Leaving your job to start a business is one of the most important decisions you will make in your life. It is inherently risky. You’ve chosen personal freedom over job security. But you may also come to realize later, as many others have before you, that personal freedom provides security.
The good thing about planning your exit is that you get to decide when you want to leave. Many entrepreneurs put up their own businesses after being laid off. If you decide to quit your job and start a business, you can decide things on your own terms and at your own pace.
There is, however, no such thing as a perfect time to embark on business ownership. You’ll never get married or have children if you wait for the perfect time!
You can always find a new career, but you only have one life to live. So, here are six signs that you’re ready to leave your job and start your own company. You don’t have to check every one of these boxes. Any sign could be enough to convince you to quit your job and pursue your side hustle full-time. If you check all of the boxes, though, you have a stronger case for quitting your 9-to-5 job.
You’re Earning a Healthy Income
Some argue that it should be two-thirds of your full-time salary, while others say that it should be at least as much as your 9-to-5 salary. Forget that.
Your full-time job may pay you far more than you need right now. Your start-up does not need to cross that mystical line to be successful. Living a healthy, balanced life might only require half of what you’re making now.
Determine how much money your company needs to make for you to live the life you want. Are you willing to forego some TV subscriptions or Friday night outings to lower your minimum income requirement? There is no right or wrong answer; just be honest with yourself about your income goals.
Some people may be ready to leave their 9-to-5 job if their side business earns them $25K annually, while others may choose to wait until they earn $100K per year. This is usually determined by several factors, such as your age, civil status, number of children, or home loan. All of these factors influence (or should influence) how much risk you can handle. Take some time to think about what you consider to be a “healthy income.”
You’re ready to give up your full-time job if you’re making that much money from your side hustle. Consider consulting a financial expert if you’re having trouble figuring out a number (or even if you aren’t). They can assist you in determining your required income.
You’ve Built a Reserve Fund
If you don’t have enough money in your bank account, your business may not have enough time or funding to take off. Start creating an emergency fund with the money you earn from your full-time job if you haven’t already. The more money you save, the longer you’ll be able to focus only on your side hustle.
Some businesses and ideas take longer to get off the ground. They have higher start-up costs and longer lead times. That isn’t to say they aren’t good concepts, but they do require sufficient time and funding to be realized.
The worst-case scenario is that you quit your work, establish your firm, and then have to return to a lousy job due to a lack of funds. Try to avoid this situation as much as you can.
The more time you work at your 9-to-5 job, the more money you’ll be able to save. However, for would-be entrepreneurs, this expanding safety net may become a trap. You would want to keep growing it and then eventually fail to quit your job.
The numbers will be determined by your startup’s needs as well as your lifestyle choices. However, you should save at least enough money to get by for the first six months.
Calculate the numbers and set a goal amount. You don’t need a large savings account, but you do need an amount that will not put you under financial stress. If you’re constantly checking your bank account, your brain won’t be in the right place, which can lead to poor decision-making.
Once you’ve saved enough money, you can confidently quit your job and focus solely on your business.
You Have a Tested and Proven Business Model
Wait until you’ve proven an idea before quitting your day job. The time to figure out how to make money is not when you’re staring at your bills at the end of the month.
You should ideally have discovered, developed, and validated a business model that only requires more time and money to run. If you’re planning to be a freelance writer, for instance, you might need to work validate your talent and market by writing for a few paying clients for a while. Once you have a proven business model, you can safely quit your day job to attract more clients.
That’s just one example; other concepts and models may take longer to prove. Some ideas may appear brilliant at first, but they will fail in the long term. Learn how to sustain your business by conducting research.
Do you have a sufficiently large market? Will competitors be able to copy your product or service? Can you gradually boost prices? Do you need to recruit help eventually, or will you be able to handle things on your own? The answers to these questions will reveal whether or not your business concept is stable and sustainable.
You Can’t Get Your Mind Off Your Side Hustle
Sometimes, side hustles are just a fun way to make some extra money. Every side hustle does not have to be turned into a full-time business. For example, just because you enjoy driving for Uber on weekends does not imply that you should give up your day job and be an Uber driver Monday through Friday.
Some side hustles, on the other hand, aren’t designed to be on the side—they’re meant to be the center of your attention. If you’re enthusiastic about a project and can’t stop thinking about it, there’s a strong possibility there’s more to it than being a sideline.
Assess your level of enthusiasm for your new venture and be honest with yourself. Is this just a fad, or do you see yourself enjoying it in a year? Discover what makes your side hustle better than staying at your full-time job.
Do you desire the independence that comes with being your own boss? While that is a good reason to start your own business, it does not necessarily justify resigning from your full-time job (yet).
Are you excited about the possibilities for profit? Money can’t buy happiness, but it can help you discover it. However, money alone won’t always be enough to sustain your passion for your business, so make sure there’s something else in the mix.
Do you have a preference for this nature of work? Your full-time corporate job may be in an industry that does not interest you, whereas your startup is in an industry and field that does. Working on projects that you are passionate about will not only benefit your career but also your entire life.
You Have a Strategy
Going full-time with your business may sound exciting and fun, but it must ultimately generate revenue and support your lifestyle. Before you take the plunge, prepare a plan, set budgets, and timelines. Having a plan may not sound thrilling, but it puts you up for long-term success. Your story might not receive as many “oohs” and “ahs” at future conferences and family gatherings, but you’ll have a better chance of succeeding.
Set a date for when you will fully commit to your side hustle, and then plan how you will spend your newly discovered free time. Plan out how you will spend your time, and do your best to stick to it. Begin by making a to-do list. What must take place on your first day? What about the early days or weeks? Do you have a personal computer you can use?
You’re Prepared and Willing
Just because you think you’re ready to go all-in on your side hustle doesn’t mean you are. Building a cash cushion, proving a business plan, and bringing in steady income are all excellent financial indicators that you’re ready to run your business full-time, but it doesn’t guarantee you’re mentally or emotionally ready. Wait until you’re sure you’re ready.
You could be in the midst of a promising romance or completing your final semester of college. You may have recently experienced a life-altering event, or you may wish to relocate across the nation. Whatever situation you’re in right now, the best moment to quit your work isn’t necessarily now. It’s sometimes wise to wait until the appropriate time comes.
Examine your overall health, including your physical, mental, spiritual, and emotional well-being. Are you happy with those areas of your life? Is it better or worse for your health to jump from a stable full-time job into the thrills and perils of the startup world? Breaking free from the monotonous corporate life may be the solution to some people’s issues, but for others, it might cause excruciating amounts of pressure.
Know, though, that you’ll never be fully prepared to take the plunge. Diving into the unknown is part of being an entrepreneur. No one is ever prepared to graduate, marry, have children, purchase a home, relocate, or quit their job to start their own company. Nonetheless, we make the transition.
Assess your readiness by being honest with yourself. You don’t have to rush anything because you have time – thanks to your full-time job.
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