That last topic is one that is likely of interest to many people who currently hold “day jobs,” but have an interest in building their own businesses. They may be putting in the usual 40 hours a week at the regular job, while working on the “side business” in the evenings and weekends. However, they’re not quite so sure as to when they should quit their day jobs and tackle the world of entrepreneurship full-time. This post is for them.
What questions should you be asking yourself?
1. Have You Saved a Nest Egg?
You might have read my post about how I got started with freelance writing. It started with a single gig with a single client. From there, I was able to build up valuable experience, make new connections, and take on more clients. However, I was far from replacing my full-time income right away.
As such, unless you want to find yourself in a lot of debt, it would be in your best interest to have a reasonably-sized nest egg saved up for those rainy days. The early days of freelancing will be a struggle, so you need those savings to sustain you. I’d recommend you have at least six to twelve months’ worth of regular income in your piggy bank.
2. What Is Your Living Situation?
Question number one comes with a caveat, since it really depends on your living situation. I got my start with freelancing not that long after graduating from university. Since I was still living at home, my living expenses were relatively minor. That helped to make the transition to freelancing a lot easier.
Before you all go moving back in with your parents, another arrangement would be if you had a supportive partner who does have a reliable and steady source of income. If this partner is making enough to “weather the storm,” as it were, then it will also be easier for you to take that plunge.
It may not be appropriate to ask for the financial support of family and friends, but I’ll leave that to your own discretion.
3. What Is Your Minimum Level of Sustainable Income?
If you are waiting for your part-time freelancing income (or the income you’re deriving from whatever your side business may be) to be enough to eclipse the regular paycheque you’re receiving from your day job, you could be waiting a very long time. Even so, that’s the benchmark that many people use.
The fact of the matter is that your part-time side business will have a very hard time getting to that level until you are willing to commit to it full-time. It can happen, but greater dedication (and hours logged) certainly helps it along.
That’s why it’s perhaps more appropriate to ask about your minimum desired income. This could mean cutting back on many luxuries and expenses, but when your part-time side business is generating close to this minimum level, you can feel more confident in taking that leap of faith. As your business grows, thanks to the added time you now have to dedicate to it, you’ll make more money too.
4. Do You Have a Plan B? An Exit Strategy?
Let’s face it. Freelancing isn’t for everyone. Maybe you can’t stand the relative isolation from working from home. Maybe you’ll struggle to earn enough money in this economy.
Whatever the case, you’ll want to have a plan B in place, just in case that the full-time freelance career doesn’t take off the way you had hoped. Given the current job market, getting your old position back at your old company could be next to impossible. You really need to weigh these risks before taking that big step into full-time freelancing.
Myself, I’m glad I took that leap of faith. I have my share of lows, to be sure, but running my own business has been a richly rewarding experience and one that has really shaped me into who I am today.