Should You Start Your Own Business or Stay in Employment? 3 Important Questions to Ask Yourself
When you reach a crossroads in your career, rushing into a decision is never a good idea. And that certainly applies to working out whether to remain an employee of a business belonging to someone else, or strike out alone as an entrepreneur in your own right.
We can’t decide for you, but what we can do is give you the framework for choosing a path forward that’s right for you. With the answers to the following questions, you should be able to work out what to do.
What are your fixed outgoings, e.g. student loan repayments?
There are all sorts of unavoidable expenses which everyone has to pay each month, such as rent or a mortgage, repayments on loans and credit cards, and so forth.
You should never leave your job unless you’ve looked at these fixed outgoings, established how much income you need to cover them, and determined whether you’ve got sufficient savings set aside to give you time to get your business idea off the ground.
You’ll also need to open a separate bank account to track your spending and record expenses associated with your new venture. Having a SoFi bank account is a way to stay on top of this, and keep your personal finances free from clutter.
Lastly, consider if you’ve got other people depending on your income, and think about how disruption to it might affect them. If your children would be adversely impacted, it’s worth building up more of a financial buffer before you pull the trigger on starting a business.
What are your reasons for quitting?
For a lot of people, starting a business is all about fulfilling a long held ambition and earning extra cash. For others, it’s about escaping from a dead-end role in an organization that they’ve come to resent.
If you fall into the latter category, you need to think carefully about the realities of running a business, and not just focus on the possibility of escaping your current situation.
Should the amount of stress in your job be a factor, it’s unlikely that you’ll reduce this by becoming your own boss.
On the other hand, if the sense of satisfaction you’ll get from taking the reins is enough to outweigh the struggles involved, the ratio of happiness to hard work may tip in favour of creating a company yourself.
Is the timing right?
A good idea for a business isn’t just something that exists in a vacuum. Unless you enter the market at the right moment, and also launch at a point that’s suited to your personal circumstances as well, a potentially game-changing concept can be dead on arrival.
Doing your research will address the first issue, because of course it’s essential to understand current market conditions and have a good sense of how likely it is that you’ll find sufficient demand for your products or services to start gaining traction right away.
For the second issue, you need to be honest about how your domestic and social position will influence your ability to give your new venture the attention it requires.
If your days are already being divided between so many responsibilities that it’s overwhelming, adding another one into the mix won’t improve things.
The bottom line
We want you to know that starting a business is always an option, and that staying in a job that isn’t fulfilling just because of the financial stability it provides shouldn’t always be considered the only choice. However, trying to act too quickly is also unhelpful, since the best businesses are built up slowly over time, and overnight successes are few and far between.