If you’re trying to get your own business off the ground while still working a regular nine-to-five job, you’ll no doubt be desperate to quit your day job as soon as possible. While it can be extremely tempting to get focused entirely on your new business, leaving your day job at the right time is essential.
Many people make the grave mistake of leaving too early, prompted by unrealistic optimism or a reckless willingness to take a significant risk. Before you do decide to quit your day job and commit yourself entirely to your own business venture, however, you should consider the following factors.
1. Your Current Responsibilities
If you are living on your own, single, and without children, then you’re already better equipped to leave your regular job and make a full commitment to jumpstarting your own business than someone who has to worry about family and other major responsibilities.
At least if you only have to worry about yourself, then you can take somewhat more of a risk. Also, the amount of money you’ll need to have saved up in case things don’t work out as quickly or as well as you would like is not as great.
Your family is not the only responsibility you need to worry about at this point. You should also consider your current financial situation. Always think of the worst-case scenario such as your business venture taking much longer to yield a decent return than you expected or, worse, not working out at all. As a contingency plan, you should ideally have saved up about six months of living costs to take care of financial and personal commitments.
See how Lori Cheek is supporting her entrepreneurial dream with side gigs.
2. Your Current Job
Some jobs are easily replaceable while others are not. If you leave your current job, you want to be certain that you can walk into another one with ease should you need to do so. However, if you’re working in a more specific field, then you may have difficulty getting a similar job in your area.
If you currently have a highly paid and skilled job, then you will generally want to think much more careful about leaving it, unless you are confident that your skills will remain in high demand in the industry for the foreseeable future. Also, think about unemployment statistics in your area and about the competition and challenges you are likely to face which may have even arisen since you were last job hunting.
3. Your New Business
Many novices make the mistake of leaving their day job too early; before their new business even starts to generate any revenue. While you do not necessarily need to leave your day job the moment your business starts making a livable income, you should be confident that that is precisely where it will be heading in the near future.
Ensure that you have as accurate an idea as possible of your business’s future performance. Be sure to analyze its performance since launch and, if there is a satisfying upward trend over a period, then you can much more confidently leave your day job and focus entirely on your ventures.
Not only should you be sure to have enough to sustain yourself – but you should also make sure that any major startup costs and other business-related expenses are out of the way for the time being. Leaving your day job only to find that you are running out of money to live on is one matter, but being confronted with new, business-related expenses accentuates the problem a whole lot more.
Starting a new business is exciting, but you need to plan wisely! Before you make the leap and quit your day job, be sure you’ve thought about things like health insurance and how much money you need to live each month to cover all of your expenses. Writing a business plan is one of the most helpful tools in planning for this transition. If you’re not sure how to write a business plan, grab our free business plan template here.
Are you thinking about ditching the cube for the world of entrepreneurship? If so, how are you planning for this career transition? Drop us a note below, we’d love to hear from you.