Quitting your day job to go full-time into a business is one of the most significant financial decisions you will ever make. It can be very good or terrible.
Quitting your day job to go full-time into a business is one of the most significant financial decisions you will ever make. It can be very good or terrible.
On the other hand, if you do enough market research, it's not a "big" decision at all. You may find it easier (and less risky) to go from part-time to full-time than it was for you to stay with the "9-to-5" routine in the first place.
Here are the signs you're ready to start your own business:
Where do you start? The first thing I would do is get some advice from someone who has already been through this process. Next, I would start doing some serious research to determine what it will cost to set up shop in the town or city where I plan to do business. Once I know those two things, it will be easy as pie to figure out whether going full-time is viable for me or not. So let's say you do some research and discover that the costs of doing business in the town or city where you plan to be located are low enough for you to consider quitting your day job and going full-time. What's next? The very first thing you should do is create a business plan. It doesn't have to be detailed, but it should contain the following elements: A description of your product or service (including a short version for your personal use).
You Have Enough Money Saved to Support Yourself
Your emergency fund needs to contain enough money to survive for at least six months if you don't work for at least half of that time. More realistically, I suggest you have three to six months' worth of living expenses saved up before you even think about making this kind of financial leap. Ideally, it would be best if you had about 12 months' worth of living expenses saved up. The reason for this is simple: Suppose you are working on your business idea for one year before you start taking orders. Let's say your expenses are $5,000 per month. In that case, you would need to have $60,000 saved up to have enough money to last you (and your family) for one full year without working. However, if you have only three months' worth of living expenses saved up, you will be in trouble regarding cash-flow problems. So, I suggest you build up a cushion of at least three months' worth of living expenses.
Your Business Revenue Exceeds that of Your Day Job
If not, you won't have the luxury of being able to slow down or even stop your day job without causing severe financial problems for yourself and your family. Remember, when you are starting, your expenses will almost always exceed your income. This is true even if you are doing things like going to cheap motels instead of staying at friendly hotels or eating at McDonald's instead of expensive restaurants. When your expenses exceed your income, you must make the difference by getting more revenue than you need from your day job. If not, you will soon be in serious trouble financially.
Is Your Business Concept Developed?
Develop a thorough roadmap for your company. A roadmap is simply a road map. It shows you the highways and byways that will take you from now to where you want to be. If you don't have a detailed roadmap, you'll just be bouncing around from idea to idea with no real focus. This will almost guarantee you a failure. Don't let this happen to you. Get Organized! Get Organized! Get Organized! It's easy to get overwhelmed when you first sit down to create a detailed roadmap for your company. However, suppose you keep a straightforward attitude and an open mind and don't get overly concerned about details. In that case, the process of creating a detailed roadmap for your company will quickly become fun and exciting. And, once you start getting organized, the flow of ideas will begin to come to you naturally, and the development of your roadmap will be a truly joyful experience.
