Also, starting a business is going to take longer than you think, so padding this number is pretty important. Unforeseen expenses always creep up, and you don’t want to find yourself in a position where you can’t cover an unexpected bill or emergency expense. Use that number (along with your calculation of your necessary living expenses) to determine how much additional cash you need saved up to sustain yourself while you’re not bringing in income. How long will it take you to break even? Is it 12 months after you open? Maybe 24, or more? It’ll be necessary here to do some type of financial forecast, or perhaps a business plan (we recommend a Lean Plan). Once you have a sense of the first two points, compare them against the last point on that list. How much money you currently need to, you know, keep living.How long until you’re able to break even and actually make money.How much startup capital you need to open your doors (whether real or virtual) and begin selling your product or offering your services.You’ll need money to keep the lights on-not just in your new business, but at home, too.īefore you proceed, get as realistic a sense as possible of these three things: It’s not just about making sure you have enough money to start your business. So, the obvious question-what’s your financial situation?
So, if you think this is the right choice for you, let’s look at some of the questions you should be asking yourself: Do I have any savings? What about investments? Can I get a loan?
Plus, unless you have a substantial financial cushion to fall back on, you’ll likely have a bit of urgency to spur you toward success. You’ll also be doing what you love, and that alone is an important consideration. You’ll have the luxury of time and energy, and you’ll be able to throw yourself wholeheartedly into your new venture. That being said, there are huge advantages to quitting your day job and starting your new business right away. That’s all great-but, the reality is that quitting your day job cold turkey to start a new business is definitely the riskiest path available. You have a plan, a passion, and you’re ready to do whatever it takes to make it happen.
See Also: Bplans Quiz: Are You Entrepreneur Material? So, you want to… …quit your job and start your new business right away:
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