I’ve acted as a mentor to a handful of people making the switch to business ownership and the top question for all of them was: “Should I quit my job and then start my business or can I start it while I’m still working?”
Some people quit their job as a way to motivate themselves to start their business, while others just can’t feel comfortable enough to quit because they have families that depend on them and they are never truly ready.
To anyone who is thinking of starting a business, I say: Have a deadline in about a year when you will quit your job so you are motivated, but take some necessary steps before leaving.
Here are four things you can do to make sure you’re ready to leave your job when your deadline arrives:
1. Know what type of business you want to run.
You should know if you want to run a lifestyle company or a build up company. Something I’ve written about before, knowing what kind of business you want to start will help you with business ideas.
A lifestyle company is one that you create because you want to be in a particular industry. They are driven by passion for a certain hobby or interest and you just want your work to be in the niche that you are interested in.
Build up companies are ones you start not necessarily because you want to be in a certain industry, but because you have seen an opportunity — usually filling a gap in service in a given industry — that you believe will lead to a successful company that you can scale up and potentially sell.
This can take weeks or months to figure out for yourself and you might as well be earning money while you do it.
2. Come up with your business idea.
You should not only have a business idea, you should have the business idea that you’re going to try before you quit your job. That means coming up with a list of ideas, going through each of them to judge them on their merits and then comparing them with each other to see which one rises to the top (even if you are obsessed with one idea come up with a few others for comparison’s sake).
Once you’ve picked your idea, get feedback on it, do some research, test its validity and ascertain whether you are going to be able to really do it long-term.
Deciding what type of business you want to run and coming up with ideas are things you can do that don’t take up 100 percent of your time, so it’s best to do these while you’re still earning money from your job.
3. Get some funding.
As wonderful as it would be if a business could run on gumption and hope, you will need money and potentially a lot of it. This is the number one reason by far that people stick with their jobs while they are getting a business off the ground. You don’t need every single cent in place before you get started, but you should procure as much of it as you can.
Start saving money according to your timeline so you can have enough in place to confidently leave when it’s time. Arrange your money when you are not desperate to be earning it.
4. Have a plan.
Before you can have a business, you need a plan to follow so you have a map you can reference if you ever get lost during the journey. Whether you actually have a formal business plan is up to you, but you should at least have something written down that will give you direction. Know how you’re going to start, how you’re going to run it and how you are going to make money with it before you actually launch it.
Keep in mind that if you feel like you’re ready to jump into your business ahead of your set timeline, that is also fine. I knew someone who was planning to work on his business for two years before leaving his job and he ended up jumping ship in two months instead.
Once you are ready to leave your job, you should feel scared, but not desperate and lost. That is how you end up making the wrong decisions.