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You have an amazing business idea that you believe will be a hit. Your current job is too boring, demanding, and honestly, doesn’t pay you what you think you deserve.
You’re planning to exit and venture into the exciting world of entrepreneurship. As much as you’re excited, you’re also nervous. Are you making the right decision or the worst mistake of your life?
Before you take the plunge and hand in your resignation, press pause. Dropping a stable, reliable income to start your own business is a risky move that doesn’t always lead to success.
Bear in mind that 20 per cent of small businesses fail within their first year and 45 per cent during the first five years. Only 25 per cent of businesses make it to 15 years.
These sobering facts are not meant to scare and discourage you, but to push you to exercise more caution as an aspiring entrepreneur.
Don’t be fooled by seemingly overnight success stories – they’re either outliers or they don’t give you all the details. As Virgin Group founder Richard Branson says, “There are no quick wins in business” – it takes years to become an overnight success.
Venturing into business from impulse is likely to result in disaster. You need to have a carefully laid out plan to increase your chances of survival and success in business.
You also have to carefully weigh the advantages and disadvantages of business and employment to decide which one is best for you in the long run.
If you decide to pursue your business idea, there are a few things you must do before you hand in your resignation letter.
Do your homework
While you’re excited about your business idea, it might not be as viable as you think. To determine its viability, you have to research everything about the market- including competitors, suppliers, potential investors and target customers.
To ensure you have all the right information, write a comprehensive business plan. This document will guide you as you start your business. A business plan is also a handy document to convince investors of the viability of your business and your seriousness as an entrepreneur.
Do market research to get to know your target customers in detail. Who are they? What are their pain points? How can you help them solve their problems? How does your solution compare to others on the market?
This is also the time to clarify your motivations and desired outcomes. Why do you really want to go into business? And how would a successful business look like for you? What are the values you want to promote in your business? And do you have the skills you need to succeed in your chosen field? Think carefully about everything and take notes for clarity.
Build a nest-egg
If you’re living pay check to pay check it’s probably not a good idea to quit your job just yet. Not only do you need money for capital, you also need enough saved up to cover your personal expenses for months or even more than a year. At the very least, you should be able to comfortably cover your living expenses for six months.
Many new entrepreneurs make the mistake of assuming that their business will start turning profits immediately. The truth, according to statistics, is that it might take a year or two for your business to be truly profitable and seven to ten years to be considered really successful.
With all the expected and unexpected expenses that come with being a business owner, you should first build a sizable nest-egg before leaving your job. It might take time before you’re able to draw a sustainable salary from your business.
Test it as a side hustle
While you still have your salaried job, you can start working on your business. For example, you can devote your evenings or weekends to your side hustle. This strategy will allow you to test the viability of your business idea, without the risk of leaving your stable income.
With your business as a side hustle, you can learn more about your target audience and their needs, figure out potential roadblocks and solutions, create valuable connections, and earn extra income that you can reinvest into the business.
You’ll also test if you really have what it takes to succeed in business. Sadly, many people find out that they don’t have the skills and sheer determination and resilience it takes to go through tough business challenges. If you decide to stick with your job, that’s OK. You can focus on building your career to achieve your full potential.
On the other hand, if your side hustle is a success, you can make it your main hustle. If your side hustle makes you enough money to cover your expenses, that’s a good indication that it will be even more successful with your full-time attention.
When the time to quit, it’s important to do it the right way. Even if you’re not happy with your job, give your employer the courtesy of a resignation notice.
Let them know that you’re leaving to venture into business – you don’t have to give any more details than you’re comfortable sharing. Finish all of your deliverables and leave with grace. Past employers can become loyal clients, investors, mentors, and ambassadors.