Every entrepreneur has had that moment; they suddenly realize they have a perfect idea for the business that’s going to make them a millionaire. If they’re working a day job, the urge is to immediately go to the boss and drop their badge (or keys, or access card, or whatever) on their boss’s desk and head straight home to start working. But is quitting without a business plan a good idea? Here are some things to consider.
How’re your savings?
If you’re living from paycheck to paycheck, you may not be in a place to take the risk of your brilliant business idea not immediately being lucrative. You are likely to need the security of your day job while you get all the pieces in place to hit the ground running with your business.
Your goal: reduce your personal debt as much as possible so that your living expenses will be lower when you finally do leave and kick off that business plan.
However, if you have padding in the bank to tide you over while you get things started, or if you have a supportive spouse who looks at your business idea as a passion project that you can afford to investigate, you may be in a better situation to leave work and get started immediately.
Your goal: ride the enthusiasm! Get going while you’re excited and get as much work done as possible before the initial rush wears off.
How time sensitive is your idea?
Do you see an opportunity to bring a tried and true concept to a currently underserved market? Perhaps you see the perfect location for a franchise, or you have evidence that an audience segment is ready to buy as soon as the product is available. Move now!
Your goal: Get there before anyone else does, but moderate your risks; don’t leave yourself without backup options.
Or perhaps your realization has more to do with a way to monetize a skill you already have, or are developing. A new concept for a blog, for example, or a love for photography that you can turn into a small business. These are skills that aren’t going out of fashion any time soon; you’ll serve yourself well by building your entrepreneurial skills, contacts, and reputation in your after-work hours while you continue to work at your day job.
Your goal: Give yourself a solid foundation and grounding in the field while you continue to reduce debt and save money for the days where your skills are supporting you.
What investment is required?
If you see a franchise investment opportunity that your community desperately needs, you may need a large financial investment to get the business off the ground. If you want to open a retail location, or start a business as a sales consultant for a business, there is often a set amount you need to invest in inventory and initial product.
Your goal: Make sure that you either have that investment available, or that you have sufficient credit to get the finances together before you quit your job. Remember: banks tend to loan money to people who don’t need it; if you’re just starting out, looking into alternative funding or small business grants may benefit you.
Are you looking to sell your skills, as a writer, graphic designer, or video editor, for example? You may have all the equipment you already need. With the proliferation of websites that help freelancers connect with clients, an Internet connection and a computer may be all you need to get your business up and running.
Your goal: realistically assess what you have and what you need. Again, if you already have everything you need to start working in your off hours and build your reputation, this may be a better decision.
So, should I quit my day job to pursue my brilliant business idea?
There’s no hard and fast answer. In general, if you can afford to pursue your business concept while you continue to receive the benefits of a 9-5 job (insurance, 401k, and stability, to name just a few) it’s a better idea than walking away from all of that just because you’re sure that your business is going to make you a fortune. After all, there is no such thing as a sure thing in the world of entrepreneurship.
But if you’re sure that this is the right time, and the right place, and you have the necessary funds both to start your business and support yourself through the opening phases without going deep into debt – then why not give it a shot? You just might surprise yourself by seizing the moment and striking out on your own.