So you finally have started that part time business and you feel like you are making a good enough profit to quit your day job. You have crunched the numbers, and feel like you can make it work. It is the American dream for us to pursue working for ourselves, and it certainly can be a reality if we do it right. With that said, how do we know if it is time to quit our day job and dedicate ourselves to our small business? Start by asking yourself the following questions:
1. If my business goes under, will I have enough of a savings to survive until I get another job? This is one of the more prudent questions to ask before quitting your day job. Your small business may be making an outstanding profit right now, but what if the bottom drops out? Are you in position to make it?
2. Am I making two times the amount of profit that I am making in my current job? This one is different depending on who you ask, but it is still valid. If you are clearing 30k per year in your current job, and you are also clearing 30k in your business, this is not the time to quit your day job. The reason? Because 30k with a job is not the same as 30k in a small business. The safety net financially is too small. Wait until you are doubling your current salary.
3. Is my business becoming so profitable and busy that I have too little time to keep up? This is not a guarantee that you need to quit your day job, but it certainly is a start. If you are doing so much business that you find yourself turning away work, then chances are you are getting very close to quitting that day job.
4. How does my family feel about me quitting my day job? Your spouse, children, and extended family are all a part of your life, and should be included in these types of decisions. Do not forget that, or you will be flying solo rather quickly in your business venture.
5. What will I do for health insurance? Even if you are willing to give up the vacation, sick pay, and basic benefits that a job can give, are you willing to give up that healthcare insurance? Understand that buying it for yourself is expensive, and figure that cost of insurance into the decision and profits.
6. Will I be happier if I quit my day job? This is one of those questions that is kind of tough to answer unless you do it, because the grass is always greener on the other side. Still, it is a question you should consider carefully before jumping ship.
Quitting your day job is a scary experience for the small business owner for many reasons. One of the primary reasons is because it means that you are committing yourself to this business idea rather than dabbling in it. Once you have quit that job and dedicated yourself to being a small business owner, then the gloves are off. Make sure you consider it carefully, and only quit when you can answer each of these questions clearly.
