Forget about the personal accounts of others who have made the leap from employed to entrepreneur. What’s your story? How do you decide when to leave your full-time job to work for yourself? And who says it’s the right decision in the first place?
For some people, the transition from being employed to running a business on their own can happen quite naturally. Others, however, may find themselves caught between a confusing battle of pros and cons, hopes and misgivings.
I’ve come across several online attempts to address the question of when it is ok to leave one’s full-time position in order to pursue the entrepreneurial route. Most writers settle for the personal accounts of those who “made it,” or they offer several arbitrary key indicators that supposedly will signal when the time has come to take the entrepreneurial plunge.
But the truth is there is no one-size-fits all answer to when you should quit your job to start your own business, and as I mentioned above, starting your own business may actually not be the best option for you. (News flash: Not everyone is meant to be an entrepreneur.) So what should you do if you are having a hard time deciding?
My answer: There are several questions you can consider to help you come to the conclusion that makes the most sense for you. Here are 8 of them with some vital points to keep in mind:
1. Identify the reasons for wanting to start your own business. Answering this question is first and foremost because it will help you to focus on what is really important to you. It may also help you to identify what the primary driver is for wanting to start your own company. Are you looking for more money? More flexibility and freedom? Is your current job boring or bothering you in some way? If things would change at your current job, would it make a difference? Are you looking for a new career?
2. What are your financial responsibilities? It goes without saying that a single, young person has much more flexibility (and can typically shoulder more risk) than an older individual who is married with children. Before you consider running your own business full time, you should to take stock of your financial needs.
3. What amount of capital do you need for your business and how do you plan on getting it? Most new businesses require some kind of initial seed or startup money. Keep in mind also that a completely new business may not pay out at the beginning until a reputation and loyal customer-base has been built up. Are you using personal assets to fund your venture? Can you afford to lose these assets should your business fail? Will you be taking out liability insurance or property insurance in the case of a sole proprietorship or partnership?
4. What is your experience and background in this industry? Are you trying to open a business in an industry that you are familiar with? Obviously, the more experienced you are working in this type of business, the less the risk involved.
5. Are you trained to run a business? Do you have any training in business management, finance, or marketing? Do you have access to someone who can guide you in these areas?
6. Will you be running the business alone or in a partnership? Running a business as a partnership typically reduces the level of risk involved- especially if the partners are strategically aligning themselves. A partner can help to fill in an information, experience, or finance gap.
7. Are you starting a new business from scratch or have you been working on your business on the side? The answer to this question may make a big difference in your decision. If you have already been operating for some time, then there are fewer”unknowns.” You may have an idea about the time commitment involved, as well as the demand for your product or services and the amount of competition you will face. You will also get to see if you enjoy doing this line of work.
8. What is your gut telling you? Above all… go with your gut. Sometimes the right decision is the most illogical one. If everything inside of you is screaming for change, then you better listen to it. Forcing yourself into a situation that “feels off” will almost always backfire in the end.
In short, there are several factors you should keep in mind when trying to decide whether to quit your full-time job in order to run your own business. If you ask the right questions and you are honest with yourself when it comes to the answers, then you’ll know whether to take that plunge, or walk away from the the side of the pool.