‘If you love space (and I do),’ says regular Quest contributor, Steve Bulleyment, director of Lincolnshire-based specialist auto locksmith company Car Key Man, ‘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.’ Could you apply the same enthusiasm and belief to the ‘reusable rocket’ of your potential new business?
Being able to strap a Tesla car, including dummy pilot, and playing David Bowie en-route to Mars surely tells us something. Elon Musk has earned the right to do what he wants – needing neither permission nor blessing from anyone.
This got me thinking about business, and how much it’s like the reusable rocket that Musk has developed. The stages that a rocket goes through are very similar to the journey you take when you leave the safety of Her Majesty’s Armed Forces and start a business on civvy street. If you’re thinking about being your own boss, you need to keep one 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 up all his spare cash and was bailed out by a billionaire to carry on the project. So how much rocket fuel, in the case of your business, do you need? Let’s look at the stages.
Car Key Man YouTube Channel
Building your rocket
This starts off being 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, in order to trade, I needed stock, a software licence, Yellow Pages, etc. So, my initial costs were in fact £25,000. Straight away, I was £10,000 over budget! Who knows the total amount that Elon Musk invested into SpaceX?
This is 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 begin trading. You’ll have your first ever phone call, the first ever customer (I still remember mine), and then it’s up to you – and you alone – to get on with it.
There’s also a tremendous amount of fuel used in 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 SpaceX, which 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 are burning fuel, or cash.
So, you’re off the launch pad 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 at which 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 feel it’s starting to work, you run 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 which 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. (And 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.
Steve’s business, the Car Key Man, is a specialist auto locksmith company covering Lincolnshire. Launching in 2004, Steve spotted an opportunity to solve the problem of replacing lost and stolen car keys. The company now offers workshop facilities as well as a mobile service. Recognising the needs of concerned vehicle owners, it offers free consultations to find an affordable solution to the growing number of car key problems.
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 reusing the parts of the rocket that would normally be lost. His very public catalogue of failures must have made his final success even sweeter. On 21 December 2015, SpaceX landed its first stage, at Cape Canaveral in a perfect landing; it made history. Likewise, just four months later, it 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. You need to think about this when setting up, whether or not you are planning to sell up. If you fell ill suddenly or, worse still, died, all of your effort is wasted if it’s not able to be sold.
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Of course, none of us has plans like SpaceX. However, to get repaid for all the work that it took should 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, it has done the hard work, money can be saved every time it flies, and it’s market leader in space travel.
Whether you have plans to build a bigger business or want to build a lifestyle business where money is less important, you 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 burned 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.