You’ve decided to start a business and leave your day job, congrats! It’s an exciting time to step into entrepreneurship and find that freedom that’s been calling you. You’re probably excited and a little nervous at the same time, which is totally understandable. It’s a big step!
Big steps need to have a plan in place. You don’t want to act impulsively and end up making a mistake. So, I’ve put together the 5 steps you need to do before quitting your job.
1. Become Legit
Make your business legitimate by setting up an LLC, S Corp. or Corporation so that you have an official business. Always check with your accountant and lawyer for what’s best for your situation and to make sure you’re tracking and documenting the right things.
Don’t get hung up on the business name at first. You can always change your DBA name at any time for very little cost. Using your name is a great way to start so that people recognize you. When you get further along in your business, you’ll probably find a better business name that aligns with your brand.
2. Do Your Research
In order to be successful, you need to do your research. Get clear on who your ideal client is and interview at least twenty of them to understand the language they use and the problems they describe so that you can develop the right message.
Do a competitive analysis to see what your competitors are offering, how they stand out and what sets them apart. Reach out and talk to some of them to find out how they started and what lessons they learned along the way.
3. Develop a business plan
You don’t need a hundred-page business plan if you are not seeking outside funding, but you still need to have the basics laid out to set you up for success. The key parts that you want to include are:
Company objectives and vision
Target market and offering
A strategy for starting up
A financial plan
Having these defined will give you the key components to keep you on track and set the direction for where you need to focus. Your financial plan should include your income and expenses. Too many people just look at their income stream and don’t realize that it can take a year or two to break even in your business.
4. Establish your goals
Set a timeline and financial goal for when you want to leave. These will be different for each person depending on what your current income is, how quickly you can grow your business, and how much savings you have in place. Giving yourself a date will help to keep you focused and motivated to reach that timeframe. It also keeps you from just working a side hustle for years without ever making the leap.
Your financial goal should be getting your business to a place that it has consistent income and is replacing a portion of your income. It’s the point where you know you can’t continue to build it without quitting so that you have more time to run the business.
5. Have a financial backup
Most businesses fail due to lack of cash flow and I don’t want to see that happen to you. Before you decide to leave your job, make sure you have a reserve in place so that you can manage through any slow seasons. You need to cover more than just your business expenses and ensure you also have enough to finance your personal expenses for a minimum of six to twelve months.
You’re probably accustomed to a level of lifestyle based on how much you make now. In order to make the investments, you need to get your business started the right way. You may need to cut back for a while until your business gains momentum. Try to get as much of your debt paid off and have some credit available before you leave your job.
6. Find an expert
You’ve been working for someone else and even if you’ve been in management, it’s not the same as running your own business. You need someone on your side that is going to help you avoid the mistakes that so many new business owners make.
Find someone who has been through it before and specializes in helping startups. You have to know what to do at each phase of your business and without that expertise and someone pointing you in the right direction, you can waste a lot of time and money doing the wrong things at the wrong time.
The allure of becoming an entrepreneur and being your own boss is a big draw, but you want to do it the right way so that you can build a successful business.
Tami Jaffe, Breakout Growth Expert, Speaker and Energy Transformer
Tami has made it her mission to liberate independent success-minded women from shackles of a corporate career so that they can start, grow and scale their own purpose-driven business and not only replace their corporate income but exceed it.