004: Your Five-Year Plan Is Probably Wrong (Here’s What to Do Instead)

Charles (: 00:22

to the Unsexy Entrepreneurship Podcast. If you're a millennial who is done with corporate America and obsessed with starting, acquiring or growing your business to be financially free, independent, you're in the right place. We don't go through any hype or motivational speaking. This is all just the nitty gritty of running your own business and being an entrepreneur. I am your host, Charles Harris. I'm a CPA and I'm joined with my cohost Dr. Seth Jensen. And this is the Unsexy Entrepreneurship Podcast.

Seth Jenson (: 00:30

⁓

Seth Jenson (: 00:48

So Charlie, what are we talking about today?

Charles (: 00:50

We're talking about goals. I'm so excited. I love, I love goals. I live my life through goals and maybe a little bit crazy on them to be honest. So I'm excited to chat about them.

Seth Jenson (: 00:58

Well, that's why you're the life of the party, Charlie. You just show up ready to talk about your goals with everybody. That's no, I, but I think, you know, you've gotten where you've gotten because you've had goals, right? You don't, you don't take a journey that you don't have a reason for. And obviously entrepreneurship is a journey. So what motivates you to take the plunge, I think is really important. And so thinking through the motivation you have and whether your goals are the right fit for the path you're taking, I think is.

Charles (: 01:02

You

Seth Jenson (: 01:26

Huge. I mean, it's a deal breaker. It can be a deal breaker for an early entrepreneur. So yeah, I think this is important and I'm excited to go on this motivation and goal journey with you.

Charles (: 01:37

Are there any correct goals or motivations when you're talking about entrepreneurship?

Seth Jenson (: 01:42

It's funny because I think there's a bunch of lore about it, Like there's people that'll tell you it's like, I invest in money-driven entrepreneurs. It's like only the greediest sons of a bees are going to be the ones that succeed. There's people that are like, no, it's got to be a passion project. It's got to be something that you're just like so excited and want to have exist in the world. I don't think, you know, like most things in life, there's this silver bullet right answer. But I do think...

you want to pick a path that matches your motivation, right? And so if it is all about the money for you, you better make sure you're on a path that's going to actually bring home the revenue that you want. And if it's a passion project, you need to also know like, Hey, am I happy if this doesn't make as much money or am I willing to kill my baby if necessary to make it profitable? Like you just got to be aware of the kind of pros and cons. So that's what I'd love to kind of talk through today is like.

Charles (: 02:34

Yeah. So you're saying we're not all Elon Musk's

right. We can't come up with a rocket ship and then make it to space and make billions of dollars.

Seth Jenson (: 02:38

Right?

Well, actually, I tell my students all the time, like in some sense, you could be Elon Musk, right? Like there is, he is made of the same stuff we are. I do think there are, you know, superpowers that each of us have that we can tap into. And Elon Musk is a hyper fixated individual that's, you know, really willing to think outside the box, but like we can develop those qualities in ourself as well. So if like, if your goal is to build the next SpaceX competitor.

You can do it. It's just, you got to realize that's going to be an incredibly long path. It was for Elon, like it is for anyone. It's an incredibly risky path to take. But yeah, I actually do think if you've got the right motivation behind you, you can do crazy big, huge things, honestly. And maybe that's, maybe I'm just a fairy tale believer, but like I, I've seen it happen, right? And the people I meet that have done huge things aren't special.

Charles (: 03:22

awesome.

Seth Jenson (: 03:32

Like that's one of the dirty little secrets of entrepreneurship is I like to say they're just as dumb as we are. They've just got something motivating them to keep going.

Charles (: 03:40

Yeah, well, we are all definitely dumb in our own ways. That is for sure. ⁓

Seth Jenson (: 03:45

You heard it here. We're all dumb. Don't

let it stop you.

Charles (: 03:50

So when I started my journey, I reached out to you because of your career. And one of the first things we talked about was motivations and goals. And something that you said really resonated with me, and I still do to this day, is I keep track of everything. Is there a certain way or ways you recommend doing that?

Seth Jenson (: 04:11

I don't think so. think the important thing is that you do. Right. And, and again, we could talk about smart goals, but like the key is just to have clarity, right? Cause you can't hold yourself accountable and you can't know whether you're on the right direction. If you aren't super clear. ⁓ I think I gave you the example when we chatted of me doing my PhD thesis, which is like a huge undertaking. It just takes a long time, right? It's like hundreds of thousands of words. And so I literally just had a big chart on my wall of like a thousand words.

2000 was three like just broken down into manageable chunks and every day I'd cross things off and I could see hey at the end of the day a thesis has to be a certain amount of length which is kind of stupid right but but it is and and I made sure that I was progressing towards that and in a timely fashion for you I know replacing your income was huge like that was really one of the main motivations to get you started I'm curious how how did you like track your goals and kind of make that happen

Charles (: 04:40

Hahaha.

Yeah, so you said a few different things that I really liked. You said it should be displayed so you can see it quickly and easily. And then you should have a way of indicating that you've actually accomplished things. Maybe you have a better way of explaining that. For me, I have a bunch of random nerdy pins. And so every time I got a client, I'd push a pin into a cork board. And so I have, I have.

Seth Jenson (: 05:24

cool.

Charles (: 05:25

It's the only way I've ever displayed them. I just had them sitting around, right? Cause I'm a nerd and I've just accumulated them. And so it's been really helpful to be like, okay, I got a client and then I push a pin in kind of clicks that I've done something. And then I have my goals written out on a little bit of a whiteboard that I have hanging right next to my desk. So I see them every day.

Seth Jenson (: 05:35

Mm-hmm.

Charles (: 05:48

eight hours a day, probably if not more, right? Like it's super prominent and it's so easy to visualize. In fact, I'm looking at it right now. I'm not gonna share it it has pretty sensitive information on it. But it's just, that's been really helpful. And then right next to that, I put the motivations and then I also put...

I put my motto, I guess you could call that like your values of your company or whatever you wanna call it, right? Especially when I started out, it was just me, right? So a motto is basically my own personal thing. And then hopefully I can instill that as I grow my company even more and expand, right? ⁓ And I have, yeah.

Seth Jenson (: 06:10

Yeah.

Man, I think that's so foresighted. I love

that so much. I'm curious, you have to share with us at least one of your nerdy pins and then give us an example of a goal as well that you've got down there.

Charles (: 06:29

Okay.

Alright, so if you know, know. This is Hoyd. He's from the Cosmere of Brandon Sanderson, if you're familiar with that. But I have a bunch of those like little chibi pins that I've just kind of put up. Just a nice little visualization.

Seth Jenson (: 06:48

No, that's, I, ⁓ we're, I don't know if it's nature versus nurture, but I also have some, some Dragonsteel paraphernalia in my office as well from one of their conventions, so.

Charles (: 06:54

you

I mean, talk about a great

entrepreneur, good lesson to be learned, right? Like he's bestselling books into a huge enterprise. ⁓ And we could go on that for a long time too, I'm sure. But they're really cool.

Seth Jenson (: 07:01

Phew.

Mm-hmm.

revolutionized the

publishing industry. It really is an interesting case study. I've worked a lot with their team and it's super cool. So yeah, give us an example of a goal that you've got up there that's been motivating for you.

Charles (: 07:12

really is.

Yeah.

Yeah.

So, every month I put, clients and, and MRR or monthly recurring revenue up. so, and then obviously it's increasing, right? So every month I have a goal of how many clients I want by the end of the month and then MRR. And then I have the next two months laid out as well. that way I can kind of be aware of what's upcoming, because it's easy to.

The way I saw it is like, I got a big client and then I kind of lost track of what was upcoming. so, by constantly showing both months, I'm able to be a little bit more aggressive. and then I show a year goal, which again is, is just clients and MRR. ⁓ I don't care about yearly revenue very much because it just, it's been changing so fast and so rapidly. if you're in the accounting world, you understand that, there are just not enough of us. And then I also have a five year goal.

And I was going to ask you about this because in a previous podcast you had mentioned, you only do two to three year goals. So is, is five year goal wrong?

Seth Jenson (: 08:14

No, think, mean, the more goals, the merrier. ⁓ I just, like that two to three year timeframe because it sets expectations appropriately of, like anything substantial is going to take time. And again, in your case, it, you know, six months was enough to get you really far in your business. but, but for most people, they should have that expectation of, where do I want to be in two years? I'm going to be somewhere in two years.

Where do I want to be in two years and do I have a process to get there? And I think that's important when we talk about goals. I love the goals you just explained, right? There's the what and the why there. Like what specifically do I want to have happen in my business and in my life and why again for you, you know, replacing your income, autonomy, a lot of these things were really big for you and

The reason having a what and a why is important, A, it gut checks yourself and asks, should I be more ambitious? Is this actually what I truly want and think I'm capable of? Yeah.

Charles (: 09:03

Yeah, that's what I've been, been realizing is that I'm probably

not ambitious enough. ⁓ as things kind of move, right?

Seth Jenson (: 09:09

Yeah. And

absolutely, absolutely. you're going to, you know, it's, it's a, you know, a cliche, but you're going to miss all the shots you don't take. Right. And so setting goals that push you is important that are realistic. But the other thing that a what and why does other than gut checking your ambition is it begs the question of the how. So you're like, okay, I want three more clients every month for the next six months. I don't know if that's actually a goal, but something around there. And,

And then you have to ask yourself, okay, but how, how am going to make that happen? And it forces you to think of the processes, the channels that are going to drive revenue growth, drive client adoption and retention. And so if you just have a what and a why, that's not going to get you very far, but it asks the question, okay, now how, what can I do in a repeatable, true and tried method to arrive at the what and satisfy the why?

So that's why goals are powerful, right? That's how to use them in a way that's gonna really move your business.

Charles (: 10:05

Yeah. What I, what I really love is because I put up my five year goal and I think you could, think you could a hundred percent change it to two to three years and it wouldn't really matter. but it has changed how I try and accomplish it because at least in accounting and obviously every, every job is different. Every career accounting firms, it's pretty easy to gain clients right now.

There are too many at retirement age and we could go through the whole economics of it. But what is.

really interesting is on my five year goal, I put a very different vision than just have this many clients. and so it's been really helpful to see that every day and it changes my mindset to, just got to find an ex client to how can I achieve this ultimate goal of having a really nice lifestyle business, right? Which is very different than just hustling to get the next client.

Seth Jenson (: 10:47

I love that.

Yeah, yeah, yeah. And that really is, well, that brings up such a good point because for you, your why has a certain timeframe where there's a certain place you want to arrive and you can't do it in two years, but to have that lifestyle, you're like, I think I can do that in five, right? And so I think that speaks of, you know, two years, five years, let it match your why, you know, like have it be specific to what's going to motivate you, right? So you might, if you're Elon Musk and you want to revolutionize space travel,

Charles (: 10:56

So it's been an interesting dichotomy there.

Seth Jenson (: 11:22

Well, that's a 10, 20, 30, 50 year time frame goal. So he's got goals, I guarantee along those timelines. He's famous for having really dumb goals that no way, yeah, that no thing they never actually accomplish. ⁓

Charles (: 11:31

Failed those goals. I think we were supposed to have autonomous

drivers three years ago or something like that. Yeah. Yeah.

Seth Jenson (: 11:38

yeah, for sure, for sure. ⁓

but, but, but again, that, that's, think an important principle is, know, the, the, the number, the timeframe doesn't matter. Have it match your why, ⁓ have it match and then have your what, you know, feed that why, and then have that how enable that what and that why, right? you're, know, we're, we're going to talk a lot about processes and, and strategies that are replicable, right? Because goals can be motivating.

or unmotivating, right? For you, you had such a clear path. You're like, I know I can build a firm that's gonna give me this lifestyle. And I know it has all to do with these clients that are gonna give me monthly recurring revenue. And then you came up with a great strategy for onboarding those clients, right?

I'm curious, Charlie, if you, when you were setting these goals at the offset, did it feel silly? Like before that, before you'd really been able to dip your toes in it, like what was the experience of setting goals? because again, that's part of the reason that plunges so hard is because you haven't done it yet. Like you don't know what it's going to feel like to make these goals happen. like emotionally, how did it feel to sit down?

and kind of think through your goals.

Charles (: 12:45

Well, it's funny and maybe this is more of a confidence thing, but I didn't think they were achievable. I wrote them down and I thought this is crazy. This is nuts. What am I doing? They were, it all felt like a pipe dream and we can, I'm sure at some point we'll talk about ⁓ finance versus accounting and why I can't stand finance departments. They're all fantastic. I love you guys. You finance people, but.

They look at to the future, right? And they, they map out what they think is going to happen to a company and, how the financials are going to work. and I can't stand it because I feel like they're always off 10 to 20 % and they can't predict the future. So why are they even trying? and so it felt a lot like that when I did my goals, I was, cause a lot of this is financial.

a prediction, it's, financial forecasting. saying I'm going to get this many clients. I'm going to have this much MRR. It's, it just seems so fluffy and guesswork. ⁓ but I mean, obviously I don't think it turned out that way and now putting them up and seeing them every day. It's, it's very different than, than I was thinking of it as finance, right?

Seth Jenson (: 13:36

Mm-hmm.

And now you're wondering, was I even ambitious enough? Right? Like I love that 180 where you're like, oh my gosh, I'm just, this is a pipe dream. can't believe I'm being, you know, think I can replace my income in a matter of months. And now, you know, so many months later, you're like, man, I should have doubled it. Right? I should have been even more ambitious than I was. And I think we've talked about this before, but what I love about your kind of startup story is it was when you've just did your first little like

Charles (: 13:48

Yeah.

Ha

Seth Jenson (: 14:14

in the water that you realize just how easy it was going to be, right? Like we're just doing something. It wasn't even selling a client. It was just talking about opening a firm with some of your colleagues, essentially friends. And then just stuff started happening, right? And I think that's an important lesson of like, you just have to start, you just have to go and you'll learn about the processes and how it's going to work and whether it's going to be easy or hard, but you'll only learn that once you do something.

Charles (: 14:41

Well, I think that's true for, for most entrepreneurs I work with. I'm just thinking through the list of my clients, right? One mowed the lawn with his son every Saturday and then suddenly someone asked him to help. And then now he's very profitable. another just showed up to work and then his boss decided it was going to quit. And he said, well, I'll take your company from you. Like, don't just get rid of it. And he said,

Sure have it. And then that was it. Right. And so now he's got the super profitable company. I think a lot of it is just asking questions, being honest, being forthright. And then suddenly things will fall in your lap a little bit.

Seth Jenson (: 15:06

Yeah.

Yeah. So there's actually, you know, we talk about manifesting, right? And there's kind of these woo woo things, but there's psychology that backs this.

really strongly where it's like you only see in your environment what you're looking for. And I think we should do a whole episode in this in the future, but it's really comes down to that. You only see in your environment what you're looking for. So if you have goals and you have intentions, then all of a sudden opportunities are going to become salient in your environment. You're going to see them where you before you didn't see them. The thing people always talk about is when you're thinking about buying a car, like Maria and I have thought about buying a RAV4. I know that's not a not a like luxury or exciting vehicle.

Charles (: 15:50

We love our

RAV4.

Seth Jenson (: 15:53

You guys, would, my gosh, we're so basic and the same.

But now we see RAV4s everywhere we go. Where before they were just part of our background, right? So there really is something to that and your goals will help you see clients where before you just saw just people on the street or someone you ran into, right? And it's gonna help you see strategies that you hadn't considered before. So that's again, the power of motivation and goals and articulating them to yourself because if they're just nebulous,

then there's nothing to find in your environment, right? So I think that's so powerful and easy, right? Again, it's not difficult. It's not difficult. It's just doing it is the key, setting the goals and trying stuff, right? And then magic can happen.

Charles (: 16:35

So are there good or bad reasons to become an entrepreneur?

Seth Jenson (: 16:39

So yeah, we kind of touched on this at the beginning. I don't think so. I don't think there's a right motivation or a wrong motivation, good goals or bad goals, but they do each come with pros and cons, right? So for example, right? One of the obvious ones is, I want to get rich. I want to develop wealth, know, generational wealth ideally for my family. That's a great goal. That's a great reason. I think, you know, both of us in our separate careers have definitely been motivated.

by wealth and financial stability. But so many people start with this vision of like entrepreneurship is going to be this like ticket and I just have to do it and I'll be wealthy. Do you understand what it takes is the big question, right? A lot of wealth comes with a lot of grind, right? Like, and so if, you willing to bring on the pressures of being your own boss, making things happen when people won't make them happen for you, you know,

SpaceX, we keep using that as example, talk about a grind, right? Like one of the most hugely profitable and influential companies in the world, but to achieve Elon Musk wealth, you have to achieve Elon Musk like grind, and he's famous for that, right? And so there's no quick, you know, get quick rich schemes out there, I think is my main ⁓ takeaway from this. So yes, money should motivate you, but just...

Be real with yourself and be prepared to do the work necessary to be successful, have multiple year timeframes, and accept the responsibility of wealth comes when I put in the effort to bring it about.

Charles (: 18:05

Yeah, I think my perspective would be even a longer timeframe than you generally, because I know you work with startups and you've mentioned fast growth startups. I generally work with main street style businesses. So this is like a 500,000 to about 5 million in revenue. Most of those companies have taken about 10 years to get to where they are. ⁓

Seth Jenson (: 18:17

Mm-hmm.

Charles (: 18:26

And they're super successful and they're very happy and doing well. Their work life balance is awesome. Highly recommend it. but most of them can't afford me at the, at the year one stage, right? So they're doing their own bookkeeping. They're doing their own work. They're really grinding. It's hard. ⁓ and there's, there's a reason a lot fail.

Seth Jenson (: 18:36

Yeah.

Yeah. Well, and,

and, that's such a good point. Like on the mainstream, ⁓ on the main street side of things, ⁓ again, it takes time. Your margins tend to be, to be, well, it depends on the industry, but even on the high tech side where people think of, like, you know, this company took off, they got venture capital, they're swimming in money. The dirty, you know, little secret of venture capital and high tech type

Charles (: 18:54

Yeah, but they're generally slim.

Seth Jenson (: 19:06

startups, a of those times the founders haven't paid themselves for the first four years, right? So yes, they've got millions in investment and it looks from the outside like they're this overnight success, but you don't see the two years it took them to get funding where they had literally no salary whatsoever. And then the first three years of series A and series B where they're giving themselves minimum wage and working 70 hour weeks.

Charles (: 19:11

You

Yeah.

Seth Jenson (: 19:33

It is not a quick path to be wildly successful in almost every circumstance. And there are outliers and be that outlier. not saying it, hard work is it useful in its own right? Shortcut the crap out of it. I encourage you to do so, but have realistic expectations going in. Otherwise you'll be disillusioned very quick. That $100,000, $200,000, $300,000 salary.

Charles (: 19:43

Hahaha

Seth Jenson (: 19:59

isn't going to happen in three months, right? And so, you know, let money motivate you, but be realistic about the time frame and the effort you're going to have to put in.

Charles (: 20:05

Be aware.

Okay, so reasons for entrepreneurship. We talked about getting rich. Are there any other good reasons?

Seth Jenson (: 20:15

There's lots of them. So I think for you, right? In fact, maybe let's start there. What were kind of your top two or three reasons?

Charles (: 20:22

Yeah. So I have two kids. and that was probably the biggest reason I wanted that flexibility, that time, with them. my oldest is starting kindergarten here. And the nice part is, is I get to start working at 6 AM and leave and be done by two. ⁓ pro I mean, I'm a start a founder, right? So I probably will work more than that, but, I can go pick her up from school every day.

Seth Jenson (: 20:37

Thanks.

Charles (: 20:44

So we don't have daycare costs, which is really nice. ⁓ speaking as the accountant, but, but more so just to have that flexibility, the ability to, to be with my family when I want to be, that was the biggest driver, I think.

Seth Jenson (: 20:55

I love that. And I think that's true for so many entrepreneurs. want control over their time, right? The time is that resource that you only have so much in your life, right? You got 24 hours in the day, hundred years to live if you're going to the gym and drinking spinach smoothies. So having, being your own boss and being able to say, I'm going to work today, I'm not going to work today, or I can be done at 2 PM to pick up my daughter is really powerful. The thing that's the reality check with this one, I think, is that most people don't realize that

You do have a boss in some sense. Um, and the clients become your boss. And so when they need something at 10 PM on a Saturday, uh, you either do it or you lose the client sometimes. Right. so, um, flexibility over time does it's a double edged sword in those respects. And often you're going to be working a lot more than you would for a nine to five job. The other thing is emotionally and mentally.

it's gonna bleed into your off hours, right? There's really not a hard clock in and clock out time. So even when you're sitting at dinner with the family, it's hard not to be solving the problems of your business in the back of your head. So, yeah, I know you've used her as sounding board a lot in the early journey.

Charles (: 22:01

my poor wife. Yeah. Yeah, because I could.

⁓ yeah, I felt so bad for her. And I was so thankful that when we started chatting more regularly, because I felt so bad for her because I would just talk to her constantly. I was like, Hey, if we do this and this, then I think I could get to this kind of revenue this quickly. And like, this is what I'd like to offer. This is what I'm thinking. What are the pros and cons? And I love her to death, but she doesn't really have an accounting mind. I use Excel. She uses Word. That's

Seth Jenson (: 22:17

Yeah.

Charles (: 22:32

That's how we describe our relationship. She's an editor. So it's just kind of funny and I still do this all the time and I always feel bad about it. But it's all that is in my mind these days, which is maybe not healthy in some ways, but I think it's so much fun. Which just means I'm in the right path, right? But.

Seth Jenson (: 22:33

Yeah, yeah.

It's hard not to.

Absolutely. And I think that goes hand in hand. like control over time and then kind of this other concept that's very related is like being your own boss, controlling your own destiny. And it's kind of the same thing where it's like, it's, really powerful, but, but then you do have a hard time letting go, you know, at, 5 PM and there's kind of this open-endedness to your path, right? nobody's telling you when to work. And so it's hard not to be.

solving problems all the time because there's always another client on board. There's always a process to improve. There's always needy projects lurking in your inbox or, know, so I think they're great reasons, but just make sure that it's a good fit for you. Are you the type of person that really likes a nine to five or do you like five year projects where you're just continuing to build and,

and you can kind of control when, when that time and effort happens, but just recognize the time and effort usually go up compared to your, your, your part-time job almost always. And there's no, ⁓ discrete, boundaries. You have to set your own boundaries. And even the best boundary setters are going to struggle in those early stages because there's just so many hats to wear, so many problems to solve. So sometimes being your own boss sucks to be perfectly honest.

Charles (: 24:02

Yeah.

Yeah. Well, it's interesting too, cause you were saying like, do you like a five year project? And I, and we talked about getting rich and we've talked about control over your time and your destiny. And it's interesting that you put it as a five year project. Cause I think in terms of money, I'm an accountant. If you invested money right now and you did nothing with it and you just let it sit, it's going to.

pay you significantly more than if you spent it now, right? And I think entrepreneurship is very similar in a lot of ways. It can be scary, the longer I let it sit, the more I see the exponential possibilities, which is pretty fun and interesting to me. Whereas a job, there's nothing wrong with the job. I think they're fantastic. I've had one.

for many, years, but it is what it is, right? You can't really see that exponential growth and you will see growth in your career and increase in pay, but it's just a different growth mindset in some ways too.

Seth Jenson (: 24:58

This is kind of big thing going on here, but to be perfectly honest, those stable opportunities, that stable structure of the economy of like firm employee, it's kind of being eroded right before our eyes as well, where like that stable nine to five or whatever, I think it's becoming a thing of the past increasingly. And we don't know what AI is gonna do exactly at this time. But even before that just...

Being entrepreneurial pays dividends in a way that that structure can't and that structure might not even be an option anymore for some careers, right? And so I really like that mindset of like investing the time and the effort now really does have beautiful long-term effects. Ownership, right, has incredible long-term effects. Starting a valuable company that can just build and grow itself is a magical thing to watch, for sure.

Charles (: 25:48

So what are some other reasons to become an entrepreneur?

Seth Jenson (: 25:52

So one that I really love, but I think is one of the stickiest, is when it's a passion project. When there's someone who's just like, well, just messiest, messiest. Like, it's not as clean and pretty as it feels at the offset. And so when you're motivated by bringing your passion to life, so for example, maybe you're like,

Charles (: 25:58

Stickiest what do you mean? What do you mean by sticky?

Seth Jenson (: 26:13

I make these incredible cookies and I want the world to have my cookies and I want to revolutionize cookie creation and consumption.

And so you're like, I'm going to start a bakery. Now's the time to bring my cookies to the world. It is, right? And so that's the hard part is like on the plus side, it's very motivating. You're willing to put in the hours because it's something you naturally enjoy and are intrinsically motivated to do. On the downside is businesses have to be profitable. And so often your passion butts up against

Charles (: 26:28

Boy, that's a hard business.

Seth Jenson (: 26:48

obstacles related to profitability that you have to make a choice. Am I going to make less money or am I going to actualize this vision in the way that I always dreamed? And that sucks, right? Like, are you willing to sacrifice your dreams at the altar of profits, right? And if you're not, then just be aware that this might be a hobby more than a business, right? Because

⁓ Pivots are going to happen in the path towards profitability and those pivots might just slowly chip away at your ultimate dream.

Charles (: 27:19

Yeah, so I have an interesting perspective on this. Long ago, I was a music major. And so when I started my firm, some people I wanted to work with were musicians because I love musicians. They're my people. And so I got a partnership and...

⁓ Worked with music studio consultants. So they work with music schools helping grow their business and So I came in as an accountant so that they could third party out tax prep bookkeeping services things like that I love musicians but It is such a hard business it's been really interesting to to see and I've had this discussion with multiple people but

They need to raise their rates, but they can't because there is a mom who teaches part time from her home who charges 10 bucks an hour, right? And that's just hard to compete. And so it's hard to really, gain that distinction. And there are exceptions. I'm not going to say that this is a hard and fast rule. I've worked with some very, very profitable music schools. but the majority of the time they're small. They teach in their home.

And they can make 60 to a hundred thousand a year, but they're kind of capped at that. and so it's interesting.

Seth Jenson (: 28:28

You know, that makes me think,

Charlie, we should do a whole episode on breaking out of hard industries, right? Like how to differentiate yourself and like strategize your way out because, because often the passion projects fall in those types of categories that traditionally don't have great margins, right? And, there are those outliers, but yeah.

Charles (: 28:35

be so much fun.

Yeah.

Well, and I love them. I want them to succeed. Right. And I think

all of us do. We all love the artists. We love what they create and what they provide to this, to our society. It's one of those things that everyone appreciates, but it's a hard business.

Seth Jenson (: 29:00

Yep, absolutely. And there's kind of a flip side of the passion project too, where like on the opposite side of the spectrum, there's the necessity entrepreneurs, where it's like, I have no passion for what I'm doing, but I'm out of a job. And, you know, I've got maybe some constraints about what jobs I can pursue. So I need to start a business. And...

First of all, I feel for people that feel that weight on their shoulders, because that's a hard place to be. We are in a capitalist economy where uncertainty about your income sucks so bad, so deeply. I remember when I finished my PhD and I had a PhD from the best university in the world in freaking strategy. So I was an incredibly employable person, but those months where I was deciding where to go were so stressful. So I just want to say.

And again, that's just a fraction of what someone's feeling when it's really in that necessity situation. So first off, if you're in this situation where you're like, I really feel like entrepreneurship is the only option, we feel for you. And, you know, there is a way to make this work. There's hope for you. And give yourself as much grace as possible in this process, because you don't want to add extra pressure on yourself unnecessarily. But the thing to really think about when you're, when

you're really up against the wall and entrepreneurship is kind of a necessary path for you is do you have a timeframe that's going to meet your financial needs? So are you choosing a business path that's going to meet your family's needs in a way that's going to be sustainable, right? So if you need revenue now, then maybe you should be pursuing a service-based business where it's easier to get a client tomorrow, whether it's mowing lawns or

Charles (: 30:30

Yeah.

Seth Jenson (: 30:31

you know, professional services, whatever it is that you have to offer, as opposed to, okay, I'm going to invent a new technology that's going to change the semiconductor industry, right? Where it's like, okay, that means profits aren't gonna come for a few years and you've got patent expenses and things like that. So you can do it.

Charles (: 30:49

a really

good example though, cause what I love about service businesses is that they are pretty easy to start. Most people don't want to do them because they're hard work. Like that's kind of the limiting factor, not necessarily. Can you find the clients? At least generally that's what I've seen. That's not a hundred percent accurate all the time. but what I love about that too, is it's open to anyone. Right? So we talked about necessity as you getting laid off, which stinks. And I've been through three rounds of layoffs at companies I worked for.

⁓ luckily I've never been impacted, but, just so hard, but something else that could be necessity is what if you're at a dead end job that you just can't get out of and you don't really see any progression and it's hard to change. If you see your job getting replaced by AI, things like that, like there are other worries too, and other necessities and a service based business, you can start on the side or you can find a client right away. can easily scale and it's.

Seth Jenson (: 31:16

So stressful.

Yeah.

Charles (: 31:41

It really is doable. And so I love service-based businesses because of that. really easy to get your foot in the door. Whereas like developing an application could, you know, it's a 10 year time horizon sometimes. Yeah.

Seth Jenson (: 31:52

with a lot of risk, yep. And the

entrepreneurship acquisition path is really powerful if you're in a situation where you've got either funds that you can invest yourself or investors that are willing to take a bet on you as an operator, that can be a really powerful zero to 50 path as well in a tighter timeframe. And usually acquisition style businesses have a salary built in, you know, so that you can pay yourself day one.

which is really nice. So there's lots of opportunities for ⁓ someone that's really up against the wall and just needs something to pay the bills. But just be aware of the path you're taking. there might be some paths that you just really need to take versus again, ones that you're more passionate about or have longer timeframes. So I think there's not a bad reason to start a business. think starting a business makes sense for way more people than realize.

⁓ Because it's not as hard as you think in some senses. It's way harder than you think in others. But success is possible for anyone, right? If they're willing to do the work, right? So the risk profile I think is lower than most people realize. The amount of work it takes to be successful is higher is maybe how I'd word that. But whether it's getting rich, having control over your time, being your own boss, bringing your passion to life or just pure necessity.

Charles (: 32:44

You

Seth Jenson (: 33:05

there is a path for you ⁓ to be successful. Just go open-eyed, know the pros and cons of that pathway and set really specific goals, right? Have your what and your why clear, put it somewhere where you can see it so that you can be really clear about the how and come up with plans to get there in a way that just keeps you excited every day, wakes you up and you look at that goal and say, all right, I'm gonna solve more problems today to get more revenue and get those goals. So.

I love entrepreneurship because it's a hope-filled enterprise. It is powered by hope and energy, which is just why I love my job helping entrepreneurs.