About this time last year I walked away from a nice paycheck and decent benefits to start this firm. It wasn’t the easiest decision – we had a one year old daughter and we were considering having our second. But I was struggling with the philosophies of my former employer and generally not happy at work.
The idea of a firm like Bason had floated around in my mind for a while. I knew that I was not a fan of asset-based advisory fees and the tide was turning to fully convince me of the merits of passive investing. But there was a problem: I’m not a risk-taker by nature. Friends could tell you that I don’t like change, and I’ve never taken an unnecessary risk in my life. I am conservative with our family finances and I hadn’t seen our balance sheet fall in value from the day we were married. And now I was going to walk away from a paycheck while my wife stayed home to care for our daughter?
Thankfully, it was this conservative treatment of our finances that made the change possible. We had always been savers, and when we reached the decision to start Bason, we shifted into overdrive. Every raise, bonus, extra dollar went into our savings, aka our “get-me-out-of-here” fund. I had a target: we would have two year’s worth of basic living expenses in the bank and very conservative investments before I would walk away. We had two ways to get there: save everything in sight, and start reducing expenses. Every $100/month we could cut from our spending was almost $2,500 less I needed to have in the bank to be comfortable.
Starting a business from scratch is an intimidating task. I had plans for marketing (networking, blogging, networking, social media, more networking) and knew that my business model would help me to stand out from the other thousands of advisors in Denver. But I also knew that building my firm would take time and patience (not something I’m generally known for). So having a solid two-year time horizon to measure my success was a good backstop to my worrying. I had essentially planned to have NO income for two years, so any early revenue would put me “ahead” of schedule.
Today, one year later, I’m happy to report that my practice has grown beyond my expectations, and thanks to managing overhead costs and our personal budget, we’re well ahead of where I expected to be. I’ve been asked by clients and prospective clients if I’m in this for the long haul, and the answer is a resounding yes. Thanks to the strong referrals of a handful of early clients and colleagues in my professional network, I’ve well exceeded my business goals for 2013. I am pleased with how well the flat fee structure has been accepted by my clients and colleagues and look forward to the continued modest growth of this business.
The moral of this story is go do it. Maybe you’re considering something similar, maybe you’re stuck in an unfulfilling job and looking for a way out. Start planning today, build your war chest, write your (very simple one page!) business plan. And then take the leap. One of the best pieces of advice I received when considering starting this firm was a simple question: “Is it going to be easier to do later? Three years from now? Five?” I knew the answer was no – the kids would be older, life would be more expensive and I would spend those three or five years treading water and wishing I had pulled the trigger.
And I’m glad I did.