Feeling stuck in the nine-to-five grind? Perhaps you're thinking that you should quit your day job to start a business? The world is at your fingertips in this digital era. However, business ownership isn't all sunshine and rainbows — be prepared to work around the clock, deal with the unknown and make tough decisions that could change your life forever.
TL;DR (Too Long; Didn't Read)
Most times, running a small business is a lot more challenging than being an employee. Consider starting a side gig to gain experience and test the waters and turn it into a full-time job when the time comes.
Why People Quit Their Jobs
Back in the 1800s, Mark Twain said, "Find a job you enjoy doing, and you will never have to work a day in your life." This old saying still holds true today. If you're not passionate about what you do, you won't be able to reach your full potential. In the long run, you may end up feeling depressed, disengaged and unmotivated.
People quit their jobs for different reasons. Some do it because they are not satisfied with their managers or their work environment. Some have considered quitting because of a lack of communication with their superiors or colleagues. Others feel they work in an environment in which they cannot excel and grow professionally.
In a recent survey, 25% of respondents said they started a business because they were dissatisfied with the corporate world. Approximately 39% wanted to pursue their passion. More than half stated they were feeling ready to do something on their own, and others did it because the opportunity presented itself or after being laid off. No matter your reasons, it's never too late to escape the nine-to-five grind and start your own business — just make sure you're aware of the challenges that lie ahead.
Consider a Gradual Transition
Entrepreneurship is hard. More than 500,000 new businesses are started each month, but only half of them survive longer than five years. Over 40% fail because consumers don't want or need what they have to offer. Approximately one-third run out of money, 19% get outcompeted and 23% fail to build a winning team, reports CB Insights.
It could take you months to make your first dollars. In fact, you may spend more than you earn in the first year of business. If things don't work out, you may end up buried in debt from both business expenses and living expenses. Considering these risks, it makes sense to have a backup plan before you quit your job to start a business.
Running a startup is a full-time job. Therefore, you won't be able to put in enough time and effort if you're working from nine to five. Consider getting a part-time job — or reducing your current job to part-time — so you can focus on your venture and still earn an income.
Start a Side Hustle
A good business idea doesn't guarantee success. Start small and test the waters before leaving your job to launch a business. For example, you could turn your passion into a side hustle. As your customer base grows, turn your side hustle into a full-time gig.
Let's say you have experience in digital marketing. Start by offering your freelancing services on freelance websites like Upwork or People Per Hour. Also, look for Facebook groups and other online communities where members share job opportunities. Another option is to contact marketing agencies and potential clients — introduce yourself, share your work portfolio and express your interest in working with them.
Focus on making a name for yourself. Set up a website or blog, share industry-related content and showcase your work. Consider offer marketing consulting services remotely or create and sell an online course that reflects your experience and skills. If things go well, you may quit your job later on and turn your side gig into a full-time business.
Employees vs. Entrepreneurs
Before taking this step, make sure you understand your new role. Being an entrepreneur is completely different than being an employee — and not just because you'll be able to set your own schedule. In fact, you might need to fine tune your time-management skills because your schedule will be packed with ongoing projects, customer emails, research, meetings and more. You will be your own boss.
First of all, make a plan for financial stability. According to a study by Hiscox, most entrepreneurs think they must earn at least $43,862 per year from their side gig before quitting their job. When you're on your own, you don't get a paycheck every month. This means it's your responsibility to put money aside from the income your startup creates.
Furthermore, you won't get sick pay and other benefits that come with a full-time job, such as health insurance and a retirement plan. If you hire people, you also become responsible for paying salaries. Starting a business with or without employees has legal implications as well. You need to choose a legal structure for your startup, obtain a tax ID number, apply for business licenses and permits, pay taxes and ensure a safe environment for your staff.
Start Small, Think Big
What do Apple, Google, Microsoft, Disney and Amazon have in common? All of these global brands started in a garage. Today, they have millions of customers and hundreds of offices worldwide. Every new business has to begin somewhere, so don't be afraid to start small.
First of all, treat it like a business, even if you have just a few customers. Charge what you're worth, work hard and set long-term goals. Make a business plan and think about the steps needed to help your startup or side gig scale. Research the industry, check your competition and learn about your target audience.
Second, make sure you have realistic expectations. The entrepreneurs surveyed by Hiscox said it took them about three years to earn the same annual income as their last job. Approximately 65% of respondents paid themselves less than $50,000 in their first year of business, and 42% paid themselves less than $25,000. Create a budget, cut out unnecessary expenses and invest in the tools and people you need to reach your business goals.
Should Your Quit Your Job to Start a Business?
Starting a business isn't easier than being an employee. This career path comes with its challenges. There will be days when you won't have any work to do and days when you won't have time to catch your breath. Expect to work until late at night and cancel your vacation plans at the last minute, deal with difficult customers and handle conflicts in the workplace.
You may never feel ready to take your side hustle full-time, and that's perfectly normal. If something goes wrong, you risk losing everything, but sometimes, it's worth taking the risk. When you have your own business, your income potential is unlimited.
Successful companies like Google and Apple have changed the world. If you're good at what you do and know how to market your work, you too can make a difference. Be realistic about your skills and experience, see if there's a strong demand for your products or services and make a plan for financial stability. Remember that startups are inherently volatile, so don't feel pressured to quit your job as your venture starts to gain traction.
- Peakon: The Employee Voice
- Dynamic Signal: Dynamic Signal’s Annual State of Employee Communication and Engagement Study - the 2019 Findings Are In!
- Guidant Financial: 2020 Small Business Trends
- Investopedia: How Many Startups Fail and Why?
- CBInsights: The Top 20 Reasons Startups Fail
- Hiscox: 2019 Hiscox Side Hustle to Small Business™ Study
- American Express: 6 Incredible Companies That Started in a Garage
- Entrepreneur: The 8 Biggest Challenges for New Entrepreneurs
- U.S. Small Business Administration: Business Guide