Published On: Fri, Jan 31st, 2014

Read This Before You Quit Your Day Job

Tired of being overworked and underpaid? Ready to do your own thing?

Well, you aren’t alone. I speak to people every week who say they want to take the plunge into converting their dreams, thoughts and ideas into reality. But, not so fast! Before you jump off the diving board to start your own business, by quitting your day job, here are a few tips you should consider.

1. Start Where You Are.

If you already have a full time job, it’s a little difficult to just dive into a new business venture. You have to create a written plan which includes the exit strategy from your current position, as well as, details your transition into the new opportunity.

While you’re working on that plan, get into the “hustle while you work” mentality. What does that mean? Well, as my friend Hotep, author of the book, Hustle While You Work states, it’s about getting on your grind even while you have your full-time job. When I met Hotep a few years ago, he had written several books, filmed DVDs, traveled across the country speaking and was training other entrepreneurs to do the same, all while being a full-time elementary school teacher.

No one is trying to kill your dreams here, but is it possible that you can use your 9-to-5 to jumpstart your 5-to-9? Ask yourself a few key questions:  Can my full-time job help me fund the foundation of my business? Can I gain connections or credibility in this position I wouldn’t otherwise have access to? Are the hours honestly flexible enough for me to manage my business around my job? How much would it cost to pay for my own benefits, i.e. health insurance, retirement funding, etc.

Once you get real with yourself, you may find that it makes sense to stay on the job a little longer.  Don’t let an overbearing boss or irritating co-workers force you out before you’re ready.

Don’t try to pull this

2. Test it out.

You might have the best idea in the world but if people are not willing to pay for it then you don’t really have anything. You have to understand supply and demand. Before you just leave your job to pursue something you think will be a hit, make sure that you’re producing a steady stream of income from that business. Do the work to create a clientele that is waiting and wishing you had the time to offer them more.  If people (NOT your friends and family!) love the product or service you’re providing even with your limited amount of time, then you might really be on to something!

3. Build adequate savings.

Get your money together and know that you’re wearing your financial life jacket when you take the plunge. After all, one lesson you may as well learn early is that entrepreneurship isn’t easy nor is it always consistent. You may have those months, and in this economy some have experienced those years, where the income fluctuates drastically. You must prepare yourself for those downturns.

But, what does having adequate savings look like? Some suggest six months of expenses, but I prefer six months of your current income.  No matter what happens, you need to have enough money to cover your personal expenses and buy yourself time to really focus on growing the business.

For those who already have consistent income from your side business, save at least six months of the difference between your salary and your side biz income. This way, if business doesn’t grow immediately, you can chip away at those savings to help supplement your income.

(NOTE: Nothing I’ve said thus far should take away from the money you’re already saving for continuous investment into the business. The only thing we’ve mentioned here is making sure your personal monthly expenses will be covered before you leave your full-time gig. If you confuse the two, you’ll be deciding between your personal utilities and paying your employees. . .  Happens every day.)

I truly believe that we were all born as the answer to someone’s problem. But no matter how gifted you are, you have to build a solid foundation before you jump out there with no plan, no experience and most importantly, no money.

Patrice Washington
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About the Author

- Patrice C. Washington has been making money fun since 2003 as a nationally recognized personal finance columnist, television commentator, radio host, speaker and leading authority on personal finance, entrepreneurship and success for women and youth. She's also the best-selling author of Real Money Answers for Every Woman: How to Win the Money Game With or Without a Man.

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  1. Taylor says:

    I’m so ready to take the leap I can taste it! You brought up some really good points. Seeing your day job as means to raise capital for your hustle is a great motivator.

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Did you know?

African Americans are significantly more likely to have some type of debt (94%) compared with the general population (82%). Credit card debt, student loan debt, and personal loans are all significantly higher in the African American community.

Source: Prudential’s 2013 "African American Financial Experience" study