Having a stable job as an employee is not a bad thing especially if you have a good salary. However, most people nowadays prefer to have their own business for various reasons. Whatever the reason, it is very crucial to understand first the risk you will be taking so you’ll know if you are really prepared to quit job and start a business.
Before quitting your job, make sure that your emergency fund is large enough. You may hear a lot of inspiring stories about people being really successful after quitting their job and starting their own business even with little to no funds. This may motivate you to make the big jump despite not having enough emergency money. But before you do, understand that every person has different situations. It may sound easy hearing from these stories but you never know what they really went through before gaining success.
Most businesses take months or even years before gaining steady income and can still be sporadic for years. You must have sufficient emergency funds in case your business does not go as planned. Anyway, if business becomes successful and won’t need it, you can still use the emergency money for other business opportunities.
Income VS Expenses
Another thing to consider is your expenses against the income of your business. Are you sure once you start the business, it can support your monthly expenses, pay the bills, and support your family?
Some people commit the mistake of quitting their job while the business is just starting. Even though the business generated income, the income is not enough to cover monthly expenses and support the family. As mentioned before, income from businesses can sometimes become sporadic. Before you quit your job, make sure your business’ income has gotten to the level that can support your family and lifestyle needs.
If you think you are ready to quit your job, then you must have a backup plan in case things do not go as planned. Business failure can happen to anyone even with the most successful businesses. You may enjoy 3-5 years of business success and then suddenly things go wrong. A lot can happen from economic crisis, family crisis and other uncontrollable events that can affect your business.
Another thing to consider before totally leaving your workplace is the people that will be impacted by your decision. This will help you determine if you are really ready for the move. If there are other people already depending on you, do not only think of the possible financial effect of your decision. Make sure that they are ready also for the changes so they can also prepare in case you experience difficulty with the business. Their support can also become a great motivation for you to work harder for your business.
Most importantly, you must have a future plan – which means you must already have a solid plan on how to grow your business. Just because you earned a sufficient income on a business idea you executed, you’ll just quit your job now and continue what you’re doing. You must plan ahead for the future of your business to ensure long-term success.