Have you been debating with yourself (and maybe others) about whether or not you should quit your job and start a business? From the outside looking in, being an entrepreneur has a certain sex appeal. After all, you get to call the shots, and if you land on a winning idea you could end up joining the ranks of countless self-made millionaires and even billionaires who haven’t even reached their 30’s.
But, before you take the plunge, read through the four points below. These are the things that the most successful entrepreneurs know instinctively or have learned along the way. Yet, these ideas are often under-emphasized or even misrepresented within the entrepreneurial world, and it is encouraging many people to make mistakes that could have easily been avoided.
4 Points to Consider Before You Quit Your Job to Start a Business
1. Embrace mistakes… but don’t set yourself up for failure. Will you make mistakes along the way? Certainly! But, just because some high profile entrepreneur made 50 attempts at starting a successful business before striking gold, it doesn’t mean you have to go in to entrepreneurship setting yourself up for failure. The more sure you are that a business venture will be profitable, the better. There is actually a proven framework you can use to test the viability of a business idea. You can find it here. Of course, nothing in life is one hundred percent certain. The point is you can (and should) do what you can to get as close to that one hundred percent certainty as possible.
2. Procrastination is not the enemy. Ok, here is another big idea that is often looked at in the wrong way by aspiring entrepreneurs and small business experts alike. Most people view procrastination as an obstacle to break through and overcome. But often, lying at the root of our procrastination is some deep seated fear- whether it is a fear of failure or even a fear of success. And, that fear is giving you important information about yourself and the activities you are trying to avoid. You will have a much easier time in business and in life if you make the effort to figure out what your procrastination is telling you, and only then come up with strategies to take action in appropriate ways based on what you learned.
For example, you may learn that you are putting off starting a business because you fear who you think you have to become in order to do so successfully. If you can recognize that your projection is inaccurate, you can then start searching for successful people with similar personalities to yours and use them as a motivation for your own success.
3. Can you afford to fail? As I mentioned above, even if you try to minimize the risk, there is still the chance that your business idea won’t work out. What will happen then? What do you stand to lose? It is well known that the hunger for success can drive a person to accomplish the seemingly impossible. But when that hunger is connected to real, physical threats (for example, if you don’t earn enough money through your business venture, you won’t be able to put food on the table or even have a roof over your head to house that table) it can also lead a person to make stupid, irrational, and short-sighted decisions, and that is precisely what you want to avoid as much as possible.
4. The question of Capital. Yes, that’s Capital with a capital “C.” In order to start a business, you are going to need an injection of cash. Even if you are trying to start up an online-based business with extremely low overhead, and even if you try to DIY everything, at the very least, you are going to have to put in a tremendous amount of time and effort. This same time and effort, you could have used to earn money elsewhere. Most businesses, though, will need some kind of cash infusion along the way, and you need to figure out if you can realistically (and responsibly) get that money. That may mean bootstrapping your operations, taking on a business partner with access to capital, attracting outside investors, getting a loan from friends and family, using personal assets, such as savings, or even staying in your current job until the business gets off the ground.
Each funding option has its own set of pros and cons. Take a little time to figure out what makes the most sense for your situation and how much you can really afford to risk. Venture capital may sound sexy, but it comes with a whole lot of strings attached to it.
Bottom line: if you are on the fence about whether or not you should quit your job to start a business, don’t just blindly take action. The four points above will help you make the most suitable (and successful) choice for your business and yourself.
I think you missed a very important point
Do you have the necessary mindset.
With 30 years of dealing with business owners of every stripe, I’ve run across lots of people who should never have gone into business for themselves because they simply couldn’t make the adjustment to not having a regular paycheck.
Hi Dave,
That’s a very good point… and I agree with you. The reality is, though, that many people won’t know this about themselves until they are actually in the situation. Being able to run your own business takes a certain amount of grit and discipline, the ability to work hard, to experiment, to learn new things, and to be ok with making plenty of mistakes along the way…
Some people look like perfect entrepreneurial candidates going in, but ultimately fail simply because something didn’t gel with their mindset- whether it was not having that regular paycheck, as you mentioned, or something else, like not being able to handle setbacks. On the other hand, I know several people who never thought they would be running their own business and they may not possess all those “must have” entrepreneurial personality traits, but they figured out how to work around what they were lacking and ultimately were successful.
I would add making baby steps first to prepare a soft landing where possible. These days there are many cheap ways to quickly validate ideas and minimise risk of failure after quitting a job. Taking small steps also helps to prevent procrastination. One way of doing this is to provide some version of your services or product on a platform for freelancing, such as my site http://galilea3.com. This way you can see if there is any demand for the service or product you plan to provide.