Trying to figure out the best time to move into full-time entrepreneurship is a daunting task, but it helps when you consider the following:
Your responsibilities at home - If you are single and your lifestyle is relatively cheap, then you may be better prepared to take on the risks of leaving your day job. And if you’re a recent college grad you may be able to move back in with Mom and Dad if money gets tight. By contrast, if you have a spouse and children depending on you, or heavy debt responsibilities, it might be better to keep a steady paycheck until you’re sure the business can sustain you. Always make sure you have at least six months of living expenses saved so you don’t have to dramatically change the lifestyle of your family. People who cannot afford the risk of losing a steady paycheck might be better off keeping the business a part-time venture.
The type of job you have – If you are working in an industry that offers flexibility it may be easier to slip in and out of your day job at will. For example, experienced waitresses, bartenders and cab drivers are in relatively high demand and you can usually find a job like this pretty quickly when necessary. It is also possible to continue working part time while you build up your business. On the other hand, most corporate jobs are more demanding and require at least 40 hours per week.
Your risk tolerance – Anyone who has ever left their day job to pursue a new venture might find themselves awake in the middle of the night wondering, “What did I do?” However, some people have a greater tolerance for risk than others. One entrepreneur might find that it gives them an adrenaline rush akin to riding a rollercoaster, or it spurs them to work harder than ever before. But others could suffer from anxiety that won’t quit. If the thought of starting your full-time business without a back-up salary is too stressful for you, then it’s probably not the right time to do it.
Your support team – They say working for yourself can be a challenge, but it is even more so without a reliable support system. Be sure you have a few mentors and friends who are willing to offer advice when you need it. Instead of chatting with your coworkers around the water cooler, you may want to call someone you trust for a brief discussion about the business. It can also help to share an office space with another budding entrepreneur. Not only will this save money; it will give you someone to bounce ideas around with.
Your business – Does your small business already generate a decent income? Do you strongly believe that if you spent a lot more time doing it, it could be even more lucrative? If it didn’t increase right away, how long could you live on the current income? All of these are important considerations when you’re talking about quitting your day job. Perhaps you need to invest more money in the business instead of more time. In that case it might be better to look into small business loans or stay in the workforce long enough to save some money. Ideally you will want to have enough to sustain yourself and your family without relying on a regular paycheck.
Making the transition from employee to entrepreneur can be difficult, but it is not impossible. A lot of people will tell you to dive in headfirst and make it work, but that’s not always a great idea. It depends on many other factors. In the end, quitting your day job at just the right time will play a major role in your company’s success.
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