It’s no secret that many of us start our own businesses with the idea to quit our day job. We dream of the day we can walk up to our terrible boss, make a spectacle for the whole office, and storm out while yelling, “I QUIT!!!”. If quitting is the dream of every entrepreneur, when to quit is the real wake up call.
First Things First…Don’t Quit Just Yet
The prospect of starting your business is exciting! You have all these new, exciting ideas, you’re staying up all night dreaming about what it’ll look like and you start planning. Your plan looks great and you’re optimistic that you’ll start making money before you know it. You convince yourself that you have to go “all-in” if you’re going to make your business grow. You’ve got to quit your job and work every waking minute to pursue your business right? WRONG!
Quitting your job too early is one of the worst things you can do when starting your own business. In fact, you’re 33% more likely to succeed if you keep your day job when starting a business. By keeping your job, you eliminate a lot of the financial risk of starting your business. Starting a business is expensive, so having a steady stream of income is invaluable in the early days when your business is bleeding money faster than you can check your bank statements. The last thing you want to happen is you quit your job, start your business and run out of money before your business can support you. Now you’ve got to get another job and put the business on hold, often permanent hold, until you can figure it out again.
Signs it’s the Right Time to Quit
The first and best indicator of when to quit your day job is when you become the limiting factor of your business. Things are going well, you’re growing and you’ve realized that you can’t grow anymore with the time constraints of working a full time job. You have new clients or orders, or products that are ready to go at a moments notice, but you simply lack the time to grow. If this is your problem, congrats! You did it right. Quit your job, take the leap and soar off in to the sunset with your growing business.
You Have a Healthy Savings Account
Having a savings account to live off of helps dramatically when starting a business, especially if you have decided to quit your job before you’re making any real money. You should shoot for 8-12 months of living expenses in a savings account to make sure you can whether the financial storm that comes with starting a business. Even in spite of all of your planning, 99% of the time your business will take longer than you plan to turn a profit. 8-12 months of living expenses gives you nice nest-egg to focus solely on your business. Additionally, if you’re really growing and scaling the business during this time, you’ll inevitably need to dip in to this account to afford the growth stage of your business. That’s why we recommend 8-12 months of expenses.
You’ve Decided it’s Time
At the end of the day, the decision is yours. That’s why you starting this business in the first place isn’t it? To have the freedom to do whatever you want? There comes a point, no matter if it’s the right or wrong time (only time will tell),to go all-in on your business. No one knows better than you when that time is. So get out there, quit in an epic fashion and grow your business!
If you guys want to find out more about when to quit your business, be sure to check out Happy Hour BYOB’s latest episode here