Today is the day! You have tossed and turned, prayed and fasted, watched enough YouTube videos for motivation and now you are ready! Ready to take the leap of faith and go into full-time entrepreneurship. You are at the point where working this job no longer aligns with what you want out of life and it is time to be your own boss!
OR… this was not your choice at all. The company is closing down and gave you two weeks notice. Your job performance review was horrible and you’ve found yourself on the chopping block (please do take any office stationary on your last day, yes that means leave the stapler and the pack of pens).
Whatever the deciding factor for this decision, the time is here. The time for you to leave the nest of employment and venture into the uncharted world of entrepreneurship (congrats are in order – I hope). Before you clock out for the last time, step away from your cubicle/work desk, say your goodbyes to the coworkers you actually like and leave, let’s take a look at some of the steps you should consider before you make that shift.
1. Evaluate Yourself: Let’s start with the man/woman in the mirror (cue Michael Jackson song). Why do you want to start a business or feel that now is the best time to leave? Are you making this decision based on your current job situation or an emotional state? Did you hear about the ‘Laptop lifestyle”? If you watch enough YouTube you know what is the laptop lifestyle. Are you sure that entrepreneurship is for you? I know it’s trendy at the moment, but not everyone is made to be an entrepreneur and that’s ok. If you want extra money, maybe you should start a side hustle as opposed to just quitting straight out. The answer to your problem might be to introduce another income stream. If you want more freedom, maybe it’s time to leave your 9-to-5 job and start something new and flexible. This is a big decision and should not be made lightly. Take some time out and ask yourself the tough question. Give yourself honest answers and make sure there isn’t anything temporary or fickle influencing your decision.
2. Talk to Loved Ones: This step might be the most difficult because you can never predict how it will go. The people closest to you are the ones that will most likely feel the ricochet of choice. It’s my life! Yea I know but your loved ones are going to be the people you look to for support, assistance, your congratulations and to spend the life you have created with. If you don’t have any loved ones (sorry to hear that) then this might not be something to consider. However, for people with spouses, there is no way around it. Full-time entrepreneurship can be a big lifestyle change and having your partner on board and understanding what is to come can make or break how you function in your business. If you still live at home with family, it might be a conversation with mom or dad that this can change your financial position so your contribution to the household income will change. YOU MIGHT HAVE TO TELL YOUR FOUR OTHER FRIENDS YOU HAVE TO CANCEL THE NETFLIX SUBSCRIPTION! Sorry for shouting, I’m getting emotional. After you have convinced yourself that now is truly the time, bring your loved ones on board with your decision and let them buckle up for the ride.
3. Review Your Savings and Debt: Ok! OK! If you thought telling your skeptical mom and doubting spouse was the hard part – it gets worst. Now it’s time to look at the money. Can you afford to be a full-time entrepreneur? Do you have enough savings to not only run your business but still fulfil your current financial obligations? Rent; car payment; child support; Apple Music; hair and makeup; etc. Reviewing your savings and debt allows you to see if the lifestyle you live is sustainable while you build this successful business. This step is crucial because failure to do so can cause a negative series of unfortunate events including messing up your credit score and worst-case homelessness. We have all heard a story or two about someone living in their car or crashing on a friends couch until they got back on their feet. This step is to prevent the slip. Review your savings. Do you have enough cash in your emergency fund if something comes up? Can you afford the medical insurance now that you are your own boss? Do you have to refinance your consumer loans and student debt to make the payment more comfortable? All of this has to be reviewed and answered before you make your decision. Now might not really be the best time.
4. Establish Goals and Research Business: You are still going through with it? Great! What did you say you were leaving your job to do again? Eyelashes? (No shade to my eyelashes technicians). Have you researched your business idea to assess all the risks? If you haven’t decided on the business idea, I think we should start over at step 1. If you have, do you have the skills to operate this business or will you have to get some type of formal education or training? Is this your passion or area of expertise? Are you even ready to be an entrepreneur? Do you have the supplies, programs and systems to run this business? These are a lot of tough questions. Very uncomfortable, but this is where we determine if we want to be a success story or an “I should have…” tale. For those who have an established side hustle or business and just making the transition, it’s not going to be that simple. How much capital do you need? Now that you are no longer full-time, you are losing the income from your previous employer. Do you have enough capital to advance your business to a level where it makes up for that loss? Does your business have enough cash flow to run itself since you can no longer use your bonus and overtime pay to purchase inventory? You want to make sure what you are jumping into is secure enough not only to make the landing comfortable but can continue going and growing.
You’re at the end. You checked the steps and answered all the questions (there were a lot!) After further review, you are still ready to jump OR you realized that now is not the best time to leave, but with a couple more months and dollars, you will be.
Regardless of what is being forced on us by society, full-time entrepreneurship is not just a casual decision. It requires more thought and planning than just one sucky day at work.
And noooo this isn’t to discourage you. We know you can’t keep a good man down (word to Sizzla) but entrepreneurship is synonymous with risk. While roughly 80% of businesses survive the first year of operations, this number is cut in half and reduced to 45.4%- 51% depending on the year the business started¹. These steps are here to help you prepare for the risk ahead. No one can ever be 100% ready for the uncertainty but with these 4 steps, you get a good head start.
¹ Otar, Chad. “What Percentage Of Small Businesses Fail — And How Can You Avoid Being One Of Them?” Forbes Finance Council, 25 Oct. 2018, https://www.forbes.com/sites/forbesfinancecouncil/2018/10/25/what-percentage-of-small-businesses-fail-and-how-can-you-avoid-being-one-of-them/?sh=2c0bb70a43b5.