When to Ditch the Job for Your Startup Dream
Q: I have a good position at my current job, but I want to start my own business. Right now, I don't have enough time to focus completely on my idea of starting a business. Should I leave my job to build the business?
A: I too grappled with this conundrum. In 1990, I’d just been promoted to senior manager at professional service firm Price Waterhouse (now PricewaterhouseCoopers). The next promotion would have been to partner in the firm, where I would have made a very good living and enjoyed the prestige of having risen to the top at one of the “Big Four.”
As happens in life, a former colleague approached me to ask whether I wanted to join the founding group of a new company called SkyMall. At the time, I felt that didn't have much to lose. I was single, without responsibility to others and young enough that if SkyMall failed financially or if I’d discovered that entrepreneurship wasn’t for me, I could have found work elsewhere. Yet, I had long wanted to test myself in a startup, having known I could perform within an established corporate environment.
Before making the decision to leave, however, I did some research. I examined all aspects of the business and had long discussions with my prospective partners.
Though I obviously made the leap and it proved a smart idea, it's hard to say what every entrepreneur should do in a similar situation. There’s simply no one-size-fits-all approach to when to quit a day job to work full time on a startup.
Still, answering the following questions may give you a better idea:
1. Will you have time to focus on both your job and your start-up?
If your instincts say no, you are probably correct. Trying to tackle a startup on a part-time basis greatly diminishes your chances of succeeding, especially if you’re going to require outside equity financing to start or grow the business. Most prospective investors will require you to devote more than full time to the venture and aren't likely to fund someone doing it part time. The rationale is, if you don’t think enough of your idea and your skills to risk a full-time commitment to the opportunity, then why should an investor risk giving you capital?
2. Do you have a strong business plan?
In my last ASK the Expert column ("So Many Business Ideas, Not Enough Time?"), I laid out the steps entrepreneurs should take in deciding what business ideas they should focus on. Your startup should pass that same stress test, and the best way to do this is putting together a business plan.
The plan should take an objective approach to your startup and examine the pros and cons of the venture, while also addressing issues that surround converting your idea into a growing and financially-successful business. By doing this exercise, you will be able to make an informed decision as to whether the timing is right for your idea.
3. Are you willing to make sacrifices in your personal life?
Personal relationships are difficult to maintain during the stressful-startup phase, so it’s worth considering what kind of impact they can withstand. For example, it’s critical that your husband, wife or partner be supportive of the risk, long hours, stress, financial pressure and uncertainly that come with starting a business. Any of these factors can undo the strongest of unions, and it’s a good bet you’ll be wrestling with them all simultaneously. Both you and your partner need to go into entrepreneurship with your eyes open and your feet planted squarely in the reality that starting and operating a company may cause tension.
For me, jumping into entrepreneurship was the right decision at the right time in my life, and I’ve never looked back. I hope you’ll fare even better when the time is right for you.
Have a question for YE’s experts? Submit your questions in the comments section below and those with the most likes from other readers will be answered. On Twitter, use the hashtag #YEask. Include your first and last name, your location (city and state) and the name of your business.