You want to quit your job to start a business. Nobody can blame you. There are many wonderful things about being your own boss. However, it’s a risky endeavor. It’s not all sunshine and roses. Moreover, you can lose a lot of income at the beginning of starting a business. Should you really quit your job? Or should you perhaps scale back on your regular work as you first start your business? There are a lot of things to take into consideration when you make this decision. Let’s explore the pros and cons a little bit.
Why Do You Want to Quit Your Job and Start a Business?
This is the most important question to answer before you actually quit your job and start a business. And, in fact, you should answer it as two separate questions:
- Why do you want to quit your job?
- Why do you want to start your own business?
Many people consider it to be one question. However, if you are honest about the answers to both parts of the question then you’ll be a lot clearer whether or not this is the right step for you.
For example, let’s say that you answer part one: “I hate my boss.” As you dig into part two, you may realize that you don’t actually want to start your own business at all. In contrast, you simply don’t want to work for that same boss anymore. Realizing this early on will go a long way towards making sure that you’re taking the next right step in your career.
Alternatively, let’s say that you don’t have a clear answer to part one. You know that you want to start your own business because there’s a particular cause that you’re passionate about. Could you keep your day job and just volunteer in a capacity that fills that need?
If you are very clear about why you both want to quit your job and why you want to start a business then you’re well on your way to making smart choices as you move forward.
Benefits When You Quit Your Job to Start a Business
When you quit your job and start a business, you do reap some benefits:
- You immediately begin to work for yourself. This gives you a huge feeling of freedom. However, don’t discount how much responsibility it requires.
- You have plenty of time to devote to your new business. After all, if you regularly work 40+ hours per week and then you quit, that’s 40+ hours per week to devote to your new passion project.
- You avoid any conflict of interest. If you want to start a job that’s similar to what you do now then there might be a conflict of interest that would prevent you from staying at your current job. Review any non-compete agreements and related terms of your contract.
If you are the type of person who works best under pressure then you might find that it’s worth it quit your job to start a business. You could thrive under the stress of trying to make a go of it when you don’t have another income to fall back on. The time you free up by quitting your job, and the freedom you get from working your own schedule, could be worth it. But don’t fail to take into consideration that there are drawbacks when you quit your job to start a business.
Drawbacks When You Quit Your Job to Start a Business
Research indicates that entrepreneurs do better if they stay at their job when first starting a business. There are some big risks and drawbacks to the decision to quit your job and start a business. Those drawbacks include:
- You’re obviously no longer drawing an income. Therefore, there’s a lot of pressure on your new business to succeed dramatically and right away. You aren’t giving it enough time to scale up.
- It could be harder to get loans for your business. If you can’t show that you’ve got an income coming in then getting credit for your new business could be more difficult.
- If the business doesn’t do well, you might not be able to get your old job back. After all, the economy isn’t thriving right now. If you’re lucky enough to have full-time employment then you might not want to sacrifice that to start your own business.
Starting a Business: What to Do First
If you decide that you do want to quit your job to start a business, then you have to take that decision very seriously. You have to put your all into this new endeavor if you want to make it work. Here are some of the things that you need to do before you even quit your job:
- Create a business plan. It’s imperative that you know exactly what you plan to do and how you plan to do it. You need goals, milestones, and timelines. Of course, those may shift with time but try to get a solid plan in place.
- Crunch the numbers. Figure out what it’s going to cost you to start a business. Consider the initial costs, your own paycheck for the first year, and all other first-year expenses. Figure out how to make that work before you quit your job to start a business.
- Start working. Don’t delay getting your first clients or customers. You might want to get the first few clients lined up before you quit your regular job.
- Network. Just because you’re working for yourself doesn’t mean that you don’t need other people. Build your team. This might mean hiring people, working with consultants, or simply networking with other entrepreneurs. Make sure that you have a group of people in your corner.
Weigh the pros and cons before you quit a job to start a business. Does it make sense for you, considering the economy, where you are in your career, and what you truly want from starting your own business? The more thought that you put into the process ahead of time, the better chances you are to get the results that you desire.
- Starting a Business? Don’t Quit Your Day Job.
- Sorry! You Can’t Actually Start a Business for Free
- How Much Money Do I Need to Start a Business?
- 10 Life Choices That Will Hurt Your Finances
- When You Want to Quit Your Job, But Can’t
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