I know this may sound a little odd coming from a man that has been advocating small business since age 8. I was out there on the street trying to talk my little brother into helping me with my lemonade stand and various other hair brain schemes even through high school.
However, one thing I’ve learned all these years in business myself, and also consulting thousands of clients, is that although there can be amazing rewards and benefits of entrepreneurship, it is still is an ‘up and down’ financially volatile roller coaster ride…especially in the beginning.
Thus, whenever I have a new client call me on the phone with unbridled exuberance tell me they are marching into their boss’s office tomorrow to quit their job and quote the song made famous by Johnny Paycheck telling their boss to ‘shove it’…I tell my client to slow down and hold on for a moment!!
Let me share 6 important tips that may save your sanity, your marriage AND your business before quitting your job tomorrow.
Don’t Create Unnecessary Stress. First and foremost, and I’m going to say it forcefully: don’t risk the farm until you know the business is a viable operation. Work your business in the evenings and on the weekends, and maybe even partner with others that can provide some labor ‘while you’re at work’. Keep the base pay of a day job so you don’t create additional stress for yourself. If you can’t pay the bills, like a house payment, rent, car payments, insurance payments, groceries or gas, then you will draw on the resources you need for the business and inevitably chew up your savings and go into debt…WHEN in reality it wasn’t necessary. I know what you will do!! You will be emotionally tied to your business, like any good entrepreneur. Yes…you need to be emotionally invested in your business, but not to the point you’re willing to risk paying your monthly bills.
Help Yourself Make Rational Decisions. When you lose your base pay and ability to survive financially, you will make short-term decisions rather than what is best for the business. You will move into a mode of desperation. That’s a dangerous place to be, and I’ve been there. Yes, you may pay the bills and survive, but you will have to use a fledgling business to do it. Thereby, it can completely handicap your business from its true success and slow down its growth because you’re using the business’s resources to live on when it’s starving for the fuel and nutrients to grow and get off the ground.
“Don’t put too much stress on your business and force it to cover all of your living expenses before it can handle it. This pressure can kill your business when it could be desperate for capital to grow and mature- be patient”
Keep your family on your side. Your spouse may be supportive and greatest cheerleader…I get it. But when you’re unable to pay the bills, working around the clock, in a mode of desperation, and paying for groceries on a credit card, your family will start to be scared and at the very least, no longer be your fans. Worst case scenario, the stress on the spouse and family can turn them against you and the business and even break up the family after serious emotional distress, fights and arguments about money. Keep the day job, even if you feel the business needs 100% of your time. Your family needs 100% financial security, or the business won’t be worth pursuing. Let the business grow at a reasonable pace and don’t sacrifice your business so you can climb the charts of Inc magazine and win entrepreneur of the year. It isn’t worth it.
Finish your Business Plan. Have you truly taken the time to draft a comprehensive Business Plan? What’s your Marketing and Strategic Plan look like? This is the time while you have a day job!! Don’t rush into an idea because you’re excited. Bridle your passion and channel it into planning and testing and re-visiting your plan until you are confident it’s the best idea and time for you at this stage in your life. One of the best things you may discover in the Business Plan process is that the idea you’re contemplating is a “fail”. That’s ok!! It doesn’t mean you’re a failure, or you’re not going to pursue another business, or you are even giving up on entrepreneurship…it just means THIS particular business isn’t the right move at this time.
Test Your Product or Service. Have you been able to gauge how well your product or service is going to be received by the public or marketplace? I know YOU think it is the best idea next to sliced bread and you’re going to make millions, but are you FOR SURE? Have your market tested your product? If it’s critical you quit your job to launch this business, and there is no way you can start it in the evening or weekends and get it off the ground, don’t quit your job until you can make a calculated estimate on sales and profit based on some sort of empirical data or at least beta test.
Make it too expensive to go to work. Once your business is making enough money that is literally and practically costing you money to leave and go to work and your pay at work doesn’t compensate you adequately when your business loses calculable money EACH day your gone…THEN it may be time to leave the ‘day job’. Stated more specifically, seriously do the math. Make sure your business can afford you and the day job has a tangible and cost that you can calculate. Don’t just quit the day job because it feels like the right thing to do, make sure you run the numbers and then run them again. It’s not worth the risk.
Let me say it one last time in a different manner to drive my point home. You may think your new business and idea needs 100% of your attention and time…however, what your business really needs more than your time is YOUR financial stability. This way you can make rational, careful, long-term decisions and keep your family and support group believing in you and the business while the business germinates and grows. Your financial and emotional support is more important to your business than the time you may be spending at work. Don’t rush, you’ll know when it’s time to leave the day job for that amazing business that’s truly ready for you to clock in every day and give your full attention.
* To sign up for Mark’s weekly Free E-Newsletter and receive his Free E-Book “The Top 10 Best Tax Saving Secrets Everyone Should Know” visit www.markjkohler.com.
Mark J. Kohler is a CPA, Attorney, co-host of the Radio Show “Refresh Your Wealth” and author of the new book “The Business Owner’s Guide to Financial Freedom- What Wall Street isn’t Telling You” and, “The Tax and Legal Playbook- Game Changing Solutions For Your Small Business Questions”. He is also a partner at the law firm Kyler Kohler Ostermiller & Sorensen, LLP and the accounting firm K&E CPAs, LLP.