Ready to Go Full Time With Your Side Gig? Consider These 8 Factors First.
Entrepreneurs on the cusp of a new business venture have a difficult choice to make -- deciding when to leave their current steady career and go full-time with their own entrepreneurial endeavor. Move too soon, and you may not have a leg to stand on before your new business has a chance to really take off. Move too late, and you may miss some key opportunities that could have catapulted your early-stage side business to the next level.
As the CEO and co-founder of SoapBox Soaps, I had to make the decision as to when I would give up my full-time career and pursue my startup full-time, which ended up being one of the best decisions I’ve ever made. Below, I’ve shared my tips, tricks and pain points along the way to help you decide if it’s time to go full-time with your own side gig.
1. Financial stability is paramount.
One of the most important benchmarks you should wait for before going full-time with your startup is financial stability. Startups take the biggest hit in equity when raising capital in the early stages -- it’s the most expensive form of money you could have. Waiting until you can financially support yourself through either the company’s revenue or when your proof of concept is enough to justify an investment that can carry your salary makes all the difference between a successful startup story and a failed one.
2. Know when to approach investors.
One of the biggest misconceptions entrepreneurs have when launching their startup is the idea that they have to immediately procure investors before actually testing their concept. This is the exact opposite of what they should be doing. Investors want to see a solid proof of concept and promising data that supports your reasons for creating your startup.
While still employed at their careers, entrepreneurs should simultaneously launch and manage their startup so that when the time comes to corral quality investors, they’re already waiting on your doorstep.
3. Have passion, passion, passion.
If you truly love something, and are committed to seeing it through, it won’t matter how many late nights you put in or how many frozen dinners you eat along the way -- you’ll make it work. If you’re passionate about your startup, you’re going to inevitably find opportunities around your full-time job to create your proof of concept.
If, however, you find yourself making excuses early on about how you’d be more devoted to your startup if only you could manage it full-time, you should probably reassess your commitment to your startup in the first place.
4. Start with proof of concept.
The quickest way to kill any startup before it has the chance to be successful is by jumping to it full-time before you have a proof of concept (POC) in place. Your POC allows you to test out your idea in a controlled environment, solicit feedback from those you trust and adjust the product or business plan accordingly based on any flaws you came across throughout the process.
Knowing how your product or service will bolster business goals is one of the main criteria investors look for when choosing a startup to invest in, so having a well thought out POC is key to bringing them on board and ensuring the longevity of your new company.
5. Be the best in your niche.
If you can’t afford to offer something compelling in your niche, then it isn’t time to launch your product or service. In my case, I had to learn everything there was to know about making soap. And not just any soap but one that contained only all-natural ingredients and was beneficial to the consumer.
I knew that regardless of my business plan, if I didn’t have an actual bar of soap that people would want to buy, all of my planning was for naught. Waiting until you have a compelling enough beta version of your idea can save you a lot of time and money. Do not wait for perfection, because it will never come, but ensure that your first step into the marketplace has the legs to carry itself to your next milestone.
6. Co-founders are priceless.
Having a co-founder is a surefire way to extend the time you need before jumping into your startup full-time. Having a co-founder is a smart idea overall due to the statistics showing the success rates versus starting a business on your own.
Finding someone who is humble enough to know that you complement their weaknesses and vice versa lends itself to a smoother ride throughout the startup process. It also means that there are two revenue streams that are helping to keep your startup afloat during its early stages, and that’s something that definitely shouldn’t be undervalued.
7. Why you need cash flow.
When starting your business, be sure to have a readily available cash flow, as investors don’t want to pay your salary. Instead, they want to know that their money is going toward marketing or development, as these are things that help catapult a business to the next level.
Investors don’t want to feel like their money is just being transferred from their pocket to yours and are weary to invest in lavish salaries. They’d rather that entrepreneurs run lean for a while and demonstrate that the greatest form of compensation is equity. That shows that as an entrepreneur, you believe in your business enough to prove that you can turn their investment into something more, not merely use it to stay afloat.
I understand how this can be hard for some people to pull off due to their financial situations, but investors are cautious of salary-first reasons for raising investment.
8. Your partner is your lifeline.
Whether it’s your husband, wife, boyfriend, girlfriend or best friend, having a supportive partner makes all the difference when choosing to go full-time with your startup. Having the support of someone who understands the gigantic risks you are about to embark on will give you more confidence to take those risks instead of shying away from them.
While many partners are undoubtedly ready to ride all of the highs that may come from starting your own business, they should also be equally as ready to ride the lows as well. Finding someone who understands both the risks and the rewards of the entrepreneurial lifestyle will make it easier for you to transition from your current career to your startup.
Knowing when to leave your current career to pursue your startup full-time is a daunting decision -- and one that shouldn’t be made lightly. While there is no exact moment of departure that is applicable to every scenario, being true to yourself and your ideas is a great place to start.
Obtaining financial stability, developing a thorough proof of concept and seeking out colleagues and life partners who will supplement and support your endeavors are some of the benchmarks that, once met, are great indicators that it’s time for you to leave your current career and pursue your passion.
Becoming an entrepreneur is one off the best decisions I’ve made in my life, but I was an entrepreneur long before I jumped in full-time. Being careful with the leap of faith can create a stable foundation for rapid success.