Want to quit your job and start a business? Read this first.
Quitting your job and starting a business is easier said than done. There are a lot of emotions that come into play not to mention the whole, "How am I going to eat and pay myself?" conversation. I've worked, mentored, coached people into leaving their 9-5 and starting a business. I've seen what works well and what doesn't work.
The thing to know is that leaving your job and launching a successful company can be done. Here are a few key pointers and questions to ask yourself before quitting your job:
What's your comfort level?
The only thing certain about entrepreneurship is that it can be unpredictable, especially in the beginning.
In the beginning you’re still figuring everything out from your product offering, target market, your marketing strategy, your expenses, what a normal day looks like, consistent clients and no day is ever the same. Your income is usually never the same either. You have to be comfortable with being uncomfortable and have the persistence along with the patience to ride the wave that all entrepreneurs experience in the beginning.
What do your monthly expenses look like?
This is so important. Before you do anything tally up your monthly expenses and see what amount you need to clear in order to survive every month especially in the beginning. Monthly expenses can include rent/mortgage, car payment, insurances (renter’s/home owner’s, health, car, dental), student loans, utilities, food, going out, phone (this may look different if you have a family). It is vital to know what you’re working with.
When I quit my job I had the luxury of doing so at a younger age; no family or kids although I had just about every other expense listed above including a student loan payment that could have passed for a rent payment ;)
You have to do what is best for you and everyone's situation is different.
Where there is a will, there is a way.
How much do you have saved?
No amount is the right amount because everyone is different. We all live in different cities, have different expenses. The important piece is to ask yourself, “What am I most comfortable with?” And it also depends what is on the other side for you when you quit your job. When I left my corporate job and started freelancing I had a seven month project ahead of me so having a large savings wasn’t something I believed I needed, but again everyone is different. I highly recommend having anywhere from 3-6 months of savings to support yourself because you can’t predict the future, you can only influence it. Having a savings is like having an insurance policy.
The last thing you want to do is think about how you’re going to eat while building up your business. Having to think about basic needs during that time will take away from your ability to be creative and grow your business.
Once you figure out how much you need on a monthly basis, times that by how many ever months you think you need in order to be comfortable.
What are you doing on the side?
Depending on how serious you are with quitting your job and pursuing entrepreneurship this may look different.
The most successful people I’ve seen, who have quit their job to pursue their own business are the ones who launched their business while working their 9-5. These folks became laser focused with their side hustle and extremely disciplined with their time outside of their 9-5. They worked a few hours on their side-hustle before going into work, worked their 9-5 and came home to work more on their side hustle.
Building up a side hustle takes focus, persistence and work. You will find yourself saying no to happy hours, foregoing weekend events and not going out because you want to be an entrepreneur and you understand that short term sacrifice is worth the long term gain.
Expenses to factor in when you’re an entrepreneur
Being an entrepreneur has its own set of expenses like figuring out your own health care insurances (especially if you’re single). If you go through the government exchange as a single person with the lowest quality package who is fairly healthy, you could be looking at anywhere from $260 - $300 a month, not including dental. Dental can be anywhere from $40-80 a month depending on what you chose.
Disability insurance is another one. You may have been receiving disability insurance as part of your benefit package from your employer but when you start your own business, you are your employer. I can’t stress it enough to have some form of disability insurance. Disability is for if something were to happen to you that made you unavailable for work this way you would still have some form of income paid out to you so you could live.
Lastly, taxes. For every dollar your business brings in set aside roughly 20-30% for taxes (this percentage may vary depending upon your income and how you incorporate). Create a separate checking out for taxes that way when it comes time to pay your quarterly taxes you have money set aside.
Create a plan
So you’re working your 9-5 and you want to start your own business, now is the time to make a plan. To help you get started, consider the following:
What do I want the next 3-6 months look like?
How will I structure my days
What am I saying yes to and no to?
Remember, no one is the same.
I've worked with people that were able to leave their job in 6 months, others it took almost two years to get themselves in a position to where they felt comfortable. Remember, everyone is different and no one is the same. But the sooner you get started, the sooner you get started.
Podcasts to help get you going:
- SDH 088 - The Joys and Struggles of Entrepreneurship
- SDH 092 - Bringing Your Vision to Life
- SDH 129 - 10 Things I wish I would have Known about entrepreneurship
- Cordova’s 6 Part Journey:
- SDH 128 - (Part1) How to Write a Business Plan
- SDH 130 - (Part2) Learn to Love Your Problems
- SDH 132 - (Part3) 30 Day Business Card Report
- SDH 133 - (Part4) How to Write a Marketing Plan that Works
- SDH 134 - (Part5) Q&A: Ups and Downs of Building a Business
- SDH 137 - (Part6) Creating Community + Overcoming Fear