Starting a business is a massively exciting time. You’re working harder than ever, turning plans into actions, and serving the world with your talents.
However, unless you’re launching the latest, VC-funded tech company, you probably have a day job. After all, you need a little cash to keep you going while you wait for your hustling to pay off.
As I’m sure is obvious, when you, an entrepreneur, feel stuck in a day job, you get restless. You start to feel like your time is better spent building YOUR business—not working for someone else’s. It’s tempting to leap into the unknown without a backup plan, but you know it’s risky.
How do you know when you can afford the leap from employee to entrepreneur? Here’s a step-by-step plan for staking out on your own:
1. Determine your monthly expenses…really.
One big mistake that transitioning entrepreneurs make is in thinking they can live like a minimalist after leaving their j-o-b. They’ll say, “I just need enough to cover my bills. After that, I’ll eat ramen, stop buying stuff, and avoid going out for a while.”
Life might go as planned. But it also might not.
Knowing that you’re better off with more than less, track your REAL expenses for a month, including irregular purchases like gifts, nights out, car repairs, “oops” purchases, etc.
Also, consider any new expenses you’ll have once you stake out on your own, like insurance!
2. Stash away 6 months of living expenses in a savings account.
Six full months of living expenses might seem like a HUGE amount, but with cash on hand, you’ll be in a great place to weather any unexpected issues.
Your savings will keep you from running back to a cubicle if a big client backs out, if you hit a dry spell, or if your car randomly starts sending sparks in the air.
3. Get enough clients or customers to cover your monthly expenses—for 3 consecutive months.
This is the most important milestone of all.
Having 3 consecutive months of work proves that your business idea is awesome, your market is hungry for your services, your prices are right, and your marketing systems are working.
What’s more, if you can do this while still working at your job, you can easily replicate it when you’re on your own.
4. Remember A-B-M: Always Be Marketing.
When your client roster fills up, you may be tempted to stop marketing yourself. After all, if you’re working a day job, serving clients, and trying to maintain even a hint of a social life, you might not feel you have time for marketing.
The problem with that is with no new marketing, no new clients! Without new clients, you’re likely to be a victim of the dreaded “feast or famine” cycle.
Programs like Creating Fame will show you how to ensure you’re always getting your name out there, and bringing in a steady stream of new prospects. Consistent marketing means you’ll bring in clients before and after your leap!
As a new entrepreneur, it can be frustrating to work a job when you really want to pursue your own business full-time. You can afford to make the leap if you just reach a few milestones: build a 6-month savings account, complete 3 months of profitable client work, and commit to an ongoing marketing plan.
Taking these steps will ensure a smooth and LASTING switch from employee to entrepreneur.
Do you have any more tips to help from going to full time employee to full time entrepreneur? Share in the comments below!