Question: I have been a part-time entrepreneur for the past two years and my question is this: When do I know that it is safe to quit my day job and concentrate full time on my business?
Answer: It is no easy feat running two enterprises at once, be it a job and a home-based business or a business and a family. Yes, we live in the age of the multi-tasker, where gadgets like smartphones and tablets make such endeavors easier, but easier is not the same as easy. Indeed, taking an idea, executing on it, making a profit, and then keeping it going takes a lot of mental, emotional, physical, and financial bandwidth. It demands total commitment, dedication and attention.
But if you can’t give it the full attention that it deserves because of life circumstances, either family or another job or some other commitment or circumstance, while, not fatal, it is not good either. The nature of a startup is that the sooner you can give it 100% attention, the better because that is how you give it the best chance of success; just as a baby requires your full attention, so too your startup baby.
But this caveat is also important to keep in mind: The timing has to be right. If you started a business with the coffers flush, bully for you and you get to go forward at full speed. But for everyone else – for the part-timer, the weekend warrior, the bootstrap entrepreneur – the question becomes: When I can I in fact make this my full-time occupation?
Here are Top 5 Signs that You Can Quit Your Day Job:
5. You are headed in the right direction: Starting a business at home, at night or on weekends requires that you not only keep up with your regular job, and your home or family commitments, but that you dedicate the bulk of the rest of your hours to the gig.
As such, it will take a while to get off the ground, gain altitude, and fly in the right direction. But once you do get past that initial start-up phase, once you have a tailwind and are headed in the right direction, then you know that you are on the verge of safely letting go of the safety net that is your job.
4. You know what you are doing: A correlation to the previous sign is that you know you can make it a full-time endeavor once you get past the novice stage and actually know what the heck you are doing.
Sure, you can fly earlier but if you aren’t ready, if you don’t know really what works and what does not, you will more likely fall from the nest then soar with the eagles.
3. You have reliable customers: Notice I did not just say that you have customers, but that you have reliable customers. They are not the same thing. Customers come and go. They stay, buy, and fly. (And OK, I’m done, having clearly beaten this flying metaphor to death!)
Reliable customers are different. They found you and like you and like working with you or shopping from you. Reliable customers give you both the confidence and the financial wherewithal to do it on your own without the safety of the every-two-week paycheck, benefits, and healthcare.
2. You make enough money to (almost) live on: Again, notice the “almost.” If your part-time business gives you enough of an income that you are thinking you can do even better of you go full-time, you are probably right. One of the great things about a job is that you do in fact get that scheduled paycheck. But if your part-time business is bringing in enough income such that you are contemplating flying the coop (OK, sorry, I’m not done), then you are probably ready.
But this should also mean that you have saved up some money. Quitting will hit your wallet, as will making less, as will ramping up, as will buying your own health insurance and more. That money you are making in your extra endeavor now should become the nest egg of its full-time version.
And the #1 sign you are ready to quit your day job . . .
1. You can’t not do it: When you get to the point when the business is going so well, when opportunities are presenting themselves, when its so fun and profitable that you miss it and think about it when you are not doing it, when not doing it more costs you money, then you are ready to do fly like the wind, my friend.
Today’s Tip: As we all know too well, the economy has changed a lot since the economic meltdown of 2008. So how does a company, whether it be large or small, survive and thrive in this new environment? In the new book Small Town Rules, authors Barry Moltz and Becky McCray suggest that the secret is to adopt small town rules. By investing for the long-term, by adopting new technologies, by helping one another, by planning for change, any entrepreneur can navigate this new economy.
It’s really a great book. Steve says check it out.
Steven D. Strauss is a lawyer, writer, and speaker, and is one of the country’s leading experts on small business as well as an international business speaker. The best-selling author of 17 books, his latest is the all-new 3rd ed. of The Small Business Bible. You can listen to his weekly podcast, Small Business Success Powered by Greatland, here, visit his new website for the self-employed, TheSelfEmployed, here, Follow him on Twitter, here, and Like TheSelfEmployed on Facebook, here. You can e-mail Steve at: sstrauss@mrallbiz.com. © Steven D. Strauss