5 Things You Need to Know Before You Quit Your Job to Start a Business
Updated: Jun 23, 2020
Do you have a brilliant idea for a product or service that you want to launch? You're probably excited and scared at the same time, that’s perfectly normal.
I left my corporate career 10 years ago. My story is not a typical one, I didn’t quit my job to start a business. That was the last thing on my mind at the time. I left my job to heal from severe anxiety that had my heart rate bouncing between 140bps - 160bps for days at a time.
I never would have left my job if I didn’t feel that my life was at stake. My identify was completely caught up in my title and in climbing the corporate ladder. Once I healed it was my intention to go back to a corporate career, and as you can guess that never happened.
I believe a bigger master plan was in the works.
If there was a test you could take to see if you qualify to be an entrepreneur, I am sure I would fail. I don’t have the qualities of a typical entrepreneur. I don’t like high risk, I am not super creative, I’m not hyper competitive and I didn’t have a specific dream business that I wanted to bring to life.
I agree that not everyone is cut out to be an entrepreneur but I don’t believe it’s based on the qualities above. I believe you are cut out to be an entrepreneur if you have a passion for it and if you are willing to stick it out during the challenging times.
If you want to own your time, create financial stability on your terms and you want to launch products or services that you love out to the world, then you probably qualify as an entrepreneur.
I have a business background in both my education and my 15 years in corporate, and that alone did not prepare me to build my own business.
I compare having a job to swimming in a pool, as long as you can swim you are safe. Starting your own business is like swimming in the ocean. There are no walls to keep you in a safe area. You have to create your own boundaries, you have to decide how far you swim and in what direction. There is a lot more freedom and a lot less clarity and direction.
Before you quit your job and jump into the unknown and start a business, take some time to prepare yourself. Let me help you get ready with 5 things you need to do before quitting your job and starting your own business.
Everything that I share with you comes from my own first hand experience of 10 years coaching entrepreneurs across a variety of business segments.
1. Define Your Why
Your WHY is your purpose. It’s your reason and your inspiration to take action. It’s your compass that you will need to consult time and time again when you go off course and get completely lost.
If you are a corporate veteran, you may be wondering why is knowing my WHY so important to start a business? You may have experienced success in your career without having a clear why or intention for your career path.
As an entrepreneur, you will be challenged, you will fail and you will doubt yourself many times.
Your WHY is what is going to save you from quitting. Simon Sinek says “once you understand your WHY, you’ll be able to clearly articulate what makes you feel fulfilled and you’ll be able to make more intentional choices for your business and your life.”
To create your WHY statement, I recommend Simon Sinek’s simple formula.
TO ______________________________ SO THAT ____________________________________.
The first blank represents your contribution — the contribution you make to others through your WHY. And the second blank represents the impact of your contribution.
It’s that simple fill in the blanks with the statement that is meaningful to you.
2. Explore Your Target Market
Having a great idea is not enough to start a business. You need to make sure you have an idea for a product or service that clients value. There is only way to accomplish that task and that is to conduct market research and ask questions to potential ideal clients.
Start by Identifying larger groups that you assume may be interested in your product or service, then you can get more specific with more research.
A good place to start is to identify gender, age groups, income levels, locations, and experiences.
You may not see a lot of references to including experience in typical marketing textbooks and this is probably one of the most important categories. You want to be clear on what is it the your target client is looking to experience, what do they want to feel or what is it that they are trying to get away from feeling.
Next research your competitors, and if you think your product or service is unique, look at your closest competitor.
Look for what your competition is doing right, what do the clients love, and look for where they can improve and evaluate if you want to go after the same target market or if you want to niche and go after a segment that the competition may not be servicing.
Once you have done your research you need to make sure that you test your assumptions by asking questions of your identified target market. The more people you can talk to, the more accurate your information will be.
Keep in mind that everything is changeable. You can and you will most likely adjust your target market after you start your business. The key is to have the best educated idea of who to start marketing to, then once you test out the market you can make adjustments and you can expand your target market if and when it makes sense.
3. Project Your Numbers
If you are a creative entrepreneur, I can already picture you skipping this section in its entirety. I have worked with many creative entrepreneurs, they are amazing at bringing to life brilliant ideas, yet they tend to avoid working with numbers.
Trust me, every entrepreneur has to face the numbers at some point to stay in business. Get comfortable now with estimating and knowing your numbers.
There are 3 categories of numbers that are a priority for you to figure our now before you quit your job.
Savings - calculate how much money you need to live your life in the quality you desire for 1 year. This is the amount of money you need to have saved before you quit your job to start a business.
Money doesn’t bring happiness, but neither does poverty. If you are worried about your basic needs you won’t be at your best to create a new business.
Revenues - Project your first year revenues as best you can. It is better to do this exercise even if you are uncertain about the numbers than to skip this step.
Expenses - Estimate the expenses to start the business as well as to run the first year in business. Once you have the estimated revenues and estimated expenses, you can calculate your estimated profits and that will give you a good idea what you will be able to pay yourself in the first year.
4. Create an Idea to Launch Roadmap
In order to build a business, you need to define your idea in concrete terms. When you define it, the clearer everything else will become.
As part of my business model I have a discovery call with every potential new client. Many times, I hear ideas that are less than cooked! I don’t feel in integrity taking on a coaching client that is not ready with a fully baked idea so I give them the homework to create a roadmap from idea to launch so that they can fill in the blanks and solidify their idea.
In many cases, when these clients call me back they have actually come up with a whole new idea and this time they have a roadmap and a fully cooked idea ready to go.
To create an idea to launch roadmap answer these questions:
Who is your ideal client?
How does your product or service benefit their lives?
How long will it take for you to build the product or service?
What do you charge for your product per service?
What are your estimated revenues, expenses and profit margins?
How to do you deliver the product or service?
How would you pitch your idea to a potential client?
How will you cultivate an audience for your product or service?
5. Test Your Product or Service on a Real Customer
I know if you are developing a product it may be harder to get to development stage while still holding down your job. If this is the case for you, at least test your idea with a real customers that are in your target market and that are willing to pay for its value.
If you are developing a service such as consulting, then you will have a greater opportunity to test out your service.
Be sure to get paid, it’s not a fair test if you are just offering your services for free. Yes, you need to practice but if you are not yet ready to charge for your services, then you are not yet ready to quit your job.
When you start exploring your business idea while you are still employed, you have the best opportunity to get your business off the ground in a safe and profitable way.
If you are considering quitting your job, let me know which of the 5 steps presents the greatest challenge to you and why?
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Wishing you love, joy and peace,