One of the big decisions every aspiring entrepreneur has to make is when to quit your current job to devote yourself fulltime to your new startup. Some of you are so committed to the new passion that you quit your day job early, and dedicate all your time and resources to the new venture. Others wait until the new business starts to generate revenue and profit before making the move.
Which is right? I’m definitely a proponent of the multitasked approach, since every new venture is inherently risky, and startups usually take longer to ramp up than you imagine. In my experience as a startup advisor, I find the minimum time to revenue is at least a year. Break-even and profit may not happen for a couple of years after that. And investors are hard to find in these years.
On the other hand, many investors, including billionaire entrepreneur and “Shark Tank” co-host Mark Cuban, essentially demand an all-in early approach as a pre-requisite to funding, making it clear that a total commitment is expected if you want outside money. Of course, you might be able to pay yourself a salary from the investment, but this will be minimal and critically watched.
While there is no right or wrong here, I believe there are some good arguments for not quitting your day job too soon. Here are some of the key ones I would suggest to every aspiring entrepreneur who doesn’t have a rich uncle, or isn’t sitting on a large nest egg:
Make sure this new lifestyle is really for you. I hear from aspiring entrepreneurs all the time who can’t wait to ditch the corporate lifestyle, make all their own decisions, and be in control of their destiny. Later, half of these come back to admit that their day job was not all that bad, less stressful, the work predictable, with others to lean on for hard decisions.
Current job income keeps family and creditors satisfied. The alternative of living off credit cards and borrowed money, while waiting and hoping for your startup to kick in, will drag down your motivation and kill your support system just when you need it most. Even the most successful startups can’t sustain founder salaries for the first couple of years.
Multitasking is the norm for everyone these days. With all the pushes and pulls on our lives already, adding a new startup effort as one more activity should not be seen by anyone as breaking the bank. The challenge is to keep all your priorities, personal and business, in balance. Anyone running their own business needs to learn that anyway.
Starting a company fulltime is stressful and lonely. Having another job is a good way to get the balance you need for visible accomplishments, interactions with other people, and certainly a regular paycheck. Of course, you must not short your day job, so you need the passion of your new idea to keep you energized enough to excel in both.
Keep your startup efforts “below the radar” until proven. No matter how much passion you feel for your idea, not all friends and family will be positive or accepting of the major risks and commitment involved. By maintaining your startup activities as supplementary with future payback, your efforts will look visionary rather than perilous.
Be able to learn from failure without embarrassment. Historical and current statistics still show the chances of failure on any given idea are better than even. Even with all the help resources available to entrepreneurs, there is still no better way to learn than trying an experiment that doesn’t work. Working in parallel minimizes the pain and visibility.
In my view, entrepreneurship is an endurance sport that you have to train for, rather than a quick dash to success. It pays to be able to fall back into a familiar mental role to recover, when the pressures of fund raising, new product development, and satisfying initial customers wears you down. Once those challenges start to seem like fun, you can jump full time to entrepreneurship.
I recognize that all aspiring entrepreneurs are unique, with different levels of risk tolerance, energy, and motivation. I do find that the entrepreneur lifestyle is more fulfilling for many than traditional business. Thus I encourage everyone to ignore the pundits and take a hard look at your own goals and drivers, and proceed with caution. Your happiness and legacy depend on it.
*** First published on Inc.com on 09/11/2018 ***