By Nicholas Patterson | Southern New Hampshire University
Deciding to quit a job is a tough decision on its own but deciding to leave your full-time job for your business is even tougher. If done right, the decision can be extremely rewarding, and can allow to you grow your business and take it to new heights.
There are several factors to consider before making the decision to leave the security of a full-time job, such as having a plan in place and ensuring that you are fully prepared to take the next step in your entrepreneurial journey.
How Do You Know It’s Time to Quit Your Job?
There may not be a clear-cut answer as to when the time is right for you to quit your full-time job, but there are some key indicators that can signal you may be ready.
Lisa Cinelli, a career advisor for Southern New Hampshire University (SNHU) said it may be time to consider leaving your job if:
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You have a plan.
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You’re passionate and consumed by the thought of being an entrepreneur.
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You’ve conducted a strengths, weakness, opportunities and threats (SWOT) analysis for your potential or existing business and determined a need that it can offer.
On top of having done the research and planning, you’ll also want to consider the financial implications that quitting your full-time job might have. For example, you’ll want to make sure your finances are in order for your business’s next steps.
“I have always followed the 60% rule,” said Raymond Summers, a career advisor for SNHU. “When you have 60% of the revenues and market plan (needed) to launch your business and support yourself and your family, take the leap.”
Summers also said that startups typically don’t turn a profit for 3 years, so be sure to plan accordingly.
“When you feel you can make it happen, have a plan in place and are willing to stop at nothing to make your dream come true, then (you know) it’s time,” said Chapreese Pennington-Willis, a career advisor for SNHU.
Knowing when the time is right is just one of the first steps of your journey, but before making any major commitments, you should consider all your available options.
How Do You Decide Between Your Job and Your Business?
While quitting your job may feel like the best option at times, you’ll want to understand the variables before making such an important decision.
“It all comes down to (your) situation and the confidence of (your) business plan and risk tolerance,” said Summers. The two main elements he suggested focusing on are:
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Stability within your current career
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Current position vs. risk reward
Everyone’s situation is unique and you should factor in what you’ll have to give up and how risky a move it is. Maybe you’ve had a stable job for years and are thinking about leaving it to pursue a new business of your own. Or maybe you’ve had a side hustle in the works for a while and you’ve developed enough success to go all in. Take time with this decision and consider all your possibilities.
If you’re thinking of quitting your job, you could also consider if you have the flexibility to do both, Pennington-Willis said. It may be possible for you to continue working while creating and developing a business of your own. If you opt to focus on your full-time gig and side business, it may be a matter of re-prioritization in each to create a better plan going forward to succeed in both.
Here are some benefits and drawbacks of entrepreneurship that you should consider before going all-in on your business:
Benefits
There are many benefits of owning your own startup business, and among those is being the boss.
“(Being your own boss) is the best feeling” said Pennington-Willis. “Knowing that you built something and made it your own is powerful and impactful.”
Summers agreed, adding that a sense of accomplishment is one of the main benefits of quitting your job to pursue your business. Also, you may have more personal and financial freedoms while making business decisions as the owner.
Other pros to owning your own startup, according to U.S. Small Business Administration (SBA), are that you:
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Keep all the profits
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May run the business how you desire
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Own the idea
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Retain all the equity
Drawbacks
One primary drawback is that being the owner means more responsibility.
Pennington-Willis said a big drawback of owning a business for her was “having to take on all the responsibilities — when you are the boss, you are the blame.”
The increase in responsibilities can also mean needing to take care of your employees. This includes any layoffs or downsizing that may be required, said Summers. Also, more stress and longer hours can come with the increased responsibilities.
Other drawbacks to owning your own startup, according to SBA, are:
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No definitive timeline on when you may turn a profit
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Potential pressure to make the business profitable
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Upfront investments needed can be unpredictable
These drawbacks should be prepared for in your initial SWOT analysis of your business to help you begin planning.
What Type of Plan Do You Have?
If you’re serious about owning your own business, then you’ll likely have more than one plan in place.
Summers said it helps to have a “PACE” plan in place to ensure you are prepared for any unexpected changes. A PACE plan is:
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Primary plan
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Alternate plan
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Contingency plan
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Emergency plan
This is your plan A, B, C and D. You’ll want to have multiple options available to you in case something throws your original plan off-course. These plans are important to have completely ironed out before quitting your full-time job.
Make sure you have considered everything that could go right and wrong, said Pennington-Willis. Consider how things may expand if they take off faster than you anticipated as well as knowing when to call it quits if things are not moving as expected.
Remember, “ensure you are accounting for little to no profits for the first few years,” said Summers. You really don’t know when you’ll become profitable.
Support Available For You and Your Business
In addition to having several plans, you can look to professional support systems to guide you on your entrepreneurial journey.
Local chambers of commerce are a great source of support for entrepreneurs as they can aid in entrepreneurial development and business ecosystem building, according to e2 Entrepreneurial Ecosystems (PDF Source). This National Chamber of Commerce Directory will allow you to find which chamber of commerce is local to your business.
The National Chamber of Commerce itself is also a great tool for you. They have information on how to start, run and grow your business, some of which is specific to the industry you’re in.
There are other organizations that can prove beneficial to your business, too.
“I was part of the Business Network International (BNI) organization” said Pennington-Willis. Business organizations — such as BNI — generally include members from overlapping professions that network and share referrals on a regular basis.
Beyond business organizations’ support, finding a mentor can help build up your confidence and knowledge as an entrepreneur. Pennington-Willis said she was able to find mentors that were above her level within her organization as well as with other companies in the same field.
If you’re interested in finding a mentor for yourself, SBA’s resource partner SCORE sets out to aid entrepreneurs with the launch, management and growth of their small businesses. SCORE will help you find local mentors who volunteer their time to help their small business clients with ongoing support and advice. SCORE also offers a variety of services including trainings, webinars and online workshops to further enhance your business skills.
Consultants are also available for your aid. While they usually charge fees for their services, they can help entrepreneurs in a variety of ways including identifying any potential business problems and providing potential solutions and advice. For entrepreneurs seeking consultations in Northwest Arkansas, Startup Junkie offers no-cost consultations.
Whether you currently own a business or hope to one day, you can benefit by advancing your business knowledge and skills through education focused on entrepreneurship.
Educational Opportunities
If you’re interested in a degree to help you gain the knowledge to get your small business up and running, then a bachelor’s degree in business administration can help. In a program like this you can concentrate on entrepreneurship and learn skills such as:
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Performing market research
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Planning daily operations
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Understanding management principles
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Understanding what to expect on opening day
If you’ve already earned your bachelor’s, a Master of Business Administration (MBA) in entrepreneurship can help you level up tremendously as an entrepreneur. In a program like this you’ll learn to:
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Analyze data to make informed decisions
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Create a plan for your organizational culture that aligns with ethical and legal standards
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Create adaptable business strategies
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Implement improvements for your business
If you’ve considered all your options, created a sound system of plans and have still decided that quitting your full-time job for your business is what you want, then it’s time to start thinking about what comes next.
How to Quit Your Job to Start Your Business
If you are ready to quit your job, there are a few ways you can approach the topic.
For Pennington-Willis, it was all about talking with her husband and daughter. She also explained why she was quitting to her employer and ensured that her clientele was lined up beforehand.
It may prove beneficial to be open and honest about why you are quitting with your employer, as this could leave the door open to a return, should you need to in the future.
“(It’s important to show) professionalism when giving notice of resignation to a current employer,” said Cinelli. “That includes at least 2 weeks’ notice and potentially an explanation of your goals and pursuits depending upon the relationship you have with your leadership.”
Another thing to consider when quitting your job is getting the word out to others in your personal and professional network.
“Spreading the word on my social media was huge because I had people ready to support me and help,” said Pennington-Willis.
Once you quit your job, you’re ready to focus on your business full-time.
Tips and Advice for Your Business Journey
Here are some tips to consider along your business journey:
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Use your support system: This includes communicating with them and getting their feedback. Your support system could include the people you’re close with, such as friends and mentors — and especially your family, too. “Create a family “contract” that reminds you and them of your intentions when things inevitably get challenging,” Cinelli said. “This was a valuable resource for me when clauses contained within supported my decision to sell a business.”
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Establish a culture: Create a plan on what type of business you would like to run. This includes hiring a diverse team that will help support your culture and organizational goals, said Summers.
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Have a backup plan: Planning is a vital part to owning any business, but so is being prepared for anything. “This includes, but is not limited to, support from people you trust, extra finances just in case something goes wrong, a realistic mindset, timelines and being aware of your backup plan if things don’t go as planned,” Pennington-Willis said.
Is It Worth It to Pursue Your Business Full-Time?
So, you’ve thought about taking the leap and leaving the security of your full-time job, and now you’re imagining what it’s like to run your business full-time.
“It takes a special kind of person to start their own business,” said Pennington-Willis. If you have such a vivid dream that you can see and almost taste it before it happens, that’s when you know your time is going to be well spent.
While owning your business is a lot of work, it can be well worth it. And ultimately, it’s your decision on when the right time to quit your job for your business is.
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Nicholas Patterson (’22) is a writer at Southern New Hampshire University. Connect with him on LinkedIn.
SNHU does not endorse or sponsor any commercial product, service, or activity offered on this website.
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