Should I Quit My Day Job?
Making the leap from employee to business owner is a big deal. We've all heard the statistics about the number of small business start-ups that fail within the first year. That alone should be enough to convince any would-be business owner to think twice about the consequences of quitting his or her day job. But thinking twice and wondering what happens to a dream deferred are two very different things.
A number of factors need to be considered before starting a small business. Most successful business start-ups are launched by people who already have a certain level of expertise in the field. For example, if you're planning to start a PR firm, your knowledge in the field may be extensive—but finding another PR guru to join would be better. And finding an associate with contacts in the industry will be invaluable during the start-up phase.
Consider the stage of life you are in. If you have kids, are they for you (and potentially your spouse or partner) to dedicate a significant portion of your time to the new business? Just be aware that the demands of small business ownership won't always accommodate your time schedule. And if a spouse does help in your new venture, a "little time here and there" often transforms into more than 30 hours of work each week, regardless of how much time you are able to dedicate to the new business.
The other big advantage you have is that you have been planning toward small business ownership for awhile now, and you have saved a decent amount of cash to get started. Ultimately, $50,000 may not be enough to launch the business and enable you to quit your job, but it's a start.
My advice is to wait until the business gets off the ground before leaving your job. There are still too many variables to determine whether or not the business will be a success. One variable is whether your new company will be able to generate enough business to make up for the $80,000 salary your job now pays. Chances are it won't — at least not during the first couple of years.
You also have to take into account the hidden income you would lose by quitting your job now. You would need to find a way to pay for your own fringe benefits such as health insurance, unemployment insurance and retirement.
You would need to find a way to pay for your own fringe benefits lost by quitting your job now.
Building a productive client base takes time. Since your wife has expertise and time, you can begin building your client base without losing the income from your job, at least during the critical start-up phase.
The time to make the leap will come once your company is established and you have more business than your wife can handle by herself. You can still be involved in the business now, but wait to go full-time until it is financially feasible for you and your business.