When I am interviewing aspiring entrepreneurs for our programs, I always ask about their short-term personal goals. In almost every interview, they respond “I want to quit my job and work on this business full-time before the end of the year.” Shortly after starting our program, I hear the groans of how “I so want to quit my job.”
I get it. I know working for someone else can be soul-sucking, and starting your own business is way more exciting and fun. Not to mention, it’s a constant challenge to balance the commitments of starting a business, keeping a job and maintaining a family. Just one of those commitments is enough to take up a person’s full time and attention!
In order to build a sustainable business, it’s important that you are personally sustainable in the process. Unless you have enough money saved up to get through your first few of years of business (statistically, the years in which businesses are most likely to fail), I don’t recommend you quit your day job yet. Instead, here are some tips to start your business on the side and make a sustainable transition.
Make Sure You Are in Compliance with Your Current Employer
Before you begin working on your business on the side, be sure to review your current employer’s handbook and the contracts you signed when you were hired by them. You want to make sure they can’t claim ownership of your business idea later on down the road. Additionally, you want to ensure your business doesn’t cause a conflict of interest that could lead to termination of your employment before you are ready. Finally, don’t let your business interfere with your commitments to your current employer—work on your business on your own time and use your own resources.
Prepare Your Family
Building on your business on the side often means you will be working on the business in the evenings and on weekends. This may limit the time you have for your family and friends. Think carefully about the time commitment and the potential impact on your personal relationships. Have conversations with them about the time commitment and make sure they are supportive of your entrepreneurial endeavors. Having a deep level of support from family and friends makes the process of starting a business less daunting.
Get Your Finances in Order
Take a look at your personal bank and credit card statements over the last year. Use your statements to create a monthly budget. Notice where you are spending your money and if there are any areas where you might be able to lower your expenses. If you have any outstanding debt, start a monthly payment plan for yourself, paying off the highest interest rate debt first. Develop a realistic savings plan, putting away a little bit of money each month so that you can cover some of the new expenses that will come as you start your business.
Test Your Idea
I don’t believe that you should start your business by writing a business plan. You can waste a lot of time and energy writing a plan for a product or service idea that doesn’t have a market. In our programs, we take entrepreneurs through the lean startup methodology. Get out of the building and deeply connect with your potential customers to understand their needs and purchasing behavior. Use that data to develop and test a prototype for your product or service. This way you can find out if you are onto an idea that people really need and if you are still interested in moving your idea forward.
Write a Business Plan
Once you know there is some demand for your idea and you are interested in developing it further, it’s time to write a business plan. Your business plan is your roadmap for where you will take your business. You want to describe in detail your assumptions for your products and services, your potential customers, how you will reach those customers, how you will generate sales from those customers, and the operational infrastructure you need to keep the business running. Calculate how much income your business will generate and how much you will need to spend to run your business over this period. Be sure to factor in the cost of your salary and benefits as you plan to transition out of your current job into the business full-time.
Have an Exit Plan
It’s impossible for you to juggle both your current job and your business forever. Come up with an exit plan for both. Based on your business plan, when might you be able to reduce your hours or leave your job altogether? How long are you willing to work on your business without getting the results you need to step away from your job?
It takes a great deal of time to develop a successful business. When you can’t work on your business idea full-time, it will take longer to get off the ground. Be patient with yourself and your business development. Remember that not everything has to move so quickly and you don’t have to do everything right now.
Think of quitting your day job as a milestone in your entrepreneurial journey, not the end game. Starting a business isn’t an easy path, and quitting your day job too early in the process and losing that income can make it more difficult. Having a realistic set of short-term and long-term goals helps on the path to creating a sustainable business.