The perfect way to remove a large portion of the risk involved in a business startup is to not go all-in at the beginning. If your startup allows for opening the business on a part time basis, that’s the perfect way to grow your business without risking your current career and your finances.
Most entrepreneurs hope to make their business in to a full time endeavor at some point in its growth but knowing when to quit your current job and focus all of your efforts on your startup isn’t easy. There are some factors to consider when weighing the decision.
If you’re single, don’t have a lot of debt, and maybe have caring parents that would allow you to live with them for a couple of years, you can likely afford to devote all of your time to your business much earlier than others.
In contrast, if you have a spouse and children that rely on your income, you’ll likely have to wait until you’re sure that the business is able to sustain you and your family not only now, but in the future if the economy became even more challenging.
The largest expense to new entrepreneurs is health insurance. If you lose the luxury of company sponsored health insurance, you might wipe out all of your profits just to provide insurance for you and your family. If you have a spouse that works full time, this expense is covered and allows you quit your job much sooner.
Your Current Job
If you’ve worked as a server, retail clerk, or other entry level job, going back to a job those types of jobs often isn’t difficult if things don’t work out. If you have a job a little higher on the career ladder, quitting the job may take you back down to the bottom both in pay and position. The more you have to lose by quitting your job, the longer you should wait before saying goodbye.
If you’re the high strung type, make sure your business is in no immediate danger of failure before leaving your current job. Don’t ruin your quality of life by entering in to a situation where you’ll constantly worry about how the bills will get paid. If you’re not the type to worry about the future, taking on more risk with a newer business is more appropriate for you.
Knowing when to quit your current job isn’t easy and it will likely come with a lot of anxiety early on if you decide to devote all of your attention to your startup. Understand that you’ll likely have to work twice as hard as you were before you quit your job—at least at the beginning.