Get More From Your Job: Use It as Training to Start Your Own Business
Rob Goodwin’s seven McDonald’s in Chattanooga, Tennessee, bring in $2.5 million per year, according to the Times Free Press.
He started by working at a McDonald’s he now owns, flipping burgers for $2.35 per hour. McDonald's success stories like this one are common.
Jitin Choudhury started in a Blimpie sandwich shop at age 16. He worked at two others over the years, and then he was hired to manage a Blimpie. When the owner retired, he bought the business at age 27.
Restaurants provide many opportunities for employees to learn enough to become business owners. But just about any job can be a business training course if you approach it the right way.
Here’s how to turn your job into a paid education on running a business before you quit to go out on your own.
Aim for More Than One Position
Choudhury didn't just make sandwiches when he was working at his first Blimpie. He focused on learning management skills, which led to the job in the restaurant he eventually bought. Working in more than one part of a business better prepares you to be an owner.
For example, if you write for a magazine and want to own one, you might first apply to work in advertising sales (that's where the money comes from, after all). Once you’ve built your experience there, try to get a position as an editor to learn that side of the business.
Observe and Ask Questions
When I worked as a carpet cleaner, Pat, one of my co-workers, was always asking the boss questions. How did he get this client? How much do the high-pressure hoses cost? He paid attention to much more than his own work.
When the boss offered to pay for additional training, Pat jumped at the opportunity. Within a few years, he bought the business from the owner with no money down, and over the next few years built it into an even more successful company.
He was just a cleaner for the business before buying it, but he learned as much as he could anyhow. Even if you can't work in other parts of the business, you can still learn about them.
Learn the Right Lessons
At one of my first jobs, at a pizza place, I watched the owner to learn what I could. He spent little time in the kitchen, working instead on marketing and opening more restaurants.
"You need to work on the business more than in it, if you want to grow."
It's a great idea.
But he also told us to skimp on toppings for pizzas given away as part of a promotion -- a terrible idea. A promotion is supposed to introduce new customers to your products or services. I could see these customers were disappointed with what they got, and were unlikely to return.
Even all these years later, I feel I could start a pizza place based on my experience. I learned about every aspect of the business. And, yes, I would limit my time in the kitchen (I could hire others for that part), and impress new customers with my best pizzas.
Not everything your boss does is smart, so pay attention to what works and what doesn't. Learn the right lessons.
Put In Your Time
In some businesses, you need to put in a fair amount of time to gain the experience necessary to be the owner. And you may need real, on-the-job experience more than classroom education.
Consider Mary McMillan. Her company, Westar Services, makes $5 to $7 million annually with nine tugboats and five water taxis in San Francisco Bay. She was one of the workers before buying the business from her boss. It seems unlikely that a business degree could have prepared her for the unique challenges of this business. Nor would a few weeks of work be enough.
You might learn how to run a hotdog stand in a few days, but you probably need a couple years of experience working in the arts before you feel ready to start or buy a gallery. Put in the time you need to be prepared for your business.
Find Out if the Boss Wants to Sell
If you look online, you’ll find endless buy-out-the-boss stories. If you go this route, you buy an existing stream of income rather than starting from scratch.
And it makes sense for the boss to sell to you if you've proven you know your stuff. In fact, if you're short on cash, he may be the only one willing to sell a business to you with easy financing.
So try to determine if your boss might want to sell in the near future. You may not want to ask directly, because if he doesn't want to sell, he may think you're about to leave. But you can subtly ask about his future plans.
Watch Out for Non-Compete Agreements
Many employers require new employees to sign a "covenant not to compete" (CNC), also known as a "non-compete agreement," as part of the employment contract. These clauses can prohibit you from starting a competing business in the same area for years after you quit, and might even prevent you from working for other companies in the same industry. Clearly, if you want to use a job as a business training course, you should avoid signing one.
"Non-competes tend to limit job mobility, accelerate talent flight and discourage venture-capital investments in areas that enforce them," reports Investopedia. Some states are even considering laws to prohibit them.
But business owners like these agreements, because they don't want you to compete with them. Some people even suggest business owners should avoid hiring anyone who might want to be more than an employee. Hiring only unambitious employees might be a short-sighted policy (will they really do the best job?), but it sounds like a common one.
If a job will help you learn about a business, but you have to sign a non-compete contract to get it, at least negotiate reasonable terms. For example, a tax return preparation firm shouldn't ask you to not start a new tax prep company in the same state. A more reasonable restriction might keep you from opening shop within 10 miles.
Just remember that if you sign it, you have limited your options. Be sure you're ready to buy out the boss or move away to start your own business.
Make Other Preparations
Experience is great, but you can also prepare in other ways, including:
- Answer the SBA's 20 Questions to Ask Before Starting a Business
- Subscribe to relevant trade publications
- Read some of the best business books
- Take free online accounting classes
And, of course, start saving money. Even if you're lucky enough to buy a business with no money down, as Pat did, you'll still need a financial cushion to handle the ups and downs.
With your paid business training course (your job), and these other preparations, you could soon be ready to start or buy a business.
Your Turn: Would you consider buying out the boss or starting your own business based on your job experience?
Steve Gillman is the author of "101 Weird Ways to Make Money" and creator of EveryWayToMakeMoney.com. He's been a repo-man, walking stick carver, search engine evaluator, house flipper, tram driver, process server, mock juror, and roulette croupier, but of more than 100 ways he has made money, writing is his favorite (so far).