Before you sack your boss, go through this checklist to make sure it’s the right time to quit.
There comes a time in most people’s work life when it feels like the only way out is to quit your job and move into your own business today.
It may come as a feeling that progresses over time, or it may be that you’ve been running your own side business and now want to move into it full time.
Whatever the case, make sure you’re quitting at the right time and not making a reckless decision that could have negative immediate and long term results.
So how do you know when it’s the right time to quit your job?
Below is a checklist to measure yourself against.
1. You have a business plan
You will find it hard to grow your business without a business plan. The process of preparing your business plan is an eye opener. When you do it right, you will find out the important things you need to know about the business before startup.
Many people jump into business first and then work their way through a few years before preparing a business plan. A lot more are scared of working on a plan and think that it requires technical expertise.
Your business plan need not be a huge document. It can be a simple 1-page plan like Patsula Media’s One-Day Business Plan or you can follow Cheyne Little’s guidelines and write one in under an hour; or if you’re lucky and know an accountant who works with small businesses, you could ask them for help in creating a comprehensive plan.
Keep in mind that your business plan is a living document and you will edit it as your business grows and you get more information about your business and the industry you’re in.
2. You’ve prepared an exit or transition plan and have been working through it
One of the biggest mistakes I made when I quit my job and jumped into business was not creating an exit plan. I ended up wasting a lot of money because I was still thinking like an employee and spending money as if I was going to receive a salary at the end of the month. I also expected people to be so wowed by my business idea that money would literally walk in without me lifting a finger.
Your exit plan, which is ideally created 6-12 months before you quit, will help you start evaluating which of your habits you need to change. Skills like time management, financial planning and management, leadership and marketing are very critical when it comes to business.
If you start a business with an employee mentality then the business is doomed from the start. If you start thinking like a business person while you’re still employed, you will start changing your habits. For one you will respect your time and money more and start learning core skills like financial management, marketing and negotiating while still at work.
The transition period will also give you time to learn about the business itself, conduct your market research, create the business plan, test out your products or services in the market, and reduce your personal spending.
3. Finances have been taken care of
Most business experts recommend that you should have enough money to cover your personal and business expenses for at least 6 months. In reality, business is such a volatile environment and you never know how things will go for you.
My recommendation is that you should have saved enough to cover your personal expenses for 1 year and business expenses for 6 months. You should also pay off as much of your debt as you can before you quit. When your personal expenses and debts are taken care of, you’ll not give a desperate vibe when marketing as this puts off prospects.
On the other hand, there are people who get motivated when they see money running out. If you’re such a person, then 6 months savings for both personal and business expenses will work.
4. You’ve tested out your product or service and made sales
Business is all about making money. When you have the comfort of a salary at the end of each month, it’s easy to romanticize business in your mind and make it seem like a saviour. A lot of people get a rude shock when they make the jump into entrepreneurship and realize that their business idea is not going to make money.
Conduct market research on your idea; study your competitors; make prototypes of your products and sell them; test out your service to paying customers…go out there and make sales while still keeping your day job.
The best advice I’ve gotten came from Walter Akolo of Freelancer Kenya when he recommends that you should not quit your job before your business is paying you 75% to 80% of what you’re currently earning. Almost similar advice is given in Michael Masterson’s book The Reluctant Entrepreneur: Turning Dreams Into Profits.
5. Your desire to quit your job outweighs your need to continue earning a comfortable living in your job
The lure of entrepreneurship is like a drug. Once the idea slips into your mind, it can fester and grow until it’s all you think about. When you find your day taken over by business thoughts; you spend a lot of time searching the internet for information on how to start a business; or you’re just marking time at the office so that you get a salary at the end of the month while in reality you spend most of the day working secretly in your business, then it’s time to take stock and create your exit plan.
Inc.com has an interesting list of 10 signs that indicate when you’re ready to quit your job. Click the link to check out this list and evaluate yourself. As the writer notes, these are not signs that you’re ready to be a business person, but they do indicate that your days of being an employee are numbered.
6. Your part-time business has been demanding more of you than you can currently afford to give it
This is a great problem to have. Your customer base has increased and you’re getting more work than you can handle. Maybe you’ve tried to outsource some of the work or even hired staff to help you out. Unfortunately, startups are like babies and they are very fragile. They need care and constant attention.
As your business grows, you will need to be there fully in order to guide and grow the business into the vision you you have. This cannot happen when your attention and time are divided between work and the business. If this is the case for you, then don’t waste time. The longer you take before transitioning fully into the business the more likely it is that you will lose traction and kill the business.
7. You really, really, hate your job
I’ve met people who get physically ill when they think of going to work. In fact, one of my former clients used to pass by hospital on Monday morning because she would get very bad migraines. It took her time to realize that her job and working environment were toxic for her. Does this sound like you? If yes, then either find a new job or finally make the jump. If you’re not sure which one is the best option, work with a career coach for a few months and let the coach guide you through the decision-making process.
It doesn’t matter the reason you have for quiting your job and moving fully into business. When all is said and done, only you can make the decision for yourself. There’s no level of mental and physical preparation that will make your decision to quit 100% failure-proof.
If you’ve gone through this checklist and you feel the need to go into business, but still aren’t sure whether it’s the right time for you to quit or not, why not take an year-long leave of absence or unpaid leave? This way, you can work on your business and still have your job waiting should you decide to come back. Chances are that if you do things right, you will not need to go back into employment again after this period.
Now back to you… Are you ready to leave your job? What preparations have helped you make the decision? Please share with us in the Comments section below.
(Image credit: nongpimmy at www.freedigitalphotos.net)
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