Starting your own business is exciting. You get to call the shots, and you never have to worry about being put in time-out again. But before you quit your job (or downsize to a part-time position), there are a few things you should know and consider first.
From covering health insurance costs on your own, to know when it’s time to fire yourself as CEO, here’s what every entrepreneur should think about before making the jump from employee to boss:
1. Is The Idea Of Your Job The Cause Of Your Dissatisfaction Or Is It The Company You Work For?
Consider the following questions:
Why are you dissatisfied? Is it your job or is it more likely that something else is at play, such as a boss who doesn’t value your input or a company culture that makes you feel like an outsider? If so, there may be ways to address these issues without quitting your day job.
Is the idea of quitting scary because it means taking on additional responsibility and possibly less money? If so, consider whether or not these fears are justified; after all, what have you got to lose if trying out a side-hustle fails miserably (besides some time)?
Are you even ready for what comes next in life if successful? Would work from home suit your lifestyle better than working from an office every day with coworkers around all hours (and potentially interruptions)? Or would being self-employed allow for less stress but also fewer benefits like sick days and vacation time each year (and perhaps longer hours overall).
2. Is There A Way That You Can Make Changes To Your Current Job That Would Allow You To Stay Where You Are?
As you consider the possibility of leaving your day job, there are some things to think about that might make it more difficult for you to make the move.
If it’s something you feel strongly about, and if there is a way that you can make changes to your current job that would allow you to stay where you are (and feel happy), then those are steps worth considering.
Here’s a list of some things worth taking into consideration:
What changes can I make in my current role? Do I want more hours? Can I change my location? My boss or team? Will it be possible for me to adjust my job description in any way so that it feels like what I’d love doing every day?
3. Are There Other Positions In This Organization That You Might Be Able To Take On?
Before you decide to say goodbye to your day job, take a look around. Is there another position within this organization that you could fill?
If the answer is no, then it’s time to start looking for a new job. This is where I personally think the majority of people stop when they start thinking about quitting their day jobs and becoming entrepreneurs: imagining themselves as entrepreneurs without having done any research on what that means or how they would go about doing it.
4. Has Anyone Else Ever Tried What You Want To Do And Succeeded At It?
I’m sure you’ve heard someone say, “You never know unless you try.” To that, I say, “True enough.” But what we don’t hear often enough is: You also never find out until after you try.
If there’s someone who has done what you want to do, it’s worth asking them about it. Their experience the good and the bad will give you insight into how realistic your goals are and how much work they’ll require if they’re going to come true.
This person might even be able to point out some things that were difficult but necessary for their success or failure (and either way will help keep your expectations in check).
Even if no one else has experienced success with exactly what you’re proposing to do, this exercise can still prove helpful by giving others a chance to share their experiences with similar undertakings and offer advice based on those experiences.
5. Will This New Endeavor Leave You With More Or Less Time To Spend With Your Family And Friends?
If you’re wondering how much time you’ll have for your family and friends after quitting your day job, it’s important to consider what kind of life you want. Do you have a family or other loved ones that you want to spend more time with? Are there hobbies or activities that they enjoy doing together? Do they live in your city or a nearby suburb?
Me, I had gotten married shortly after starting my career as an attorney (as many law students do). My husband was still in college at the time, so we only saw each other on weekends and during holidays.
In three years of marriage, I had become accustomed to our lifestyle: he was working on his degree while I worked long hours at my firm. We both knew that eventually one or both of us would need to quit our jobs to move closer together but which one of us should make the sacrifice first?
Ultimately we decided it would be better for him since he didn’t want another long-distance relationship like ours; however, this meant that his income wouldn’t be enough for us while we were relocating closer together which meant more debt than either of us wanted!
6. Do You Have Sufficient Savings To Support Yourself For Three Months Without A Paycheck?
This is a big one, so let’s start with some context.
The reason people think about this is that when you quit your job even if it’s to pursue something you’re passionate about it can be rough in the beginning. You won’t be bringing in an income and maybe even living expenses aren’t covered by savings alone.
So how much do you need? A good rule of thumb is three months’ worth of basic expenses (rent, utilities, etc.). If that sounds like a lot right now, don’t worry! You might just want to work here for a little while longer while saving up more money or figuring out how else you can make ends meet until then.
7. How Will Your New Venture Affect Those Who Depend On You?
If you have a family, friends, or other people whose lives are intertwined with yours, you’ll want to consider how quitting your day job will affect them. You’re not just responsible for yourself anymore you have other people depending on you too.
If they rely on you for financial support or emotional stability, then it may not be in their best interest if you quit your job without having another source of income lined up first.
Try to weigh out whether or not quitting will ultimately improve the lives of those around you by making more time for your loved ones and encouraging self-care and personal growth opportunities.
8. How Much Are Start-Up Costs Going To Be?
Before you quit your day job, it’s important to understand how much it will cost to get started. This can vary depending on the type of business you’re looking to start and what kind of funding options are available.
The good news is that you don’t need millions upon millions of dollars to get your business idea off the ground.
Many entrepreneurs start businesses with less than $1,000 in the capital and some don’t even need that much money!
But if you do plan on launching a more complex business or need more capital for equipment or employees, then start-up costs are going to be higher than a few bucks here and there.
When it comes down to it all depends on how much risk you’re willing to take with your money (and time).
You might decide not to risk anything at all is worth giving up your cushy 9-5 job for the potential payoff of starting something great from scratch but make sure before quitting any jobs for good that this decision is based on facts about finances rather than emotional reasoning.
9. What Is The Break-Even Point For This New Business Or Effort?
The break-even point is the point at which your new business or effort starts making money for you. It’s an important metric to measure because it helps you gauge whether or not the time and energy you’re putting into this new project will be worth it.
The break-even point can be calculated by adding all of your startup costs together, subtracting these from any anticipated profits, and then dividing that figure by how many people need to see your product for it to be profitable.
10. Have You Developed A Comprehensive Business Plan?
A business plan is a formal document that outlines your company’s goals, who will be involved in the business, how you will use your capital (if you have any), and what kind of marketing strategy you intend to employ.
It may also include information about your legal obligations as an employer, such as payroll taxes and employee benefits.
A good business plan should be concise, actionable, and realistic. The more detail it contains on how you intend to reach those goals, the better equipped potential investors or lenders will be in deciding whether or not they want to get involved with your project.
11. Do You Have A Relationship With An Accountant Or Financial Advisor?
As a business owner, you’re going to want someone who can help you make sense of your finances. The importance of having a good accountant is so crucial that it’s worth taking the time and energy to find one.
A good accountant will be able to conduct their analysis and offer expert advice on your finances, but they’ll also be able to spot problems that are arising in the system as well. A bad one could cost more than they save by allowing errors or oversights in the accounts.
How Do I Find One?
There are plenty of ways to find an accountant word-of-mouth recommendations are always a good place to start but online review sites like Yelp are great resources too!
If your friends don’t know anyone who has any experience with accountants, go ahead and check out Yelp yourself; there’s bound to be at least one local office that gets decent reviews from people around town when it comes down to things like customer service quality standards (this means how responsive/helpful staff members were during interactions).
You should also look for anything related specifically to bookkeeping services within these reviews because this part may vary depending on whether someone needs ongoing oversight versus just tax preparation every year.
The former may need more attention paid daily as opposed to monthly throughout March through April every year which would necessitate having someone else handle those duties while focusing solely on payrolls instead if needed
12. Is There Anything In Your Life Or Health That Could Seriously Interfere With You Being Able To Reach Your Goals Right Now?
If you have any serious health issues, or if your family has a history of heart disease, diabetes, or cancer that’s run in the family, it’s important to consider whether quitting your day job will be possible for you at this time.
Are you financially secure? Do you have enough savings to cover yourself until your business starts making money? Are there any outstanding debts that could get in the way of supporting yourself as an entrepreneur? If so, you may want to hold off on quitting until those things are resolved.
Also, think about how well your employer treats you and how much they value what it is that makes working there worthwhile for them. If they’re like most employers these days and let’s be honest:
They probably are then they don’t care about anything other than their bottom line and whether or not they can make money off of each employee (and themselves).
Does this sound like something worth leaving behind? Is there another job out there with better opportunities for personal growth or fulfillment outside of being locked into a 9-to-5 grind forever?
13. Are There Other Sources Of Income?
Are there other sources of income? It’s important to think about all the ways you can bring in money, even if they don’t feel like a sure thing. What are your other sources of income? Are they enough to cover your living expenses while you leap into your new business idea?
If not, can you save up some money (or dip into investments/retirement savings) as an emergency fund until your new business starts making enough for you? You may also want to ask family members or friends for help with financial support during this time.
Consider part-time work or freelance opportunities that will supplement your income as well. If you’re unable to find extra work in the field where you’d like to start freelancing, consider doing something else entirely it could be worth it if it means bringing more cash into the household while still keeping your day job!
Another option is government assistance programs such as food stamps and Medicaid; though these aren’t exactly ideal options because they require strict applications and often come with long wait times, they’ll give you some breathing room while working towards self-reliance
Frequently Asked Questions
How Do You Know If You’re Ready?
When you have the confidence and momentum to ask yourself this question, then it’s time to make a decision. You don’t need to quit right away; sometimes the best way to answer it is by trying your own business for a few weeks or months first.
Sometimes this will be enough for you to get a taste of what working for yourself does for your life, which could give you all the reassurance needed before quitting your job.
But if after some time of working on your business full-time and still feeling like something is missing from that situation, then maybe it’s time again…
What Are The Benefits Of Quitting My Day Job?
There are many benefits of quitting your day job and most often these come down not just on one but several fronts: more money (more time = more opportunities), less stress (less responsibility = fewer worries), better relationships (more freedom = more flexibility).”
How Much Money Do I Need To Quit My Day Job?
The first thing you want to do is make sure you have enough money to keep you going while your business is getting off the ground. You don’t want to find yourself in a financial crisis because of poor planning.
So it’s always good practice to take some time and make sure that when you quit your day job, you have a plan for what comes next. The more prepared and organized that plan is, the better chance there will be for success.
Will My Family Support Me?
If there are any objections from family members or friends about quitting one’s day job, this person must have their reasons for wanting to pursue something outside of their current path. It may help explain how they were unhappy with their current situation and how this change could help them feel more fulfilled or happy in life overall.
What If I Want To Quit But I’m Not Sure What To Do Next?
This is a great question, and something you should think about before you make such a life-changing decision.
If you’re still unsure about whether or not quitting your day job makes sense for your specific situation, talk with people who have done it before. Ask them what their experience was like and how they decided whether or not it was the right choice for them.
Will My Employer Be Upset If I Tell Him/Her That I Want To Leave?
If so, then maybe it’s best if you don’t say anything until after you’ve already quit!
Otherwise, there are ways of phrasing things to minimize any potential backlash from your boss or coworkers (for example: “I’ve come up with this great idea for an app/blog/etc., which could help our business grow significantly over time…and since we don’t have anyone else who does exactly what I do at this point…”).
If they get angry anyway no matter how nice things may seem at first glance then perhaps reconsider whether or not leaving would be worth pursuing in the first place.
Finally, remember that this decision is yours and yours alone. You probably didn’t get to where you are today by listening to anyone’s advice but your own, so don’t let anything in this article sway your decision either way.
I am a content writer, and I love what I do! Writing makes me feel like the words are flowing through my fingers, and then onto the keyboard, like magic. My experience as a writer has taught me that writing makes me feel good, as well as helps others to feel better too!