Should I Quit My Job To Start My Own Business?

It's the first and most important question every would-be entrepreneur asks themselves: Should I quit my day job to start my own business? We turn to three experts to sort out if it's the right time to take the leap.

When you hate your job the idea of jumping ship to start your own business seems like a no-brainer.

But if you have a well-paying job you actually like the question becomes a little more tricky. For this week's question we turned to leadership coach Lolly Daskal, Leo Widrich, the cofounder of social media app Buffer, and resident entrepreneur at the United Nations Foundation (and Most Creative Person) Elizabeth Gore.

I am 28 years old and I have a solid career path. I have a management position with a great team, and I make a comfortable living. However, I recently started dabbling in a side venture to start my own business. It ended up not working out, but now I am wondering what I should do: Stay the course in my current career or jump off the ledge and commit fully to doing my own venture?

I think my problem is trying to juggle too many things at once, if I focused all my efforts on one, I think I could succeed.

Appreciate any and all thoughts on this matter.

Your truly,
Kevin


Kevin,

Without having much detail on what kind of venture, it is hard to help you think through the best solution in your particular situation. But in general, for a person who is trying to start a new venture and wondering if they should quit a current lucrative position, my short answer is no.

As a business consultant I always coach my folks never to leave one job or business before their new venture is successful and lucrative. Otherwise it can lead to a roller-coaster ride. I believe you can use your current day job as a springboard to your new venture if it is done right.

The best you can do is to create a plan that literally funds and creates your freedom. Here are some basic points to get you started:

Ask the right questions.

Ask yourself questions to make sure you’re thinking about the right key business decisions and are on point about what you are creating.

  • Why am I starting a business?
  • What kind of business do I want?
  • Who is my ideal customer?
  • What products or services will my business provide?
  • Am I prepared to spend the time and money needed to get my business started?
  • What differentiates my business idea and the products or services I will provide from others in the market?
  • Where will my business be located?
  • How many employees will I need?
  • What types of suppliers do I need?
  • How much money do I need to get started?
  • Will I need to get a loan?
  • How soon will it take before my products or services are available?
  • How long do I have until I start making a profit?
  • Who is my competition?
  • How will I price my product compared to my competition?
  • How will I set up the legal structure of my business?
  • What taxes do I need to pay?
  • What kind of insurance do I need?
  • How will I manage my business?
  • How will I advertise my business?

Write a business plan.

Every successful venture has a business plan, a written description of your business's future. That's all there is to it—a document that describes what you plan to do and how you plan to do it. You can find a wealth of good business plan templates and models online.

Become two people at once.
You mentioned that your current job is a good one. To stay where you are while also pursuing your own business you need to become two people: one who is currently successful, working at a great job with great people, and another who follows a very strict plan with deadlines and goals every day to make your new venture—your freedom plan—is a success.

Customize your time.
Time is one of your most precious resources. To gain serious momentum for your new venture, learn to customize your time with SMART goals:

  • Specific: Know exactly what you want to accomplish.
  • Measurable: Know how you will demonstrate and evaluate the extent to which the goal has been met.
  • Achievable: Make yourself stretch, but not beyond your abilities or time frame.
  • Relevant: Tie your goal to your key responsibilities and objectives.
  • Timely: Set target dates for goals and subgoals.

Work your ass off.
Starting your own venture is not easy. But working hard every day and taking action one bold step at a time will bring you steadily closer to making it happen.

Get help.
Hire someone who knows how to get you from where you are to where you want to be. Holding on to your steady corporate paycheck can help give you funds to hire a coach to help you with time management, business planning, and preparing you for the ups and downs of entrepreneurial success.

Build a safety net.
Until you are able to establish a solid stream of income from your side business, you don’t really want to quit. When you’ve got a few months of expenses stashed away in the bank, you can feel freer and not as fearful about moving forward. Even if things don’t work out, you know you can survive. With a safety net you can be bolder with your decision making and take more risks. It makes work much more satisfying when you know you are putting your freedom in the bank.

Deal in patience.
Everything worth having takes time, and patience, passion, and perseverance are important foundational elements for an entrepreneur. When you deal in patience, you can take steps every day to work on doing something to improve, build, and construct your new venture.

Set a date.
Lay out a plan to build up your side business into a full-time gig, and highlight the specific date you want to quit on your calendar. Give yourself an incentive to have your new venture up and running by the date you’ve picked.

Make quitting your current position happen sooner than later, not with a risky leap but by following a great plan with smart goals and bold implementation, with help and patience.

Let me know how it goes.


Hi Kevin,

When you are lying awake at night and you can't stop thinking, or sitting at your current day job, craving being your own boss, how do you channel that anxiety into strategic questions for how to move forward? Let’s break down these thoughts into the three Ps: Passion, Payments, and the Public.

Passion:
Do you have the passion and drive—the shear will—to launch your company? Being an entrepreneur takes a lot of grit. It is critical to ensure you have the energy to drive forward your own agendas. You will be a giant company of one on your first day—that will grow—but it is on you at first. Make sure your personal life can uphold what you are about to take on. Success starts with you as a leader.

Payments:
Do you have enough cash flow to pay the costs of your business, your bills, and to buy food? Whether you are bootstrapping, have investors lined up, or are lucky to have funds from your family—build a budget before you jump. What are the costs associated with building your company? Be sure to remember your personal costs as well. You are leaving behind a salary and have to pay yourself. Finances and cash flow can be the most stressful part of both your business and personal life—so think this through deeply.

Public
Is this the right moment to launch with your future customers? Timing is everything and is driven by the public ability to pick up a new technology, product, or behavior. You might have the greatest idea and enough funding—but what is the appetite of the world around you? This question is not as black and white as the first two. But it is important to understand consumer trends, competition, and the overall status of the economy and industry you are in.


Hi Kevin,

How do you go about quitting your job, quitting college, or anything else to go on doing that thing that you always wanted to do? The question is probably one of the hardest one to go about finding a suitable answer to that doesn't sound outright crazy. It's in fact such a hard one, that I often see people avoid the question, forever.

I quit college to start my own business. Here are a few things I've learned:

Using the Tarzan technique to quit your job

One of the absolute best descriptions of quitting your job with the least risk, is the "Tarzan technique," that Derek Sivers, one of my favorite writers, has so eloquently described before.

"Remember how Tarzan swings through the jungle? He doesn't let go of the previous vine until the next vine is supporting his weight.

So my advice is: Change careers like Tarzan. Don't let go of the old one until the new one is supporting you. And make sure you don't lose momentum."

We sometimes live with the illusion that "if I had just more time to focus on my side venture, it would definitely succeed!" The truth is, at least in my own experience, that having a limitation, both in terms of time and money, around your side hustle can actually be a good thing. It forces you to heavily prioritize and become extremely structured about your decisions.

When we look at things in detail, I found that there are often a few other factors at hand too.

Reducing other commitments first
When people consider "quitting their job, to work on their dream idea," the first thing that I always think about is, whether there is a chance to quit other things first, that might not be as vital as your job to support yourself or your family.

When we look at our lives, we often have a huge number of different commitments, that aren't tied to paying the bills. Starting with reducing some of these first, might be a better way to go, instead of axing your job. If you have five different hobbies that you want to all keep up with, it might be worth letting go of some of these, to make some time to work on your side project that could eventually turn into your company or new job.

Try making a list of all the things you're doing in a given week and think hard on each of these, whether you should keep doing them, or whether there's a chance to dial back on them a bit, at least for the time being.

Examples of making career changes like Tarzan

So, how can you make sure that you don't let go of the old vine, if the new one isn't quite supporting you yet? There are a few ideas, that I've come across that might be helpful:

Work early mornings instead of evenings
Joel, my cofounder and CEO at Buffer, discovered an amazing technique that helped him succeed and launch the first version of Buffer, whilst he still had a full-time job:

"Eventually, I had a big breakthrough which I attribute a lot of my early success to. I realized that I was often trying to work on Buffer in my evenings, after a whole day of work for other people. I wasn't fresh at all, I was often very tired and unproductive. So I reversed things—I started waking up much earlier (around 6 a.m.) and worked for 90 minutes before I started my freelance work, while I was completely fresh."

This is a change so simple, and yet so often overlooked. We sometimes think of just putting in the extra hours in the evening to work on our own success, and yet, when our willpower is depleted and we're tired, we're facing an uphill battle, that most of us ultimately don't win. Changing your routine to mornings can be a great help.

Take a sabbatical at your job, or even an extended vacation
If you still feel that you need to really go all in on your idea, things I've seen work with others before are a sabbatical for a few months. If that isn't an option with your current employer, taking an extended vacation, for as long as you can, could be a great start on where you're going with your idea.

Go chase your dreams, Tarzan-style, from one vine to the next!


If you have a dilemma you’d like our panel of experts to answer, send your questions to AskFC@fastcompany.com or tweet us a question using #AskFC.

[Image: Flickr user Araí Moleri Riva-Zucchelli]

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9 Comments

  • Most highly successful people when asked what they would do if they had to start over completely say home based businesses is the best way to start your path to success. Typically the brick and mortar and product side is already done for you, and you simply have to network and promote. This is a great way to quickly raise capital in a short 3-5 year period for you to then go and look into opening something that you may have an idea for right now, but not the funds to back it. www.smashthecycle.com is where I started. Hopefully some of you find it helpful!

  • Nikki Brown

    I think starting your own business is the way to go. I'm still working full time but hopefully I'll be able to transition to my business full time in the very near future. I used Lnbsolutions.com to get a jump start. They are pretty good with helping startups.

  • Re: doing a business plan: Exactly 0% of the Fortune 500 were started with a business plan. I'm pretty sure 0% of the Fortune 5000 are in the same boat - just haven't finished that study. Business plans are the purview of the paralyzed. ALL the research (ex: Frank La Pira, Entrepreneurial Intuition - Feb. 2011) shows that the people who are successful get the germ of an idea and GET MOVING.

    Re: staying in your day job. Research shows that people who split their focus are MUCH less likely to be successful (Covey - Span of Control study). Whenever we have a back door escape route, we are less likely to work hard enough to birth an idea. Survival is the strongest instinct. Leave the day job and go for it. What do you have to lose? You can always go back and be a captive employee. But if you don't give your dream everything you have, you'll regret it the rest of your life.

  • Oriel Lorraine

    I disagree with the last paragraph. A person does not have to give up their job to be successful in a new business venture. Not everyone can either as they may need that job for financial security. I think there are a lot of misconceptions about what a person has to do in business. I know two men who never quit their jobs and launched their own companies at the same time. One is named Steven Spielberg and the other is James Cameron.

    I am in the beginning stages of this as I have invented a technology that relates to my career. I do not plan to quit my job as 1. I can't afford to and 2. networking in this field will be pertinent to my future invention and company.

    It isn't for everyone and many need to weigh the pro's and cons of what will benefit them but I do think it can be done. Especially if it relates to a field you're currently in and if you need that job to financially support yourself.

  • Oriel Lorraine

    I disagree with the last paragraph. There are plenty of entrepreneurs who work and do their business on the side. Not everyone can just up and quit their jobs. I also know of two men in particular both film directors who started their own companies and never quit their jobs. Both their names are Spielberg and James Cameron. I think if you're passionate and make the necessary sacrifices, you can succeed. Not everyone can do it but I do not think quickly quitting your job without a financial safety net is the way to go.

  • I started up my own stationery company about 4 years ago and am still holding down a full-time serving job to pay the rent while I get my entrepreneurial legs. I thought the switch would happen faster, for me to quit serving, but it hasn't. And that's ok. It's true, good things take time and i'd rather be prepared and have a safety net, than pull the plug, potentially in haste or impatience. My suggestion to Kevin would be to find 1-3 mentors or friends or contacts that have done what he WANTS to do, quit his full-time job, and interview them, pick their brains, glean from their experience. They can speak from experience so when he does make the leap, he's more prepared because a few mentors gave me the heads up about things before he did. Best of luck! Dani.

  • a startup can't write an intelligent business plan in most cases. A startup needs to understanding its business model first. I highly recommend reading and using Steve Blank and Bob Dorf's Startup Owners Manual coupled with Alex Osterwalder's Business Model Generation book. Think about your startup and test it in Steve's Lean Startup Framework.

  • Follow your passion, anything less is the waste of a life!

    Be brutally honest with yourself, are you passionate about doing this thing or just trying to run away from something at work, or hyped up after watching Mark Zuckerberg or listening to Tony Robbins. Passion is a deep felt and earnest commitment to doing something, knowing you will make a major sacrifice and aware that you might not succeed.

    Learn to manage risk. All outcomes are unknown, what can be managed is the downside. If this isn't working out how will you know and when will you know. 1 yr, 2yrs? How will you protect myself from the downside (this is why some people advise not quitting until you are cash flow positive - depending on circumstances this may or may not be possible).

    Get 3rd party independent opinions about your ideas. Don't get an idea and then run to write a biz plan. Write the concept (problem being solved, solution, target market) and go speak to 10 customers. If you can't sell 5 it won't fly

  • wonderful points. Loved the article and would like to add my suggestions that I implemented. I tried to be entrepreneur during US recession of 2006/2007 . Me and my friend want to start a company that will bring Laid of people (at that time Nortel closed and we are there in Raleigh RTP looking sadly at the unfolding events) to a common platform to brainstorm and create new opportunities for themselves and others. We could not execute the plan well and failed. After sometime i relocated to India and I decided that I will help young engineers and MBA students to start their own companies. So i switched careers from Global IFS ERP software Implementations to teaching and blogging to students at http://skillsnest.wordpress.com. so my suggestion is that if you cannot become a entrepreneur yourselves try helping others who are ready for it by becoming sage adviser. You can realize your dreams thru your young students startups.