On countless occasions, I have heard folks lament about their jobs and how they wish they could simply quit and do something else; perhaps start a business of their own. If you are considering that option, this post should be of some help.
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When to quit (and, when not to)
Yes, we’ve all been on the wrong side of cruel bosses, inept organizational structures and long commutes that sap the life energy out of us. If you’re waking up every day dreading the thought of going to work, there is a strong case to make big changes in your professional life. But that does not always have to mean quitting your job.
Take some time to analyze your present situation (take a friend’s help if you’re not good at the ‘analysis’ part). I would not recommend picking up your briefcase and walking out of your cubicle at the first sign of trouble.
If you’re bored with your current role, it will help to understand that you can multiply your learning (and hence, excitement) by changing one or more of the following variables: industry, company, function and role. In fact, you can aim to change more than one of these simultaneously, if you’re so inclined.
If an unpleasant boss, manager or colleague is the source of your unhappiness, it may help to know that no one lasts forever. Besides, there is no guarantee of your new employment not having a worse personality to contend with, and almost any person can be managed if you have the right skills or approach.
If you live under the assumption that starting your own business equals to being your own boss, please know that it is nothing but a myth. Yes, you get more flexibility when you are at the top of the food chain in your own setup, but businesses ultimately serve customers. So, in a sense, the customer is always going to call the shots.
Are you ready?
Of course, every case is different, and no writeup can cover all the possible scenarios. If you’ve come to the conclusion that beginning a new venture is the only way out for you, it will help to keep the following in mind:
- Monthly Buffer– The first significant impact of leaving behind the comfort of a monthly salary is the opportunity cost involved. Everyone has monthly expenses – make sure you have a good handle on yours, including factoring in rent/mortgage payments, insurance, travel and other one-time or annual expenses you incur in a typical year. Then aim to have six-12 months worth of monthly expenses covered by way of savings, so that you have a decent buffer while you go about establishing your business footprint.
Tip: If you have the foresight to plan years ahead of time, aim to get debt-free as soon as possible. It will make a considerable dent in the monthly buffer needed.
- Business Costs– Depending on your business model, you will also need to factor in the costs that will need to be incurred before you start clocking any revenues from your new venture. A lot depends on whether your plans involve manufacturing (as in, a whole lot of capital costs) or services (which are more likely to involve ideas, technology and people). If you plan to seek a loan to fund your business, learn about your credit history and line up some contenders with whom you can whet your business proposition, well in advance. If you intend to seek venture capital, understand how the VC industry works and don’t get too optimistic about your chances of securing funding too soon.
Tip: In today’s age, crowdsourcing of funds is another idea that may work in your case. But your chances of success will greatly improve if the amount of capital required to get your new venture off the ground is not prohibitive.
- Planning vs Action– There is no substitute for planning before you take the plunge, but sometimes too much planning can also result in ‘analysis-paralysis’. Regardless of the business idea, remember to do your research and understand the market in which you intend to operate. But, also remember that a plan is only as good as its assumptions. Try and validate your assumptions with potential customers, if you can talk to some. You can reach other, more experienced folks in industry, if finding your target segment is not possible.
Tip: Make “shipping date” your priority. Don’t worry about building the perfect mousetrap in your first attempt. (Remember the first version of Facebook?) It’s better to have something out there that your customers can respond to, than months of working on ideas and having nothing to show for it.
Oh, and if you have decided to take the plunge, understand that your financial freedom will now solely depend on the success of your new venture. If you have dependents, it is a good idea to make sure you are adequately insured.
One last thing: Anyone can start a business, but not many can sustain one or make it scale. When things get tough, as they inevitably will, you will need all the passion in the world to get past it and come out shining at the other end.
If you think that quitting your job and starting a new business is a get-rich-quick proposition, I wish you luck. You will need a lot of it. But, take care of the essentials, and hopefully, your new endeavour can mark the beginning of an exciting new chapter in your life.