So you’ve spent the past 6-8 months dabbled in your startup dream and then one day you step off the cloud.
You realize your business ideas just might actually work and you have an exhilarating, yet horrifying feeling. You are now at that bridge (you know, the one you said you’d cross if you actually got there?), so what do you do next?
Having a full time gig and a startup is no easy task.
Is it realistic to have a startup without quitting your day job?
Let’s walk through the scenario and before making the leap, keep in mind this is not an exact science. You can also download this unfunnel infographic “Working Yourself to Death – What’s your R.O.P. on your J.O.B.?”
There is no perfect formula for a startup. The hours you burn just might not ever convert into happy retirement dollars. But there are a few criteria you can look at to help you with a comprehensive evaluation:
- Your Personal Bottom Line.
Can you afford to work full-time for your start-up? Look at your expenses compared to how much money you are bringing in right now. Can you justify not getting a consistent pay check? Can you match you salary and pay yourself out of startup profit? If not, hold off – a startup is stressful enough and you don’t need the added weight of dipping into your savings while your business gets off the ground. Suck it up at your full time job and keep the security you can cover your own overhead.
- Mental Grit.
Have you hit rough times and prevailed? If you don’t have any experience failing and overcoming challenges and issues (that make you want to jump off a bridge), you don’t know if you are mentally ready to be self-employed full time. It’s going to take a few more times getting beat down and getting back up to build that “thick skin” you need to be a business owner. Once you’ve faced a few really tough challenges, wait for one more (where you actually quit and come back) and then you just might be ready to go full-time.
Are you 100% sure what your company is going to sell and see how it can be profitable? Nail down your business plan BEFORE your family’s life depends on it. Have you tested a few different business models or did you just try the obvious? Are your products optimized? Are you confident you can replicate and scale efficiently? If not, work out the bugs while you can still afford to make some mistakes.
- Ball and Chain.
How supportive is your significant other of the desire of your startup dream? Do they play a role in your success or do they feel alienated and in the dark? You may be the one going through the motions but believe me, the whole family feels the side-effects of your business success. Make sure your family is on board and excited about your new business decisions. If they have reservations, hear them out or be prepared for some Friday the 13th Jason drama ahead.
- Strategic Partner(s).
Being self-employed can be lonely and you may often have to work late hours solo. No passion for business will overcome the need to learn, be motivated and have a strong support system (OK, well maybe for the few total introverts, but most start getting loopy quick). Make sure you have a network and team that compliments each other’s skills. Be aware and upfront about you weaknesses and make sure you have a plan to fill in those gaps.
- Devil’s Advocate.
Are you the only one that believes your business will be successful? Before making a full-time career change, make sure you have a few unbiased second options. Stop rationalizing those hidden expenses and come clean. Once you start adding employees and increase office expenses your profits will quickly diminish so be realistic. Make sure you are not just banking on a big lump of cash, but you actually have a plan to consistently bring in revenue 6 months from now.
Before hiring a team, start thinking about how you will train them. Do you have the management chops? Do you have the patience? Do you make people cry often, randomly talk about yourself for hours, or just plain hate dealing with dumb people? If there are any cracks in your people skills, start taking some courses and polish those “soft skills” because the next step requires your complete investment in people and key influencers. To be great, it starts with making everyone around you great. Be honest. It’s OK to accept your role as a thought leader and not a people leader (just refer to #5). A strong team is critical to your future success and no matter how brilliant you think you are, you won’t grow unless they think that too.
There are a few criteria to help you evaluate your choices. Making the decision to dedicate your life to a startup is a very personal decision that is dependent on many different variables.
Startup businesses and mathematical projections come in all shapes and sizes. You could have 5-year expected revenues ranging from less than $50,000 to over $10 billion. One business might only need 10 customers while another might depend on reaching 250 million users.
Most aggressive startups will want to multiply their revenue by 100x each year for the next five years and they are fine taking a loss for the first year. That is the reality. At your current corporate job you can expect a steady 5% increase in revenue each year. That’s a big difference in stability.
In the end, be strategic and realistic about your business. Push as hard as you can, but don’t push too hard or you might get burnt. You’ll know it’s the right time when it comes and when the demand outweighs the supply.
The startup business cases will never look as pretty as a full time career, but the potential payoff on a well executed exit plan could be worth the risk.
Are you thinking of quitting your corporate job? Share your tips, pain points and struggles in the comments.
Know someone about to make this hard decision? Share this infographic now.