How to know when to leave your job to build your own business
We’ve all dreamt about handing in our notice and leaving our full-time job to go it alone and start our own business. And, for many, this dream has become a reality, with the world going startup crazy in the last 12-months.
Last year was a record year for startup creation in the UK and, according to Companies House Data, the number of new tech startups rose by almost 16% in the third quarter of 2020.
As an entrepreneur, mentor and champion of startups, this skyrocketing growth inspires me. But many - potentially incredibly successful - entrepreneurs are still at their full-time job, wondering when and if they should quit their job and go all-in on their big idea.
No matter what industry your startup is in, there is a time when you must decide whether to back yourself, leave your job and commit full-time to your business. But, before you do, these are the key preparation steps you must take.
Do you have enough savings in place?
The first consideration for any would-be entrepreneur thinking about leaving their job is funding. And by this, I don’t mean funds for your business.
These are savings for expenses that occur in everyday life - such as rent, mortgage, car payments and groceries - and costs that are easily forgotten about when you work for someone else - such as office space, postage, and IT equipment.
Without at least six months of expenses covered, entrepreneurs in the early cash-strapped stages of their startups make poor decisions that contribute to the failure of the business.
Remember, when starting a business, the odds are not in your favour, so preparation is needed to give yourself every opportunity to succeed.
Ensure you’ve fully validated your business
Entrepreneurs considering leaving their job should also fully validate their business idea before handing in their resignation.
You should know with a high degree of certainty whether the market is ready for your product or service. You should be able to prove the concept. And show that you’ve looked at what else is in the market and how you can solve a problem or enhance an experience.
Jumping into a business idea that you have not validated or thought through will jeopardise your chances of future success.
I have seen far too many entrepreneurs leave their full-time job without validating their ideas or conducting research beforehand. They almost always fail because they are unable fully to define their business or answer the key questions any investors will inevitably ask.
Get a mentor in place before you leave your job
If there’s anything I’ve learned over my 25-year career, it’s that other people’s opinions are invaluable when launching a startup.
Mentorship was critical to the success of my business early on in my career and this why I launched Entrepreneur Seminar, a practical programme which helps entrepreneurs launch, fund, develop and grow their own business successfully.
Any would-be entrepreneur should remember that there is huge value in having another experienced entrepreneur or business owner to turn to for advice and support.
Entrepreneurship can be lonely and incredibly stressful sometimes, and mentorship helps you know when an idea is a good one or a bad one. Mentors deeply relate to the situations and issues you will face and the challenges of entrepreneurship. They understand the skills and characteristics required to be a success and - most importantly - they have direct experience of making the challenging decisions you will need to make as an entrepreneur.
Don’t burn your bridges
Finally, you should leave your job with grace and not burn any bridges. Understandably, you’ll want to put your previous life behind you and focus on the future, but no business is failure-proof.
Despite your best efforts and intentions, your business may not succeed, and you may need to rely on your former employer for support or a reference. You never know what the future holds.