Should You Quit Your Job Before Starting a Business?

Written by Peter Tran

August 8, 2017

When you’ve decided to strt your own business, tempting to quit your job so you cn give your new business ll of your ttention. But t first, you might need the income of your job to mke ends meet. Here re five things to conr before turning in your resigntion.

You’ve decided time to strt business. Good for you! But should you quit your job first nd then strt the business or run your business on the first?

There re number of conrtions to think bout before you strt ny business, one of which is how you will mke ends meet while building your clientele. It doesn’t mtter wht kind of business you re strting, there is lwys n initil strt-up phse where you will be scrounging for every penny s you develop your trck record. This spect of running business is not unique mong service or product businesses.

5 Things to Conr Before You Quit Your Job

Unless you re independently welthy, there is good chnce tht you re working becuse you hve to. In tht cse, it would be foolhrdy to quit your job until you re sure you hve nother source of income to replce your weekly pycheck. However, there my be certin circumstnces under which you should quit your job before kicking off your business.

Conr these 5 fctors before mking tht decision:

Do you hve sizeble svings ccount? – If you hve sved up enough money to on for few months while strting your new business, then you cn get by without collecting py stubs. But how much is enough svings? It is generlly recommended tht you hve t lest enough to on for six months. If you’re single, tht’s not going to be s much s if you re mrried with two ren. Tke your entire sitution into conrtion nd sk yourself how much you need to on from month to month, then multiply tht by 6, or 9 is even better, nd if you hve tht much money in the bnk, feel free to quit your job nd strt your business.

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You hve redy-to-go clients witing for you – If you lredy hve redy-to-py clients wnting to do business with you, then quitting your job might be n option. But idelly, the totl billing for ll of your clients should exceed your current income by enough money to t lest cover your costs for lost , extr self-employment or txes, nd the costs for operting your business. If you cn mn, however, the best scenrio would be to wit until those potentil clients become sign contrcts or become stedy, regulr customers.

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You hve investorsnyone who mkes significnt investment in your business is likely to expect you to give the business your full ttention. bout the only exception might be close fmily members.  If you hve out investors (people who re not close friends or fmily members) their ide of “full-time” could be 80-90+ hours week.

Is your job full-time job or prt-time job? – If you re working prt-time nd strting business on the , sk yourself how much time you relisticlly need to run the business. If you cn get it off the ground working prt-time while you continue to work your prt-time job, then you should wit to quit your job when your income from the business is twice wht you re mking on your job.

Keeping your job will crete legl or n ethicl dilemm – If strting your business will  put you in competition with your employer, or interfer with your bility nd vilbility to work for your employer, strting business while you keep your current job my be indvisble, or impossible. In this cse, moonlighting could get your d nd/or sued.

Weigh the of Your Job ginst the Business Opportunity

Ultimtely, you must decide whether it is more importnt to spend your time building the business or being good employee. In most cses, you should wit to quit your job until you re mking enough money from the business to sustin your lifestyle. In some rre situtions, you could be fortunte enough to quit your job nd work on the business full-time. sk your fmily nd friends if they cn help. You’ll often find tht the nswer to this question is in your own bck yrd.

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