Should I Quit My Job to Start My Own Business?Jun 23, 2023
I often get the question, "Should I quit my job to start a business?" This is a complex question and I'll try to answer it taking the nuances into consideration. In short, there are four questions I like to ask:
- How much savings do you have set aside?
- How much will it cost you to live?
- How much will your business cost?
- Is your current work supportive in starting a business?
When working with clients, I inquire about their savings and urge them to consult with a financial advisor, if available, to determine their cost of living. While it's possible to reduce expenses, many clients are hesitant to do so, making it important to have a clear understanding of their financial situation.
While it takes some time to determine what business to start, generally, a service-based business often requires less startup capital compared to product-based or retail businesses. Since service-based businesses rely on utilizing your existing skills and talents, you can often launch them with minimal upfront costs. However, product and retail businesses, that require financing will often require you to have income or assets to leverage against your loan, so maintaining your current job or having a job might be important in these circumstances. Therefore, having enough money to cover living expenses is crucial, and additional cash, income, or assets may be necessary for product or retail businesses.
Another aspect to consider is whether your job supports your business aspirations. If you despise your current job and possess sufficient savings and financial flexibility, quitting may be worth considering.
On one hand, having savings that allow full investment in your business can provide dedicated time and resources, potentially leading to a faster launch. This approach enables wholehearted focus on the venture without job-related distractions. However, it's important to recognize that building a profitable business takes time, and there may be a period of uncertainty before achieving financial stability. If you can handle the stress of not having income for some time and commit to launching quickly, this can be a great option.
On the other hand, if you enjoy your job, starting a business or side hustle while still working is viable, especially if you have several hours each day to dedicate to building your business. This approach ensures financial stability during the early stages of your venture. Although juggling a job and a business requires managing divided time and energy, prioritizing security and peace of mind by maintaining a job can help alleviate financial stress.
Over the years, I have observed three job possibilities that allow my clients to build their business successfully while maintaining balance:
1. Some clients choose a job that is relatively easy and allows them to sustain their business financially. This is particularly common among clients who have been in their current job for a significant period (and are potentially bored with it). They possess extensive experience and expertise in their job, allowing them to handle it effortlessly.
Alternatively, they may choose an administrative position that aligns well with their skills and presents relatively low complexity. This strategic approach grants them the valuable resources of time and energy, which they can then invest in launching and expanding their business.
2. Another strategy is gradually reducing their working hours in their current job to part-time or ¾ time. By freeing up more time and energy, they can dedicate themselves to their business. This approach allows for a smoother transition and ensures they have sufficient resources to sustain themselves while building their business.
3. Some clients opt for a job in the same field or industry as their business.
Some clients opt for a job that is in the same field or industry as their business. For example, I've seen career coaches work at college and universities while simultaneously building their own private practice. This approach enables them to gain valuable skills and expertise in their chosen field while developing their own business. It provides a supportive environment for growth and helps them establish themselves as professionals in their industry. However, it's important to ensure there are no conflicts of interest between your job and your business. If in doubt, consult an attorney.
If you decide to work a job while starting your business and your goal is to eventually work full-time in your business, it's important to have a clear transition plan. Set specific goals, timelines, and milestones to gradually reduce your reliance on the job income and shift your focus more towards your business. This ensures that you're actively working towards building your business full-time while maintaining financial stability.
If you decide to work a job while starting your business and aim to eventually work full-time in your business, it's crucial to have a clear transition plan.
Set specific goals, timelines, and milestones to gradually reduce your reliance on job income and shift your focus toward your business. This ensures that you actively work towards building your business full-time while maintaining financial stability.
The decision to have a job while starting a business depends on individual circumstances, financial situation, risk tolerance, and goals. I encourage you to evaluate your options carefully and choose the path that aligns best with your entrepreneurial vision, providing necessary support and resources for success.
And of course, if you want help thinking this through or support in starting the right business, click here to schedule a consultation with me today and we can discuss your options.
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