Maybe it’s the idea of creating a legacy. Or the chance to follow your passion, help others, and become the next Donald Trump (minus the comb-over). Whatever is driving you to become an entrepreneur, how do you know when it’s time to turn that dream into a reality and launch your small business? Or more importantly, should you even do it at all?
As Dave writes in his newest best-selling book, EntreLeadership, there are several factors you should consider before taking that final leap into becoming a full-time business owner, including:
Asking Yourself Why
Question any super-successful business owner about the beginning of their company, and they will tell you countless war stories. It isn’t easy making green. Starting a company usually involves long hours, superhuman efforts and borderline disasters on a daily basis.
Before you make any move, take some time for some deep soul-searching, and ask yourself why you want to open a business. If it’s strictly for the dollars, then count yourself gone. To make it, you have to have a higher calling. You need a burning desire for what you are about to create. “Find something you love doing so much that on the tough days you have a reason to fight on,” Dave says.
Starting Part Time
Now that you’ve decided you can’t live without starting your company, it’s time to jump ship from your current position, right? Not exactly. Unless you have more money in the bank than the Real Housewives of Beverly Hills, start slowly on your venture, meaning part time, and keep your day job while dipping your toes into the entrepreneurial waters to see if your product or service will sell.
Hundreds of well-known entrepreneurs began this way. Billionaire Sara Blakely, founder of Spanx, is a great example. She stayed up nights stuffing orders into padded envelopes until she could afford to launch her company.
Dave recommends coming up with an income goal that is a percentage of your salary, and then work like a crazy person to get there. When you reach it, you can concentrate 100% on your new venture. For example, if you make $75,000 a year, your goal could be to quit when your side business has an annual income of $50,000.
Remember to set the number high enough to be able to take care of your family and not too far away from your present salary. If you currently earn $60,000 a year and your business brings in $5,000 annually, the gap is too wide. Find out how to close the gap between your day job and dream job in Jon Acuff's book Quitter.
“It’s hard to work your day job and spend a ton of hours on your business, but it is harder to make a mistake and lose your home in foreclosure because you jumped before the boat was close enough to dock,” Dave says.
There are some exceptions to this rule, however. If all your extra income is from one client, then stay at your current position until you have a larger customer base. There is always the chance that you may lose that customer and your extra income would drop to zero in a heartbeat.
On the other hand, if your business is steadily growing each month from all your extra work, from $6,000 to $7,000 to $8,000 for example, the decision to leave your current position may come sooner.
Owning your own business can be one of the most thrilling, joyful things you’ll ever accomplish. But no matter how much you want to get started, be wise and wait until the time is right, ensuring that you’ll not only have independence but success, happiness and a future for your family.
To learn more about business, team building and leadership, download our EntreLeadership Podcasts, which include lessons from Dave, plus interviews with key business leaders from across the nation.