As the Client Services Manager at a technology based business incubator I have the opportunity to watch trends in the startup world first hand.  One trend that has been very interesting over the past 6 months is that traditional bricks and mortar businesses are going mobile.  When I say, “going mobile” I am not talking about building mobile apps, instead; they are abandoning the traditional bricks and mortar building for a mobile office, store front, or restaurant.  Here are 3 examples:

1. Mobile IT Company – This company provides IT services but rather than renting an office they purchased an RV and put that office rent toward a loan to buy an RV.  The RV acts as an office with all the tools and equipment needed to fix anything.  This reduces risk because he can find customers anywhere.  If he starts the business in Chicago and it doesn’t work out he can simply move to another city where there is less competition.
2. Mobile Boutique – This is a very interesting company that purchased an old FedEx truck, painted it and turned it into a mobile boutique.  The business model is similar to companies like Mary Kay, where she actually drives her mobile boutique with all the latest in fashion to host homes.  Other women will host and promote the party in exchange for store credit that they can use to purchase a new item.  The business model reduces risk because the business doesn’t require nearly as much overhead costs as a traditional bricks and mortar store.
3. Mobile Food – There are a large number of food trucks in major cities around the world, and they are starting to come to smaller cities as well. The advantages are simple, you can drive where customers are, you don’t have to pay higher rent prices for the most trafficked areas, and overhead costs are much lower for a truck than a full blown restaurant. View our food truck start up financial plan template.

All three businesses are taking advantage of mobile to transform an old model of doing business, into a lean, highly profitable business.  How can you take advantage of mobile to transform your business model?

If you are bootstrapping a business on the nights and weekends while you keep your day job you are probably trying to find a way out of your job.

Hold on!

Before you do that, let me explain why an alternative source of income is critically important if you want to secure a loan for your early stage business.

Banks look at your “Global Finances” which means they look at your personal + business finances.  The banks wants to know that you can pay back the loan even if the business fails.  Often times business owners come to the bank and say something like this, “I just quit my job to work on my business full-time, things are going well, but I could really use a loan to help secure things a bit.”

The banker translates that as, “I am in trouble, I quit my day job too soon, and now it is getting stressful because I don’t know if I can put food on the table next month.”

You are most likely to get a loan when you don’t need one.  A great example of a dream loan applicant is a recent microloan applicant that I met with.  He started a business 9 months ago and is working on his business at least 40 hours a week.  He also has a full-time job and his wife works full-time.  This proves a lot to the banker:

1. You are committed – you don’t “have” to start this business, you and your wife already have jobs, so you must be committed to this business.
2. You work hard – Putting in 80+ hours of work a week for almost a year goes to show that you aren’t afraid to work hard, and you will work hard to pay back your loan.
3. You have backup income – This particular business owner was not pulling a salary from his new business.  This is a great situation because you don’t have to make the choice between paying yourself and making a loan payment, you don’t need the salary right now.

If this business owner had already quit his day job I would be terrified of this loan application, but instead I feel confident that the loan will be approved simply because he kept his day job until it was painful.  Keep that in mind as you debate when to leave the security of your day job.