Develop a strategic plan and an action plan.
Free book preview Six-digit freelancer
This book provides you with effective strategies and tools to help you reach your full potential as a freelancer and achieve financial wealth.
5 min read
The opinions expressed by the entrepreneur's contributors are their own.
If you have entrepreneurial ambitions beyond your current 9 to 5 jobs, you are not alone. Fortune reported that as of last year, 49% of Americans under the age of 35 have a side job that can range from working part-time as a driver for Uber or owning a small business. Many will be satisfied with the act of juggling, both full-time responsibilities and sideline jobs, especially with today's more precarious economic environment. It can be too risky to consider a day to leave the comfort of a steady paycheck. Others, however, wonder how they can lay the foundation for their eventual departure from their full-time job to pursue their business idea.
Here's the good news: laying the foundations can feel far less intimidating than falling into the abyss. If you can set a set date to say goodbye to the company you are currently working for, you can plan out details like your finances and the way you will start your new business or move into the company full time. This can create a more seamless transition to business life. When you are ready to prepare, here are some things to keep in mind.
Prove to yourself that you can rely on your business
Passion jumping is great, but it's far more logical to make sure your business can actually make money – and enough money. The best way to prove the viability of your business idea is to just start out as if your livelihood currently depends on it. Sure, market research and competitive analysis can help you understand how your business will perform, but nothing helps you get a realistic inventory of economic feasibility other than pretending that you are already relying solely on your business.
Related: Large companies that started out as a sideline
Camilla Love is the managing director of eInvest, a company that offers active ETF investments. During a recent email exchange, Love underscored the importance of a financial and mental safety net. She explained, "It can be difficult to have a mental safety net. It is very useful to have an advisory board to guide you and provide ideas and challenges so that you don't fight all the battles yourself. Personally, I assign times during the day That I work on in business, not in business. Keeping your sanity green is critical to the sustainability of your business success. "
Enjoy the overlap
Maintaining the profitability of your business inevitably means that there is some overlap between your full-time job and running your company full-time. Some hopeful entrepreneurs may feel concerned about being too thinly divided between the two, but this overlap can also bring its own opportunities. In The Harvard Business Review, marketing strategist Dorie Clark advocated that ideally, you should hold onto your day job for as long as possible in addition to your personal business activities. The benefits of this overlap include more time to validate your business idea and funding opportunities for your own professional development.
Clark also noted that taking steps towards your business goals before you need the money can be very beneficial. "If money isn't your primary goal initially, you can be far more selective, over-indexing unpaid but prestigious engagements (such as guest lectures at business schools or TEDx lectures), and avoiding low-margin work or questionable customers that could damage your brand later She wrote. In the meantime, take advantage of the overlap by taking steps for your name and your new company name so that you have a launchpad when you finally exit.
Related: You don't have to be a starving artist
Plan six months in advance
Even if you're on the verge of checking your company's profitability full-time, a six-month plan can help reduce anxiety and ensure your launchpad has everything you need. One of the most important changes that new full-time entrepreneurs face is the inevitable ups and downs in income. Some months can be slower than others. So if you spend at least six months saving a nest egg and planning those rest periods, the transition can feel more seamless.
As a rule of thumb, you need to save six months. If your monthly spending is $ 3,000, make sure there is $ 18,000 hidden. It's natural to be optimistic about your company's potential when you're just starting out, but it's also important to be smart. You will never regret saving that extra money, even if it means you will have to stay at your full-time job longer than hoped.
As the founder of the Debt Roundup, Grayson Bell wrote for Mint.com, “While you might think six months' worth of ongoing expenses will be difficult to save, it is easier to dump it before you quit your job. It is easier to save money when you are making money. "
Keeping in mind the ultimate goal of being your own boss is an important transition that many entrepreneurs inevitably make. Take it at your own pace and complete development in a way that feels good for you and your company. You'll know when it's time to trust the call.