Leaving your job to become your own boss without going broke requires setting the groundwork just right. Few people do.
The prospect of quitting your job and becoming your boss is both liberating and scary as hell. But, instead of being impulsive, it’s best to take a deep breath and weigh all of the pros and cons so that you’re 100 percent sure that you’re ready (or at least willing) to take this leap of faith.
I didn't prepare myself when I quit my first job. I walked into my boss's office and quit. No two weeks notice, I was just gone. What an idiot! I was unprepared both financially and mentally to leave that job. Just three weeks later I was left with little to no options. Don't you make the same mistake.
To help you get started, here are the seven most important things that you need to accomplish before quitting your job and launching your startup.
1. Work on your resume.
Even if you’re moving on from your 9-to-5 gig, you still need to beef-up and update your resume. Why? Because an in-depth and polished resume can be used to convince your potential clients and investors that you possess the talent, knowledge, and expertise to be successful -- especially when you’re building your personal brand on platforms like LinkedIn.
When composing your new and improved make sure that you use power words that are persuasive and grab the reader’s attention. Additionally, you never know when you might have to take a side-job to survive.
2. Get your finances in order.
How much of your money do you have on-hand? Is it enough to get your startup off the ground? Do you have enough in an emergency fund so that you can live off of it for a year or two?
When I quit, I had $2600 in my bank account. I didn't even realize that I hadn't paid rent yet and that my insurance hadn't been deducted. This left me with not-quite $300 and only a couple weeks to figure it out.
I recommend you have a minimum of 12 months of cash to survive sitting in your bank account when you quit. If you don't, stay at your job longer than you initially planned. It sucks but it's the best way to do it at this point in your life. While you’re probably going to need to raise funds for your business at some time to grow, the less money that you have to borrow, the less money will be taken out of your profits. The longer the runway you have, the happier you'll be. When I started my startup Due, I had 36 months to figure it out.
In other words, get your finances in order so that you can bootstrap what you can and have stashed away for an emergency before quitting your cushy 9-to-5.
3. Do your homework.
Let’s say that you wanted to put an addition onto your house. You wouldn’t just start the construction if you didn’t have the proper knowledge, help, tools or permits. The same is true when starting a business. Are there financial and legal considerations like permits or licenses? It’s essential you know your audience and competitors, and most of all whether you really have something unique to offer the industry.
That is a ton of hard work when you’re holding down a full-time job, but thanks to powerful market research tools like SurveyMonkey, Think With Google – Marketer’s Almanac, Gut Check, Facebook Audience Insights, and Business Dynamics Statistics, you can conduct your essential marketing research quickly, conveniently and at a low-cost.
4. Set ambitious goals and create a game plan.
This is some of the most sound advice you can find, compliments of Nely Galán, Founder of The Adelante Movement;
“When I ask people what their goals are, I don’t want them to tell me they’d love to buy a brand new SUV. Everyone should have a special, private list of what they dream they will accomplish one day, from owning their own home to taking a trip around the world. When you create this list, project backward from the later years of your life. How would you like to be seen at the age of 85? What would you like to get done before you die? It sounds morbid, but it is the oldest motivator in the book. When your quality of life is at stake, you will achieve more.”
Once you have your goals in place, Galán suggests that you ask questions like;
Is there a product, business, or an investment that can make money for you continuously over the years, preferably above and beyond the job you are already doing?
Where would all of your income come from?
What contacts do you have that might buy into your idea or help you market it?
How would you support yourself if you went out on your own?
Doing your research, getting your finances in order, and setting target dates can help you answer those questions so that you can start moving forward.
5. Find a mentor.
A mentor is someone who has experience in the entrepreneurial arena and who can guide along your entrepreneurial journey. Mentors provide benefits like;
Ensuring that you don’t make the same mistakes that they did.
Helping you manage your emotions by providing advice and emotional support.
Saving you money since you don’t have to hire consultants or a business coach.
Expanding your network.
The best thing about mentors is that they’re easier to find than you may think. A mentor could be a business owner that you know (like a family friend or professor), meeting an industry leader at an event, following a business leader online, or reading a book from a world-renowned entrepreneur.
6. Put the wheels in motion.
You’ve gone over your finances, did your due diligence, established your goals, and found a mentor, it’s time to start putting the wheels in motion by;
Undertake legal incorporation, as well as any trademark protection.
Purchase URL and build a website.
Secure a company email address so that you can start making lists.
Open a bank account and line of credit dedicated solely to your business.
Build your brand by initiating a blog and social media accounts.
Start building your network so that you can identify co-founders, staff, investors, advisers, and interested customers.
Develop financial projections and business plan draft.
Start planning financially by trimming your expenses and establishing a budget
Create a mock prototype, along with a presentation for any potential investors or customers.
Keep mind that it’s perfectly acceptable to work on all of those when you’re off the clock, like on your days off when you get home at night. Working on your future business while at work is both unethical and illegal. You’re still getting paid to do your job and not work on an outside business.
7. Don't burn any bridges.
Everything is in place, and it appears that you’re ready for your product to launch, it’s time to take the next steps; quit your job and start your own business.
Make sure that you don’t burn any bridges on your way out. Prepare your resignation; it can be a brief document that simply thanks to your employer and describes what you learned from them and then give them a full two-weeks notice.
Most importantly, make sure that you don’t phone-it-in during those final couple of weeks. Again, you’re getting paid to a job. If you slack off and keep calling in sick, you’re ruining your reputation. It’s better to keep doing your best so that your former employer can be a reference, refer you to prospective investors or customers, and it leaves the door open if your company folds and you have to come back.
Are you ready to quit your job?
Starting a business is always harder than you initially thought. Before taking the plunge, take your time by conducting research, reviewing your finances, and start building your brand so that you know that there’s a chance your business is going to succeed. And, while you’re putting everything in place, you’ll still be able to have at least on a reliable stream of income until it’s time to move on from the daily 9-to-5 grind.
Remember. Starting a business is a marathon. Not a sprint.
John Rampton is an entrepreneur, investor, online marketing guru and startup enthusiast. He is founder of the online invoicing company Due. John is best known as an entrepreneur and connector. He was recently named #3 on Top 50 Online Influ...