Should One Leave His Current Job and Start a Startup?
From the comfort of a regular pay cheque working in a company to leaving everything and leaping into the uncertainty of entrepreneurship - Making this leap is rarely easy
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Relative to established organizations, start-ups can be hard to figure out. What are the jobs to be done or, the best entry points or, how can one tell whether a company has the potential for success and is the right fit? Start-ups have no clear hierarchies or paths to advancement. But from their embryonic stages through more-mature ones, they need good stakeholders to create and effectively run them. And one can accrue numerous personal and professional rewards building such young organizations. Start-ups represent giant experiments. Every initiative is new. Before trying to dive into any such experiments one should be able to clearly figure out the following.
Knowing Exactly How Much Money One Needs to Afford for Daily Expenses
Most truly do not know how much money is spent each month. Tracking the spending behaviour can be an eye-opener. What's more, knowing exactly where the money goes each month, including bills and any ongoing debts that must be covered is the best way to understand if one has the financial means to quit the job and where he or she should make cuts if necessary.
Looking for ways one can cut back in order to make quitting the job a reality, then figuring out what can save each month. One should also start saving long before quitting the job.
Finding Ways to Make Money After Cashing the Last Paycheck
Just because one has saved three to six months' worth of income doesn't mean he or she should chill for three to six months before generating new income. One can add to the savings without making a huge commitment by doing things part-time jobs that would bring regular income and sustain cash flow during the planning and launching phase. If all else ways fail and one is running short of cash, he or she should not forget to lean on their support system, whether it's a relative or close friend. Rather than taking any job to make ends meet, taking extra time to truly find one's passion and staying with someone who'll have their back for a few months, is more of a matured decision. The person can include a financial component to make the situation more comfortable and it doesn't have to include just paying rent. If the person is a good cook, he or she could make dinner a few nights a week, for example, or contribute in other ways. As long as everyone has their space and autonomy, the adult family relationship can be extremely positive.
Expecting the Unexpected
Stuff happens. Maybe medical emergencies or unexpected tragedies, without a steady income, it's harder to absorb unexpected costs in addition to the basic living expenses. That's where an emergency fund comes into play. In addition to one's savings for the daily expense to survive during the startup building phase, it's wise to have a separate fund dedicated to emergencies only. Creating separate accounts can help one focus on your goal and get there faster. An emergency fund should have another three to six months' worth of living expenses in it.
Saving up, Have a side hustle, and Quitting, when the timing is perfect. No one can then knock for being reckless. Choosing to keep the day job and starting one's startup on the side is a solidly sensible approach. One'll be able to build upon the savings, one won't be without income and will be able to chip away at the process of starting the startup in stages. It's less risky and makes for a much smoother transition when the time is right.
That being said, the slow and steady approach (while sometimes realistically the best option) isn't without flaws. The major downside of having new startup function first as a "side hustle" is that one will have limited time and energy to devote to it.
How one chooses to proceed depends on so many unique factors as a position in life, the state of finances, industry, personality type, relationships and family needs, and so many other facets of one's life will all come into play when it comes to making this decision. It's also possible to combine the two; maybe this looks like keeping the day job for a short period of time while one builds up a financial cushion, strategizing the business plan, doing initial market research, and generating some initial buzz on social media sites. They can still save the heavy lifting for once they've quit the day job, but maybe it doesn't need to be such an abrupt transition.