While some people maintain their full-time jobs while running a business, many prefer to kiss their 9 to 5’s goodbye. The plan is often to supplement or exceed their current income to sustain a living on their own. That way, they can focus all their time, attention, and resources on something they love. “Leaving work to start a business” though the idea sounds enticing, you probably shouldn’t ditch your full-time job until you’ve considered factors like these listed below.
If you’ve been running your business for a while now, you have some idea of how much it costs to operate. Until you start accumulating income, you’ll have to cover these costs out of your pocket. If you aren’t able to secure a personal loan or line of credit to start your business, the money will have to come from your budget. Do you have enough saved up to cover business expenses without the security of your paycheck? Maybe you only need one of the small loans to build credit to help get you to a place where you can then secure a larger business loan.
Health And Life Insurance
When you worked for someone else, things like healthcare and life insurance were probably part of your benefits package. Your employer likely paid all or a portion of these expenses for you. Once you give notice, you’ll no longer have these benefits. Therefore, you need to determine if you have the money to pay for insurance policies. Fortunately, you can find quotes for combined life insurance with healthcare to save on this necessary monthly expense.
Retirement Accounts And Disability Coverage
Two other benefits you’ll lose once you quit your full-time job are your retirement savings and disability coverage. You won’t have your employer contributions, which reduces the amount you’re saving for retirement. As for disability, you won’t get the same deal as employers can get through group packages. Of course, you want to save for your future. You also want to be prepared in the event that you get sick or injured and can’t operate your business.
Though the hope is to launch your business and start making more money than you’ve ever dreamed of, it typically doesn’t happen that way. There will be times when sales are booming and times when things are slow. During those downtimes, you need to have an idea of how you’re going to survive financially. You’ll need to have the funds to cover personal and business expenses until things pick back up.
Personal And Professional Emergencies
As you probably already know, life can hit you when you least expect it. In most cases, the event or circumstances require you to have money to resolve. You won’t be able to rely on your paycheck or ask for an advance once you’re a business owner. So, you need to assess how you’ll handle personal and professional emergencies. If the plumbing goes bad in the house, the car breaks down, or your partner loses their job, can you cover it? The same goes for your business. If the slow period lasts longer than you anticipated, the vendors up the price on supplies, or a customer doesn’t repay their invoices on time, will you be able to pick up the slack?
Last but not least, before quitting your job to focus on your business full-time, consider your stress levels. Although you may not have been fond of your job, it did provide security and stability. Once it’s gone, all of this responsibility will fall on you. As starting a business is stressful enough, you don’t want to pile too much on your plate. If you cannot handle the financial pressure, it’s best to hold off for a while.
You came up with an idea that you turned into a lucrative side gig or part-time business. Now, you’re ready to spread your wings and invest full-time. Be that as it may, quitting your job too soon could leave you juggling more than you can handle. So, before you make any rash decisions, consider the financial factors listed above to determine if you’re really ready to say goodbye to that 9 to 5.