CRITICAL STEPS YOU MUST TAKE BEFORE QUITTING A PAID JOB TO BECOME SELF-EMPLOYED
One of the most important decisions you will make in your life is going into business yourself. It is a life-altering event that will have repercussions for years to come if your plans are not well thought out and implemented. Once you have started thinking about starting your own business, you need to start thinking about your own role in the business. There will be obstacles, but if you do it right, it is extremely rewarding. Here are some critical questions you will need to ponder on before quitting a paid job to become self-employed, and I write against the backdrop of someone who has experienced this transition.
Why do I feel compelled to quit my paid job to go into self-employment?
Why do you want to start your own business?. The three primary reasons people become entrepreneurs and start their private businesses are: to be their own boss, to pursue their own ideas or dreams and, to realize financial rewards. But there are dangers of unrealistic expectations. Here are reasons people often give and some notes of caution.
A person may quit as an employee to escape an unhappy situation in their office such as: delayed promotion, job responsibility, employer new policies, more hours of work, hatred for colleagues and boss, lack of job satisfaction, low income or incentives and so on. You need a proper reflection in each case. It may just be that you need to change your job or possibly transfer to a different unit in your company. If you are thinking of more money as your major motivation to quit, there is no guarantee that you will make more money in your own business. You will have job satisfaction when things are working out for you in your business, but when things go bad, everything stops on your table.
Whatever reason you have for leaving as an employee to become self-employed, it has to be genuine, realistic and true otherwise, it can bring on a host of new and unexpected challenges which might make you unhappy for the rest of your life. For me, quitting as employee to become a business owner is something I dreamed of from the first year of my job as an employee. I love challenges, innovations and continuous improvement. I love experimenting with new ideas and solving business problems. I am passionate about taking on something unique. It brings fulfillment to the kind of life I want to live. I love the big picture and making impact in my generation.
We tend to succeed when we engage in something we really love to do. Barbara Winter, in her great book, Making a Living Without a Job, says passion leads to purpose, that once you get in touch with those things you are most passionate about, you can begin to create a business of purpose around them.
Are you right for entrepreneurship?
The question is not whether entrepreneurship is right for you but rather whether you are right for entrepreneurship. Think about the things that separate employees from self-employed persons. Below are the attributes of entrepreneurs that will help you understand your entrepreneurship IQ .
- I am willing to work for 70-100 hours per week.
- I am willing to live on a low and irregular income with my family until business thrives
- I am not afraid of uncertainties, failure, or taking risk. I learn from them
- I have the mindset and faith that anything is possible and the tenacity to stick to and accomplish something once I get started
- I love creativity rather than following routine and status quo
- I tend to rebel against authority: I want to be my own boss
- I have the ability to multitask: performing multiple tasks like sales, marketing , accounting , book keeping.
- I have the passion that transcends the comfort and income of my current job.
- I am a self-starter with great self-confidence and self-discipline.
- I have the ability to fire someone who really needs the job my business provides.
- I am a visionary with leadership charisma.
- I am persistent, with great deal of drive and stamina. I see problems as opportunities. I have a good intuitive sense and thrive on new ideas
These are some of the prerequisite that will prepare you for a business startup. If most of these apply to you, you are a potential business owner and you might have what it takes.
What are the reality checks I need to know or do before I leave my paid job to become self-employed?
Are you likely to find what you want in self-employment instead of your current job? Think about it.
You are taking the risk which you have to involve your family for cooperation especially if you are married with children. You will need to discuss with your family why you want to quit your job, explaining what you find attractive about your new way of life and listen to their concerns and fears
Your family must be prepared for the impact this can have on family life. You must be sure that your family can accommodate the risk self-employment imposes, especially in terms of low income in the early stage and perhaps business failure.
Be clear about your core values and how your new life will be in alignment with those values.
The transition is a journey into the unknown and you are creating an entirely new lifestyle. There would be time when you feel lonely and isolated, but the reward will be well worth it
The people who are dependent on the regular income your current job provides may lose the privilege as you may not have money to throw around. Your income may fall flat!
If you quit your job to be self-employed, plan how you could later get back on some job if you absolutely had to: have a plan B.
Understand that change of direction is reversible.
You have to plan for some contingency in case things go wrong. When one person goes into business, everyone in the family is affected.
Analyze the event of how you are not making any headway in one, two, or three years after you quit .and think on what alternatives are available.
Give a careful consideration to what you might need in case of emergency or in case of a long time illness.
Define the worst case, accept it and do it.
What financial requirements do I need to consider before quitting my job?
Financially speaking, it is important that you take these steps.
1 Pay off any debt or loan you have incurred.
2 Start saving, or increase your savings aggressively with a savings scheme or cooperative society for at least three years ahead of quitting the job. You could increase your savings by 50, 200, or 300 percent to enable you embark on your start up.
3 Cook your food at home instead of eating out, to save cost.
4 If you have multiple cars, park some of them and cancel insurance for a few months.
5 Cut down your unnecessary expenses. Sell any item draining your money and add the money to your savings.
6 Analyze your current monthly expenses and map out a transition plan that can carry you through 6-12 months before your business begins to yield profit.
7 Stack your house with food items that can last over the period of 6-12 months so you will not be drawing money heavily from the business. If you lack some of these basic things, you cannot concentrate during this transition .
8 If you are not a home owner, pay a year or two upfront to avoid landlord stress of monthly payment.
9 Choose an affordable school and health care for your children, home and office you can consistently and conveniently pay for, till your business becomes established. Choosing expensive home and school will sap all your resources and drain the business.
When is it appropriate for me to quit?
Ensure you observe all the points that were discussed under the financial requirements.
It will be wise to learn or work in a business you want to practice before you quit your job. You can do this as a part time to your current job or during your annual leave periods. Working in a business like the one you want to create will teach you things no book can. Most people go into business they love to do. However, the fact that you are a great cook does not mean you can run a successful restaurant business. You need to know everything else it takes to start and run a successful business from finance to marketing, sales, hiring and firing, getting customers, and so on. You will inevitably wear many hats. Talk to as many people as possible. There are many great books on business startup, which will help you to get along smoothly during the transition.
Have a business plan and understand how long it takes to make profit
Quit your job at a younger age (say from 35-40 years). Then you will have enough time, energy and passion to pursue your purpose.
Research your idea: the market you are going into and seek advice from experienced doers of your niche.
When promotion or award is near and you are going to be part of it, you could wait to get the title or the financial reward. This will boost your startup.
As a single, quitting your job is easier. You are bearing the consequences all alone. You hurt nobody. It is also easier when your spouse has a stable job that can sustain the family granting your spouse is the understanding and cooperating type.
Getting a mentor that will guide you through the process is very essential. Here are some of the key things you may need to know from your mentor or from people who are doing great in the area you are going into:
How much does it cost to start the business?
What opportunities are there in the business?
How much income can you make from this business?
What challenges are associated with this business?
What do they like most about the business and what do they like least?
If they are starting the business over, what would they do differently?
If you are ready to quit and there is downsize or lay off coming, you could volunteer by talking to your boss to include your name . In this respect, you will probably be eligible for unemployment compensation that will help your finances.
Successful career change can be a very productive process. Set a goal of the month and year you want to quit. Otherwise, you may procrastinate quitting till your retirement. Set as a goal the year and the month you wish to quit.
Why do you need to quit your job on a good note?
You need to maintain a positive relationship with your employer before you quit. Your linkedIn or other social media profile will be referenced and you never know when you might need that old employer to give you a reference. Your place of former employment is as well your starting point for your network. You will need to connect with your former staff and colleagues for business purposes which may result in your rapid breakthrough especially when your new business is not competing with your former employers.
In conclusion, If your passion to become self employed really excites you, do it anyway. The author of Four Hour Week, Timothy Ferris in his book,admonishes you to consider tattooing on your forehead : ‘’What we fear doing most is usually what we most need to do’’. If you don’t pursue those things that excite you, where will you be in 5 years, 10 years? Do not allow 10 years of your finite life to pass doing what will not give you some fulfillment. Model the habits of those who excel in their endeavor. Don’t turn so conservative that you become much afraid of building a life that you have always dreamt of.
Are you self-employed? Did you quit a paid job to become self-employed? What would you add to the list above? Kindly share your thought, stories and questions. Your interaction with our post creates a reservoir of wisdom for all our readers to benefit from and remember to like our post
By Olusegun Solaogun. 4/4/19Share with Friends