When to Quit Your Day Job
If you have started a business, still have a full-time job, and have an investor involved in your business (or hope to have one soon), then you have a lot going on. And because you’re so busy, you might be wondering if it’s time to quit your day job.
Even though you are doing an incredible juggling act and may be ready to focus full-time on your business, you need to remember your obligations are to more than just yourself.
An investor is a partner; as a point of integrity, you should talk with your investor (or potential investor) about your intentions and the best timing for when to quit your day job. The investor should be onboard and in agreement with your decision.
Melanie’s Story – Making the Leap
One of my clients, Melanie, was struggling with determining her exit point from her job as she was growing her business. She was torn — her 9 to 5 job was bringing a stable income, and with two kids and a husband who was a school teacher, her income was extremely important to their family’s financial well-being.
However, she was working nights and weekends — and even over her lunch breaks — on her side business, and it seemed like it was taking off. Her homemade hair product line was becoming a success, but she was having a hard time keeping up with demand.
She knew she couldn’t truly scale unless she had an investor as there would be huge costs for outsourcing, and she didn’t have enough in savings to take that path.
When Melanie decided to create her business plan and pitch to investors, she was nervous. She didn’t know if the investor would expect her to keep working or if he or she would support her in quitting her day job and focusing on the business full-time.
In the end, she found two interested investors: one who did expect her to keep working and the other who wanted her full focus on the business. That second investor was willing to pay Melanie a salary, so she could comfortably quit her job and dedicate herself to the company.
The fact is that sometimes you need to reject an investor and wait for the one who really understands your vision. If that perfect investor doesn’t come soon enough, and you are burning the candle at both ends, then don’t lose hope – there is another clear answer to consider.
If You Don’t Have an Investor Yet…
I get how hard it is to try and launch a business while trying to keep your day job.
There is a breaking point. (I reached it myself when I first started my business.)
However, deciding to quit your day job without the right cash reserves can kill your business — and even destroy your personal financials very quickly — so be super careful about when you exit.
There’s a two part rule of thumb for when to comfortably quit so you don’t burn out. The first part is to have three months of personal and business expenses saved before you quit. The second part is to have a clear business plan that shows an attainable path to business income within the next 3 months.
Only you know what you can tolerate. If you see your business is growing and is on the threshold for something great in the short-term, and you are not able to work 40 hours a week for your employer without falling asleep on your daily commute (DANGEROUS!!), then it’s time to make some decisions.
If this post is applicable to you RIGHT NOW, then congratulations — you have a very good problem, entrepreneur. You are on the brink of a big milestone!