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Think Twice Before Quitting Your Day Job To Focus On Your Startup

by
Julie Farless
on
3/26/2019
Think Twice Before Quitting Your Day Job To Focus On Your Startup

According to one recent study from the Small Business Association, approximately 627,000 new businesses are launched in the United States every year. This makes up a fairly significant percentage of the 29 million small businesses that have opened across the country since 2008.

Every day, people wake up to find themselves in a situation that is nearly identical to the one you’re probably in now. You’ve got more than just a great idea for a new business — you’ve got a fire inside you that will be impossible to put out. You can see exactly what that idea has the potential to become five years from now, and you understand precisely how difficult the road ahead of you now is. But your passion is unwavering, which means that you’re about to take those first steps toward becoming the entrepreneur you were always meant to be. The only thing that stands between you and that goal is your day job. If you can just find a way to quit that, you’ll have all the free time you need to get started.

If that sounded familiar, there are a few key things you should know. The most important is that you may want to pump the brakes a bit as far as the whole “quitting your day job” part of your plan is concerned.

“Don’t Quit Your Day Job...”

All told, one of the biggest challenges that all entrepreneurs face is timing when to take the plunge and quit the main job or, in other words, give up their main source of income. This is the same issue that the Facebook founders went through more than a decade ago when determining how to manage their progress toward starting what would become the biggest social network in history and their summer work.

However, it’s critical to acknowledge that those who kept their day jobs were 33 percent less likely to fail in their new venture, according to a far-reaching study of more than 5,000 people in the U.S. who became entrepreneurs from 1994 to 2008. The study touched nearly every type of business you can think of and included people as young as in their 20s and as old as in their 50s.

The founder of Nike remained at his day job for five full years before leaving to focus 100 percent of his attention on his new company. The developer of Spanx kept her day job, too, and is now worth about $1 billion, according to Forbes. Minecraft is one of the most successful video games in recent memory, and its developer remained at his “regular job” for a year before he left to pursue his passion full-time. The list goes on and on.

So, if you think that you absolutely need to quit that day job, or else you’ll be forced to compromise on the grand vision that right now only exists in your head, the good news is you’re wrong.

The Essential Balancing Act of Being an Entrepreneur

All told, there are a wide range of different ways to get your business started without quitting your day job, all of which are worth exploring.

Depending on the type of products you want to produce, dropshipping can absolutely be a viable option. Not only does dropshipping allow you to essentially mitigate the risk of finding out that your target market might not be as large as you think it is, it also means that you don’t need to stock products in a physical location. Instead of sinking a huge amount of working capital into inventory, you’re essentially manufacturing and shipping your product on-demand.

If your dream is to make shoes, for example, you design everything and develop your relationship with a supplier. Once someone makes a purchase, you place an order with that supplier — who then takes care of the rest of the process, including things like packaging, fulfillment and more. All told, dropshipping is a perfect opportunity to eliminate a lot of the potential obstacles that would require time away from your day job in the first place — thus making it an ideal situation for budding entrepreneurs like yourself.

Likewise, the internet is a haven for taking your existing artistic pursuits and turning them into viable revenue streams in the easiest way possible. Let’s say you’ve always dreamed of becoming a photographer and are in the early stages of getting your business off the ground. Instead of opening a gallery, begin by selling your work online. Shopify is just one of the many places that allow you to do this right from your computer. Then, once you make enough income to prove to yourself that your idea is viable, you can think about devoting your attention to this full-time.

It’s All About Getting the Timing Right

Generally speaking, there are a few key signs that will tell you that the time may be right to finally quit that day job. These include:

  1. When you’re ready to start scaling your business, but you just don’t have the time. If you’re making money and experiencing growth, the chances are excellent that it is finally safe to jump into your passion full-time.
  2. You’ve made enough money to support yourself. This one is self-explanatory. If your business is making more money than your day job, you can safely transition into the former and away from the latter.
  3. You’re finally comfortable taking that next step. Nobody knows your situation quite like you do. Therefore, if every instinct in your body is telling you that now is the time to make that massive shift, by all means — go for it.

To speak to that last point, it will probably never feel like the “perfect” time to quit your day job and devote all of your attention to your business. But that’s OK — because provided you’ve paid attention to the warning signs and you’ve thoughtfully constructed a long-term plan, you’re already in much better shape than a lot of other people. You’ll never be able to totally eliminate the risk associated with such a big life change. But by understanding that risk and where it comes from, you put yourself in an excellent position to mitigate it as much as possible.

In the end, the most important thing to understand is that the myth of the starving entrepreneur who gets by on passion and Ramen noodles is exactly that — a myth. You do NOT need to quit your day job in order to become the business leader you’ve always wanted to be. Any successful entrepreneur in the last two decades with a name you remember has proven that time and again.

Think about it like this — your own creativity has already gotten you a long way, helping you to come up with that incredible idea for a business in the first place. Now, it’s time to rely on that energy again. If you hang onto your day job as long as possible, you increase your long-term chances of success exponentially. Yes, it may take a bit longer than it would if you had all 24 hours a day to focus on this one venture.

But then again, good things are worth waiting for.

Martinez & Shanken, PLLC writes for CountingWorks, an accounting news and advice website. Reach the firm at [email protected]

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Julie Farless

Julie Farless

Martinez & Shanken, PLLC is a Certified Public Accountant (CPA) firm based in Gilbert, Arizona. We provide a full range of accounting, bookkeeping, consulting, outsourcing and business services, but we specialize in tax preparation. We work with you to ensure that your personal or business processes are conducted in a manner that ensures ongoing integrity in your financial transactions. We are available to answer your questions and help with your ongoing tax planning and changing business needs.

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