design, your startup costs can be even lower. All you need is an invoicing program like FreshBooks (or PayPal can take care of that for you) to bill your clients, an inexpensive blog template and hosting, and a broadband Internet connection for your computer.
Starting a business doesn’t have to be an expensive risk. With the right approach, it can be a good way to purchase financial freedom.
About Steve: Steve Chou carries both a bachelors and a masters degree in electrical engineering from Stanford University. Despite majoring in electrical engineering, he spent a good portion of his graduate education studying entrepreneurship and the mechanics of running small businesses. He currently works for a startup company in the Silicon Valley. He blogs at the website, MyWifeQuitHerJob.com.