Q. Dear Zenagos,
I want to quit my job and start my own business. My passion is cooking, and I think I can make a living delivering meals to elderly people who can’t cook for themselves anymore. I’m afraid I will run out of money. Is it smart to leave a good job and just take a chance?
Whether to quit your job to start a business depends on your personal circumstances and the viability of your business idea. With regard to your personal circumstances, how much of a chance are you taking? If the business fails, do you have any way of getting back on your feet? For example, does your spouse have an income that can support you both, or can you live with a friend or relative to save rent? If the alternative to entrepreneurial success is homelessness, then it’s probably not smart to take that chance. Similarly, if you have dependents who can’t survive without your income, then it’s wise to keep your job, for now.
Try a “Straddle” strategy
If you can’t afford to take a chance by leaving your current job, try a “straddle” strategy. See if you can do both at the same time, keeping one foot in your current job while you step into your new venture. This will be very challenging – doing two jobs is tiring – but much less risky. Having a consistent income while you test and launch your business idea is ideal. The revenue of a startup will most likely be inconsistent, and it can be for a couple of years.
Make a plan
Create a plan for testing and launching your business. Your plan should include a market research phase, in which you talk to prospective customers and learn what they want and need. Ask what they would be willing to pay for your proposed offering. See if you can get some customers while you hang on to your current job. It’s a lot easier to make the leap to your new business when you already have confirmation that you can sell effectively.
Make sure you fully understand the costs
Learning as much as you can beforehand can prevent you from wasting a lot of money. Starting a business can require significant financial investment and startup costs. Business expenses can include licenses and costs to meet city, state, and federal regulatory requirements. If you fully understand the costs before you leave your current job, you will avoid nasty surprises.
Business ownership is rewarding once you are successful. But, you do need to have your eyes wide open as to the financial risks. If you can step in gradually, you will have the smoothest possible transition.
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