Leaving your job to pursue your startup
One of the most frustrating aspects of founding a company is that you need time to work on your idea, but you also need your job (aka money) to live. What to do…what to do…
There comes a time in every entrepreneur’s life when they have to ask themselves, “Is it time for me to leave my ‘real job’ and pursue my startup?”
While the question appears simple (YES! YOLO!) it isn’t. There are very real consequences of quitting your job, which leads to important questions you should be asking yourself: How will I pay rent? What will I do for health insurance? How might this affect my family? If it doesn’t work, how much trouble will I be in financially and professionally?
Finding the Right Time to Leave Your Job
Finding the right time to leave your job and pursue your startup is tricky. Like double dutch, you have to time things just right. Leave too early and you might not have the idea validation, connections or funds you need to fully focus on your business. Leave too late and you risk getting distracted or getting cold feet, or maybe a competitor will beat you to market.
Questions to Ask Yourself
First things first - it’s time to ask yourself some hard questions. Go through the below questions and do a bit of soul-searching to make sure you are being honest with yourself.
- Do I really believe in this idea? Do I think this could work?
- What external proof or validation do I have that this could work?
- Do I just hate my current job or work situation and am I looking for a way out?
- Who is counting on me financially?
- How will this decision affect my future earning potential?
- Do I have enough money saved to live off of for the next 6 months or so?
- Is there a way to both work at my current job and validate my idea?
- When do I expect to start making money and paying myself a salary?
- Do I need to pursue funding options before making this decision (investment dollars, loans, crowdfunding, etc.)?
Pro tip: If you’re in a committed partnership, it’s important to get your partner’s full support before making this decision. Running a startup upends your life financially, logistically, and emotionally, so you want to make sure you’re in it together and ready to take on all the ups and downs.
It’s also important to agree on a fixed amount of personal money you are willing to invest in the company and the process. It’s easy to keep pouring money into your idea, so have some type of budget in-mind before you get started.
Scaling Into the Decision
Very few entrepreneurs have the capital and know-how to launch their companies full-scale from the start. And even if you *could* work that way, it certainly isn’t the smartest decision.
The most strategic thing you can do in the early days of growing your company is testing. And while it’s great to explore all kinds of market research like user interviews, focus groups, surveys, etc. the best way to know if people will pay for things is to make your product in a small batch (or as an MVP) and see what happens first-hand.
That’s what Molly Miller did when she launched Sift Gluten Free, a gluten-free bakery in Minneapolis. Molly worked full-time as a marketing copywriter and baked her gluten-free scones, donuts, and other goodies on the weekends. She’d sell them at farmer’s markets for fun, but noticed a real market need and was receiving great customer feedback. So she started selling her items wholesale to local coffee shops and grocers. She rented out space at a commercial kitchen, which prompted her to change her hours at work and move from full-time to part-time. After that, she secured even more clients and needed more space, help, and time to scale - that’s when she decided to quit her copywriting job. That gave her the additional time and bandwidth to buy a physical storefront, expand her brand, test new recipes, and hire more employees to run the shop.
None of this happened overnight. Miller scaled her way into full-time business ownership.
“I’m not a professionally trained baker and don’t have any food service experience, so starting out small helped me build my confidence in kitchen and business basics,” Miller said.
“As I made connections in the local industry, I saw opportunities I never even knew existed. I started to see how I could scale the business in a way that was intentional, sustainable for myself and for employees, and financially viable. It took time and patience, but by starting out slow and growing the business mindfully, I felt in control and knew I was creating something genuine.”
Earning Supplemental Income *While* You Grow Your Startup
Living in the gig economy has some very clear silver linings for entrepreneurs. It gives us the ability to find supplemental income while also focusing on our idea.
Consider going freelance or asking if your current employer will hire you on a contract basis. Could you take a leave of absence from your current job? Or perhaps you could find fractional work in another capacity as well, like at a company similar to Bus Stop Mamas. You could also apply for a grant like the Finnovation Fellowship or an accelerator program that comes with financial compensation.
There are other ways to get creative as well, like taking a few hours a week to drive for a ride-sharing service. Some larger employers offer great benefits for even just 10 hours of work a week, like Starbucks. There are plenty of ways to earn supplemental income while not distracting you from growing your business.
Get Honest + Rigid With Your Funding Plan
Make sure you have a financial plan before you quit your job. How much money are you willing to invest in your company personally? How much money, if any, do you need to raise? What kind of help do you need and how much will that cost?
Hold Yourself Accountable
Managing yourself is a really challenging and often-ignored part of the entrepreneurial journey. But it’s essential to hold yourself accountable. Have frequent check-ins with yourself and ask how things are going. Where do you need help? What is working well? What are you putting off and why?
But most importantly, you need to know what goal lies immediately ahead. Whether that’s a certain amount of monthly recurring revenue or a certain amount of users, downloads, or web traffic, you need clear metrics to demonstrate to yourself and others that things are working.
A great way to do this is by sending a monthly update to your investors and key stakeholders. This could be a list of formal stakeholders, board members, friends, or colleagues who have shown interest in what you’re building. Send a short email once a month reporting on important milestones, progress updates and more. Not only does this show your network how serious you are, it also shows YOU how things are going and growing (or not).
What else should you consider when making this tough decision? Let us know on social media! Or if you’d like to discuss your own start-up, let’s talk!
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Elyse Ash is a marketer, creative, writer, speaker, founder and loud laugher. In her free time she enjoys playing with her kiddos, going to new restaurants, reading and pretending she’s into yoga.