If you’re not starting a new business right out of school, leaving a permanent job to do so can be a scary proposition. Quitting your job can be one of the most rewarding yet scary things you do in your life. In order to do so, you’ll need a lot of advanced planning especially to make sure you are financially secure enough to step away from the 9-5 lifestyle.
First of all, while this might be hard, you’ll have to rethink the way you live so that you can save money. Eating lunch out? Daily Starbucks? Weekend dinners with friends? After work drinks? Those might have to become a thing of the past as you save up money. Remember, you will be working with a reduced income and you have to take that into consideration.
The first thing you might want to do is see if you can switch to part-time hours. This will enable you to bring in steady (although somewhat depleted) income while you get your business off the ground. As your business grows, you can continue to cut back on hours until you are ready to quit your job full-time and rely solely on the income your business is generating.
Another option is to consider doing some freelance work which means you will still be working for someone else and bringing home money but at least freelancing gives you the option of working on your own terms. That way you can decide what hours to spend freelancing and what hours to start on your new venture.
Remember to develop a budget and stick with it before quitting your job. You should definitely try to put away a few months worth of pay checks into your savings account so you won’t be stressed while trying to pay the bills at the same time you are starting up your company. “A general rule is to try to put away a minimum of 6 months worth of expenses but the amount you might want to put away will depend on how much income your business is bringing in and how many expenses you have on a monthly basis.”
From my research, some experts seem to be divided on how to go about starting up a new venture. Some feel it’s wise to make a clean break right away and devote all your time and resources to your new venture whereas others feel you should stick with your day job in some capacity and test the waters. That is a judgment call you will have to make for yourself. If you stay on at your day job, you might be distracted and not be able to put in the time and effort needed to get your company off the ground. Or if you leave right off the bat, you might be digging yourself deep in a financial hole which may hinder you from being able to make a success of your start-up. You have to think critically about this. Some experts suggest that aspiring entrepreneurs wait until their new venture is generating about two-thirds of their full-time income before they quit their day jobs.
Put some thought in before you quit your job to how you’re going to advertise your business. By having a clear plan you will be able to get up to speed in terms of income generation much faster than if you quit your job and then try to figure out how to generate your sales. “Go through exercises where you try to determine what your target market is and what your ideal customer looks like and thinks like and then try to figure out the best way to advertise to that ideal customer of yours.”
Those who start a business while working 9-to-5 as an employee choose several paths: Weekend entrepreneurs (work on the start up on weekends), webpreneurs (build an online business), and part-time entrepreneurs (work before, in-between, or after your office hour). These might be some good options for you to think about before leaving your job full-time.
My thoughts on the subject are mixed. I freelance and have my own consultancy. This gives me a sense of financial security. I plan to eventually stop freelancing and devote myself full-time to my new venture but I’m not ready to do that – not because I don’t want to but because I can’t afford it. If you do plan to stay on at a job in some capacity, you have to be committed to long hours and late nights and weekends after you leave the office so that you can make a success out of your new venture.
Here are some articles that might help you make this tricky decision.
“Ten signs that you are ready to quit your job and start a new business”: http://biggsuccess.com/bigg-articles/quit-your-job-and-start-a-business/
“Ten really good reasons to quit your job and start your own business”: http://managementconsultingnews.com/article-michael-katz-4/
“5 ways to quit a job and start a new biz”: http://www.microsoft.com/business/en-us/resources/expert/5-ways-to-quit-a-job-and-start-a-new-biz.aspx?fbid=EZZd-1p6d6b
“When to quit your job and start a new business”: http://www.businessweek.com/articles/2012-03-06/when-to-quit-your-job-and-start-a-business
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