While dreaming about handing in your resignation may be a piece-of-cake, actually figuring out how to quit your day job — and not go bankrupt doing it — is a bit more complicated.
1. Ask yourself the important questions
First among them: is this something you would enjoy? It may seem like a silly question, but turning a passion or a hobby into a business and exiting the traditional workforce isn’t for everyone. Some people find that the stresses of trying to make a business work are enough to take the joy out of their passions. Other people discover that they really don’t enjoy the extra responsibilities that come with running their own business. The important thing here is to know yourself … and know exactly what sort of work your new business will entail.
Another equally important point to consider is your motivation. Why do you want to quit your job? Are you capable of starting a business of your own? Not all reasons are good ones, though a good reason for you may be a bad one for someone else. Write down a list of your motivations, and give them some serious thought. Then, if you decide to go forward, keep that list to refer back to when the going gets tough.
Some other questions to consider:
- Do you have the work ethic and time management skills necessary to work for yourself?
- Do you have a network of people who can help and support you?
- It takes at least a few years to build a new business from scratch — and may take even longer. Are you prepared to have less money for awhile while you work on building your new business?
- Do you have the skills needed to pull off building your business idea from the ground up — and if you don’t, can you get those skills?
- Are you comfortable with the possibility of failure … and, more importantly, if you do fail, will it cripple you so badly that you won’t be able to get up again?
- How much time and money can you invest before it directly impacts your ability to take care of yourself and those around you that depend on you?
2. Test the Waters
Quitting your job the moment a business idea enters your head and going all-in may sound glamorous, but it isn’t exactly practical. In fact, it’s foolish. You still have bills to pay, after all, and those bills aren’t going to wait around for you to build a successful, thriving business before coming due. Impulse decisions are not the last thing you want to do when inspiration shines upon you.
The best thing to do — if you are able — is to start up your business while still working your 9-5. This undoubtedly will mean more work, but having a steady income while you work through the infancy of your business will give you the valuable time and resources you need to test drive your idea.
During this phase, you will want to focus on creating a solid product or service. Once you have confirmed that this product/service is something people will actually pay for, spend your time building up your network, as well as a reliable client/customer base.
At this point in the game, all of your profits should be going directly back into the business. Marketing takes more than time and effort — it also takes money. Funds will be low in the beginning, so make sure you prioritize. Now is not the time for upgraded equipment, or a fancy letterhead.
3. Build your safety net
Waiting to quit your day job will also give you the chance to build a safety net. This safety net will help you pay the bills while your side hustle gains traction. And because many start-ups fail because they run out of funds, it will also help you stay in the game longer, should things get rough.
The amount you need to save really depends on your situation. Are you going to wait to quit your job until your side hustle is making equal to what you currently make, or do you want to get out sooner? The sooner you choose to quit, the more you should have in savings.
This also doesn’t mean that you save indefinitely for fear of not having enough in reserves. Analysis paralysis I not your friend. Make a strategic plan behind how much you need in order to cover your most basic requirements. After all, you’re not saving for retirement in this instance. You are, however, investing in yourself to take on a calculated risk that you believe in. Don’t lose site of your WHY.
4. Know the right time to quit
So you’ve built yourself a safety net and your side hustle is doing well. How do you know when it is time to quit your job?
Before you take the plunge, you will want to make sure you have a solid foundation of clients or customers (family and friends only count up to a certain point). Depending on how much you have saved up, you will also want to make sure your side hustle is bringing in some sort of cash flow.
Keep in mind that it’s not uncommon for most new ventures to take anywhere from 2 – 3 years before they start making any type of meaningful return. It’s imperative that you understand what you’re getting into before making the leap, and be mentally prepared for the grind that will be required in order to be successful.So you’ve built yourself a safety net and your side hustle is doing well. How do you know when it is time to quit your job? Click To Tweet
5. Set a deadline
After you have done the calculations and thought things through, come up with a reasonable time frame. How long will it take you to build up a safety net? How long do you want to test drive your idea before committing to it full-time? With these questions in mind, set a deadline for yourself. If the date arrives and you haven’t met your goals, it may be time to reevaluate. If you have met those goals, it is time to move on to the next step — handing in your resignation letter and taking a deep breath of freedom.
Handing in your resignation can be intimidating, but knowing that you have done all you can to make sure your business will be successful can make the process a little less frightening. The more preparation you put in, the higher your chances of success. Eventually, however, it will be time to close your eyes, and pull the proverbial trigger. Once you have quit your job, the real work begins. It won’t be easy, of course. But then again, nothing worthwhile ever was. If that scares you, good. It should! That just means you’ll put in the necessary work to avoid ever needing to go back.