We’ve all seen success stories of people leaving their jobs to pursue their side hustle full-time. While many of us want that same reality, how do we know when to take that leap? The answer to this often terrifying question isn’t simple. BAUCE wants you to live your best life doing what you love. If you’ve been considering leaving your job and boldly becoming your own boss, here are some things to consider.
Do you have an emergency savings or a financial safety net?
One of the most empowering things to consider before giving your two weeks’ notice is whether you are financially prepared. Unless your side business is making you more than your full-time job, you will most likely experience a drop in income once you walk away. To avoid a diet of rice and beans because that’s all you can afford, prepare a financial safety net by building emergency savings. To start:
- List out the cost of all your necessary expenses.
- Calculate the total cost of your essential expenses for 3-6 months.
- Make that number your savings goal.
Although it’s possible to quit your job with minimal savings and then hustle to make up the difference, saving money is often the stressless route. Once you know your savings will cover your bills for several months, you can prepare to leave your job.
What benefits will you be leaving behind?
While your boss may annoy you, or your workload may be exhausting, one positive thing about your day job is the benefits. Thus, before leaving watching away from that soul-sucking job, find out which benefits you might no longer have. Especially if you have a severe medical condition, you’ll want to look into other medical care options before leaving your current health plan.
Some resources and websites you can look into include the following:
- HealthCare.gov
- Small Business Health Options Program (SHOP)
- Freelancers Union
- National Association for the Self-Employed (NASE)
Consider your retirement savings
Your job may offer retirement savings in addition to health insurance. Find out how to take your hard-earned money with you once you’ve walked away. Additionally, if your job has a contribution match program where they match the amount you contribute, consider adding the maximum amount you can. By doing this, you can earn extra cash before you leave.
If you don’t have a retirement plan with your current job, consider opening an individual retirement account or IRA with your bank. An IRA is a tax-advantaged savings account that can help you save for retirement. A retirement plan will help you manage your money to retire when you’re ready.
Can you leave on good terms?
Many of us wish that we could quit jobs and all the last day walkout, shouting how we thought every work meeting was a waste of time and how pizza parties don’t show employee appreciation. While this may be the dream, leaving your job on good terms is beneficial and vital for future endeavors and maintaining positive connections. It can lead to positive references, networking opportunities, and a clear conscience.
As you prepare to go out independently, check in with your boss. Learn more about your strengths and weaknesses so that you can use your skill set to build your business. Settle any misunderstandings or complications you may have had with your coworkers. You never know which coworker can refer you to your next client.
Are you ready to embrace an entrepreneurial mindset?
One of the biggest attractions of entrepreneurship is the freedom and flexibility of running your own business. However, freedom can be like an open bar. If controlled, freedom feels good and exciting. Having freedom without limits can lead to being unproductive, spreading yourself too thin, and not achieving your goals.
For instance, in a 9-to-5 job, you’re most likely used to working a set number of hours. You clock out and go home. However, running your own business may mean working irregular hours and can come with less structure. You may also be used to doing one assigned role in your 9-to-5, but being an entrepreneur may mean doing multiple roles. Therefore, you must learn various skills like account management, marketing, and social media to help you run your business. Once your business grows, you can begin to hire for other roles and focus on only certain areas of your business.
Before pursuing your passion full-time…
Now that you’ve determined the give in your safety net, let’s consider the health of your business. Here are questions to answer to evaluate your business.
Is your business well-established?
A well-established business doesn’t mean you bring in thousands of dollars monthly. Having a stable business means that your business is more than an idea. For instance, do you have a business plan? Is your product or service established? Do you know how to market your business successfully? Who is your target clientele? Have you considered the different risks and threats facing your business?
Knowing the details of your business will give you the peace of mind and confidence to keep it running and increase your chances of success.
Do you have a strong client basis?
A solid client base can include customers who consistently buy from you, a strong group of customer leads, and a way to reach new clients and audiences. Is your business something people are aware of and interested in?
If you don’t have a strong client basis, you can start building one by:
- Collaborating with other businesses
- Networking and building relationships
- Knowing your target audience
- Providing valuable content
Do you understand your profit margin?
You may be at a point where your business is making money, which is excellent. However, you don’t want to overlook your profit margin. This is the difference between revenue or how much your business makes and profit. Simply put, it is what you’re making in your business more, less, or the same as the money you put into maintaining it.
Generally, you want a high-profit margin of about 10% or 20%. To calculate your profit margin, divide your net profit by your revenue and multiply it by 100.
If you have a low-profit margin, consider what expenses you can cut to increase your profits. You may also want to consider different price points to sell your product or service better.
