Why You Shouldn’t Quit Your 9-5 Just Yet to Start a Business
The idea of starting a business seems attractive to many people. Most people just want to get rich without realizing the amount of time and effort that is involved. They think that they can become a successful entrepreneur in just a few months. Therefore, they leave their traditional job to follow their dream of becoming an entrepreneur. However, the truth is far from this perception.
Starting a business is not an easy task, as the journey has many risks. Quitting your 9-5 job can only reduce your chances of establishing a thriving business. So, avoid quitting your job if you want to establish a company or start a business.
Here are a few reasons why you shouldn’t leave your job just yet to start a new business.
You’re leaving the Security of a Job
While a 9-5 job seems monotonous and tiring, it is more secure. Your exhausting job offers a steady stream of income on a fixed date every month. Hence, you don’t have to worry about inflation or any type of loss like you do in business. With the uncertainty of payment out of the way, you don’t have to worry about how you will pay for your monthly expenses like energy bills, groceries, or other necessities. But if you leave a job to start a business, you will not have any financial security and will rely completely on the money you saved.
Also, when you have a job, you can take more risks in your business. You can make strong decisions and changes in the business without worrying about how you will meet your expenses. So, having a job when you start a business will act as support that saves you from falling and helps you get up whenever you face troubles in your journey.
You Don’t Have a Plan
Let’s face it, motivation and dedication is never enough to start a business. You need a strong, reliable, and long-term plan to make your business work. You need to consider what type of business you start, what products you will sell, and if those products can generate enough revenue in the short and long term. You also have to do market research to understand how much you need to invest and when you can expect to get a return on said investment.
Furthermore, not every plan offers you the results you want. Some might fail to take off or they might eventually fail in a few months. So, it’s better to create a plan while considering all the possible risks and problems you might face. Having a backup plan can also save you when your business is drowning.
You Don’t Have Emergency Funds
If you have the opportunity to live with your parents without having to pay any bills, you are certainly lucky. But if you have a family to support or live alone, you need to keep an emergency fund that can last you at least six months. These funds are important, even if you don’t plan on starting a business anytime soon. But, in case things go south, emergency funds are a great backup.
If you want to leave your job, you at least need to have enough money to pay off daily expenses for six months. Use them whenever you need to, while focusing on your dream business. Another reason to have an emergency fund is that working hard to achieve your goals becomes very challenging when you are constantly stressed. Your entire focus will shift towards how to pay bills or what to eat instead of working on your business.
To make the right decisions, you need to be in the right state of mind, which can only happen when you don’t have problems to worry about. Therefore, before leaving your job, start saving enough money to help you pay all your bills for the next six months.
You Don’t Have Funds to Invest in Your Business
Have you decided how you will fund your business venture? If you’re planning to get venture capital fundraising (VC) or angel investors, you need to find an alternative. Getting funding from investors is challenging unless your business idea is something truly groundbreaking. Investors dig through business ideas looking for even the slightest risk or problem that can bring the company down. They will also come up with a long list of requirements. Therefore, many people choose to pay for their business from their pocket. Some also take help from families and friends, while others can sometimes take loans from a bank.
Regardless of what method you choose to finance your business, you need to consider how you will pay it all back if your business fails. If you quit your job, don’t have enough savings, and have no side income, you could go bankrupt. The best and most effective way to fund your business is to use your income.
By using your income, you don’t have to take on risky debt, or worry about returning money with interest. To follow this strategy, you need to cut down your personal expenses and track your expenses. Use the money you saved to invest in your business. Through this strategy, your business might take more time to grow, but it will be much safer.
You can Grow Your Business without Quitting
In some cases, it’s important to quit your job before you pursue a totally new career. These are the opportunities where you can’t flourish without putting in a lot of time and effort. You need to stay involved in the business 24/7, which can’t happen if you also have a job. In this case, save up for an emergency fund for a safety net and save up money for investment. After that, you can quit and establish the business you want.
But it’s not always the case. Some businesses can go side by side with your job. You can work in the morning for your employer and allocate your evening time for the business. This way, your business can thrive without forcing you to quit your job. Also, you will always have a chance to leave your business if you struggle to stabilize it and get back to your job.
You are Quitting to Get a Bigger Paycheck
If you’re only leaving your job to get a bigger paycheck, it’s not the best idea. Before planning to quit your job, you need to consider a lot more than how much your current job pays. Experts suggest that money should not be the only criteria for quitting a job. You could lose your social life, mental peace, and financial stability. People who are planning to start a business need to create a list of things, which they can compromise on. This will help you understand that you will lose more than just money.
Also, running towards a bigger paycheck or higher monthly income might lead to you losing everything you already have. Note that there is a higher risk of failing when you start a business. In the United States,
20% of startups fail in the first year, 50% in their first five years, and 65% within ten years. So, despite having a successful and reliable plan, significant investments, and expert support, your business can fail without giving you an opportunity to earn greater profits.
Bottom Line
So, don’t wait for your job. Make an impactful plan, think about how to gather investors, and gather emergency funds. If you are struggling to save money to finance your business, you can use strategies and ways that can help you save significant money in less time. For instance,
Betterment helps you turn your everyday investment into something so much bigger.
