It’s intoxicating, isn’t it?
Your dream of entrepreneurial freedom.
Every spare moment is consumed by your up-and-coming business as you toil, plot and plan.
It’s been a side-gig until now because you’re still tethered to your day job. But you can’t wait to march into your boss’s office and plonk your resignation letter on his desk.
You’re unsure now is the right time, though. What if you’re not ready? What if you take the leap and land in financial ruin? What if your business is a laughable failure and you wind up counting your pennies for your next meal and begging for work to keep the lights on?
Oh crap! Feels risky, right?
It doesn’t have to be. Because you can take precautions. You can minimize the risks. And you can make sure the time is right.
The 4 Big Risks of Quitting Your Job to Work for Yourself
Staying in a job you hate will condemn you to misery, right? But what if quitting winds up making you even more miserable? In truth, it’s a possibility many people ignore. Because leaving the security that comes from a steady job with a steady income means, in the early days, you’re as vulnerable as a tiny boat in an angry sea.
Here are the four biggest risks you face when quitting your job — especially if you quit too soon.
Risk #1: Your Business Fails and Now You’re Unemployed
Most new businesses fail within the first five years. And you’d be naïve to think it couldn’t happen to yours. So be smart and watch the horizon with vigilance in case your brilliant idea isn’t quite as brilliant as you think it is.
Financial momentum can be hard to maintain. Then bills mount up, your bank balance starts to redline, and you’re forced to look for a new job to make ends meet. Ouch.
Risk #2: You Face a Financial Crisis and Can’t Make Ends Meet
Even if your business is booming, that doesn’t mean you’re financially safe. You could lose a major client, wind up too sick to work or get sidelined by a horrid life event.
And let’s face it, if your income dries up you’ll sink pretty damn fast. You’ve got to be financially responsible to survive in the entrepreneurial world. It’s not sexy, yet it’s undeniably essential.
Risk #3: You Discover You Don’t Have What it Takes
Working for yourself ain’t easy. And the fact is that not everybody has the discipline and tenacity to see it through.
The freedom of being your own boss, working in your PJs and avoiding long torturous meetings is enticing. But it’s this very attraction that lures people who aren’t always cut out for it.
The truth is that many people suck at being their own boss. Many people underestimate how much hard work it is. And many people start to endlessly procrastinate when they no longer have a boss breathing down their neck.
Risk #4: You Hate Self-Employment as Much as (or More Than) Your Day Job
Just like a sparkly new love affair, it’s easy to fall head over heels with your new business idea.
In the early days, the little annoyances seem insignificant. Then, fast forward three months and you’re sitting in your home office, feeling isolated from the world, stressed out over disappearing clients, and you realize the honeymoon is over. Misery engulfs you as your new reality is a far cry from what you expected it to be. Maybe self-employment wasn’t the answer to the problem you had with your job after all.
8 Boxes You Must Tick Before Leaving Your Safe, Cozy Job
Now you know the risks that come with quitting your job to work for yourself. And let’s be real — you’ll never eliminate those risks completely.
But if you tick the following eight boxes, you’ll know you’ve taken proper precautions to minimize the risks. You’ll know the time is as right as it’ll ever be to send that resignation letter. And you can feel confident you’ll land on your feet when you do.
#1. You Know How Much Money You Need to Survive Each Month
First, if you want to stay financially safe, you must calculate how much money you need each month to keep your head above water.
So, for one or two months, track all your expenses, and when you’re done, divide them into two columns: essentials (food, rent, utilities, debt payments, etc.) and luxuries (Netflix subscriptions, nights out, etc.).
The sum of your essential expenses makes up your survival budget — the minimum amount you need to survive each month without running into serious trouble.
Then, from the luxuries column, pick three expenses (at most) that you feel you can’t live without. Give yourself some financial wiggle room to accommodate these from time to time, to keep yourself from growing resentful. (It’s difficult to remain motivated when you can’t indulge from time to time.)
Let’s call this your minimum income goal — the minimum amount you need to live in relative comfort every month. This will decide whether you can tick the next box.
#2. You’ve Earned Enough Side-Income to Cover Monthly Expenses for Five Months Straight
Now, once your side income meets your minimum income goal, you may be tempted to send your resignation letter straight away. But hold on…
If you want to be careful, you shouldn’t celebrate too soon. Meeting your goal one month doesn’t mean you’ll meet it again the month after, or the one after that. It may just mean you had a good month.
But if you’ve earned a consistent side income for five months straight, you can feel confident you can keep it up once you quit your job (especially since you’ll have more time on your hands).
#3. You Have a Financial Life Raft That Will Sustain You for at Least Six Months
Next, you’ll need a fully stocked hardship fund. Working for yourself means you carry all the risk on your shoulders — which is exciting and terrifying at the same time.
What if your website faces a huge drop in rankings due to a Google algorithm change? What if Facebook changes its ad policies which severely limits your reach? What if you throw your back out and can’t get any work done while you heal?
To avoid a crushing financial crisis, you’ll need to save up enough money to cover your essential expenses for six months minimum. It’s the smart entrepreneur’s contingency fund that’ll give you the time you’ll need to get back on your feet or, if necessary, find a new job.
#4. You’ve Had Your Side Gig for at Least Six Months, and It Still Excites You
You’re going to spend day and night with your business, so it’s got to be the thing that gets you out of bed, not the thing that sends you diving back under the covers. True entrepreneurs live and breathe their business — by choice. It never fully leaves their mind, even on days off.
If you haven’t spent time working on something every day, you won’t know if you’ll enjoy it.
But if you’ve already worked on it for six months alongside your day job, and you still feel that ping of excitement, you’ll know it’s what you truly want. On top of that, you’ll also prove to yourself you have the self-discipline to succeed.
#5. You’ve Written down Your Short- and Long-Term Goals
Ever worked hard all day and not achieved a thing? Bumbling about with no clear direction is a recipe for fast and definitive failure.
To stay focused and moving in the right direction, it’s essential to have two types of goals. A short-term goal you’re 100% confident you can achieve. And a long-term, slightly audacious big picture goal.
Both should be written using the SMART goal formula: specific, measurable, attainable, realistic, and timed. Mark your measurable progress checkpoints clearly on your planner so you can tick them off on a weekly, quarterly and annual basis.
Doing this means you’ll stay on the right track to business success. If you ever find yourself struggling to meet your goals, you’ll discover it in time to change direction, and not too late to avert disaster.
#6. You’ve Mapped All Your Activities for the First 12 Weeks After Quitting
When you no longer have a boss chasing you with deadlines, it becomes tempting to slack off. You may convince yourself to enjoy your newfound freedom for a while, and that can send you down a path of poor productivity and dismal results.
That’s why you need to establish momentum early on, which you can only do through consistent and continuous action. So your best safeguard against productivity sabotage is to plan with military precision.
Type up a detailed twelve-week action plan, so you know exactly what you’ll be doing each day — starting from day one. Then, start doing. It’s your recipe for success.
#7. You’ve Identified Two Alternative Work Locations
Like it or not, going from a bustling corporate job to a lonely home office can be a shock to the system. Working for yourself may become a slippery slope to darkness as you begin to crave conversation and accountability. Self-employment may soon start to feel like a productivity-zapping isolation cell.
You can avoid this by finding ways to meet your need for human connection that doesn’t involve begging for your job back.
Prepare yourself with a list of at least two alternative work locations that enable you to be part of a crowd while working for yourself. Look for local co-working spaces and coffee shops that offer free wifi.
In many cases, sitting in a coffee shop for a few hours each week as you tap away on your laptop can be the perfect antidote for loneliness.
#8. You’ve Recruited at Least Three People for Support and Accountability
It’s impossible to survive, let alone thrive, in the entrepreneurial world alone. If you’re serious (and I know you are), you simply must surround yourself with people who support you and people who hold you accountable.
It can be the difference between sinking or swimming as you discover what it takes to work for yourself.
Here’s a quick hit list of things you can do:
- Find two to five people with whom you feel close who will support and encourage you and your plans. Look to family or friends and share your goals and progress with them.
- Join local business networking groups and online forums — and start contributing.
- Surround yourself with guidance and advice by finding a professional mentor, or hire a business coach.
- Commit to weekly accountability meetings with people from courses you’re enrolled in or groups you’re a member of. Ask someone to be your accountability buddy or join/start a mastermind group.
And those are the eight boxes you must tick to determine you’re ready to leave your job. Here’s an infographic that sums them all up:
Embed This Infographic On Your Site
Ticked All the Boxes? You’re Ready to Quit Your Job
You know that taking the leap into the entrepreneurial world is not for the faint-hearted — and it excites you more than anything.
If you’ve ticked all eight boxes, you should feel confident you can safely quit your job.
You’re now prepared for the adventure with a clear roadmap, a solid safety net and a strong support network.
You’re ready to transition from employee to entrepreneur.
Now is the time to stop playing a small game.
Because freedom awaits.
I needed this post so badly because this exactly where I am right now. These are things I would not have thought so I really appreciate this because this is such an important decision. Thank you!
You’re welcome Angela. All the best with your decision 🙂
Guess what Angela? Your narcissist boss wants to keep you enslaved so they can continue getting rich off of you. Has your employer ever directly or indirectly threatened you before? If so, you may wants to read this post for spiritual inspiration and emotional comfort. Narcissistic employers don’t want their employees knowing about the side hustle and lead them to think they only way they can achieve job security is staying with the company. No way, Jose!
I wish i found this post 2 months ago.
believe it or not you and jon morrow are my idol writers.
Thanks for the beautiful words (and just secretly, Jon is a writing idol of mine too 😉 )
You have come up with great points Miranda. I have seen some friends that jumped to soon without making sure they where financially ready. Thanks for this.
This came just at the right time! 😋
Excellent right-up, coming in at the right time!
But must you have 3 people working for you before you quit your job? What if you are a soloprenuer?
Hi Jay, they don’t need to be working for you, just keen supporters of your mission. You can still be a solopreneur and surround yourself with people who’ll keep you on track and hold you accountable. Make sense?
Cheers, thank you!
Dear Miranda,
A magnificent post, and one that was definitely needed.
Somehow you’ve managed the split between realistic and inspiring and got it just right.
Please keep up the good work.
Thanks Edward, I’m pleased you enjoyed it.
This is awesome! I got laid off a few months ago and I’ve been debating about pursing blogging full-time or getting a job. This is helping me see I don’t need to get ahead of myself and taking a job to save up some more money first won’t be “quitting” on myself. I’m getting work now, but I’ve got a long way to go before I’m self-sufficient.
I love that you’ve recognized the importance financial responsibility as a key ingredient in realizing your blogging dream. You’re so right, saving money to stay afloat isn’t quitting, it’s being smart. Good luck to you 🙂
Lots of thanks to you, Mira
I’ve just moved to my New office this morning because I quit my day job to work full time on internet marketing and blogging.
At first, i never wanted to take such action for I was afraid of what could be its result. Now it seems to be lonely… missing out office fun and all that.
Well, I’m trying my best to meet up with daily task and expenses
Hope I recover oneself and never to see a reason for regrets in time to come.
Congratulations on your new office. Exciting. Sounds like you might need the energy of people around you on occasion to keep you motivated. Point #7 is definitely an important one for you.
Miranda, thank you for writing this post!
Finally, no Woo- hoo stuff of quitting your job and starring the crystals for cash.
You’ve given practical, a must-do-list before flipping the boss. I’ll pass along to the woo-hoo’s who just want to quit and stay home in pajamas waiting for the full moon to drop cash 🙂
Thanks!
You make me chuckle. Thanks for passing on my post!
Great post with lots of thoughtful and practical tips. It’s one I’ll be coming back to as I continue to build my blog with the hope of transitioning into it fulltime in the next couple of years.
Thanks Kim, the transition is definitely a process. Keep at it. I hope it goes well for you.
Great post Miranda,
Most people afraid of taking chances and they often stuck at rat races doing what they really don’t like. It’s not only about paychecks, right? You should create your own dreams, pursue them, fail often and then succeed. That’s what life is all about.
The sad thing is, as you said, quitting job is not easy. It sounds easy on paper, but taking a big risk of quitting your job to pursue your business is kind of a big deal. That’s why most people afraid to even think about leaving their cubicle jobs.
You should make sure to create an emergency fund for at least 1 year before you think about taking the risky turn.
Great insights Miranda. Keep publishing more of such articles.
Anil Agarwal
The timing of your post is providential! More work to do but on the way.
Quitting job what scares me, but your post has helped me some way now I can take my decisions which path to choose and go on.
I remember that when my father quit his job and starting his owner business. He has faced some problems. which which you mentioned in this post.
Quitting job and set up a owner company or business is very hard. This post will help people who want do it.
Your financial aavunga are your biggest life saver when you quit job to pursue your dream and a balance to sustain your family for 6 months is a comfortable amount for a stress-free life.
But it is not mandatory if you have a concrete business plan and you have tester your minimum viable product as a side gig.
The secret to start a new business likes in the old concept of diversification. The less dependent you are you your current job, more easy it will become to start a new business.
Thanks Jon for the insightful post.
Hey Miranda!
I’ve flipped my boss back in 2011 when I thought I was going to make it big online and did not! That was not a smart move for me. I went through some of the things you point out over here. I struggled to make ends meet and had to go back to the 9 to 5 job.
So, I know for a fact that one should definitely tick off all of these 8 boxes before even considering flipping the bird to your boss! 😉
You have to be making more than what you are making at your current job with your online business before going full time from home. Otherwise, there is no point and you will be miserable, I can guarantee that.
Thank you for sharing this!
Best regards! 😀
The narcissist employer wants to make employees slaves so they can feel they’re better than everyone and dominate the workplace. That doesn’t work with me. In the past, I talk back to employers when necessary, speak my mind respectively, put them in their place, and let them know my talent is something that doesn’t come and go: I had this with me for decades and I’m going to use it now to build a business. Narcissist employers become furious when they hear that. Never let any employer, even if they come off as virtually being Donald Trump in a dress, let you feel like a slave and you must make money for them. Start your own business and achieve financial freedom. GO through those hardships with them. Yeah, it’s going to be tough and there will be days when you want to take your fist and knock their teeth clean down their throat. And you still have to respect the employer who’s a narcissist and talk decent to them. And also maintain self-control. The best reaction to a narcissist is no reaction and use the negativity to build your business to being a future millionaire through the side hustle and turning negatives into positives. 🙂
Hello Miranda,
This is a masterpiece. Before I quit my job and faced my blog as a full-time career, I ticked most of these boxes.
The quest to invest in my dream was driving me hard but I didn’t let that overshadow realities.
One aspect I didn’t quite do was having some money packed up somewhere. I was too broke to do that. Waiting any longer wouldn’t help.
Thanks for sharing anyway. I’ve seen a piece I can refer people to and save myself stress and time.
Cheers.
Emenike
Good on you for ticking the boxes responsibly before you took the leap and thank you for referring people to the post. 🙂
Thanks Miranda for sharing such a master piece. I see people wants to get rid off 9 to 5 job and wants to start their own business but everybody is not successful one should realize and you should be financially sound enough before you quite your job.
Guess what, Michelle?
E-mail marketing will continue to be an effective medium years to come, guving affiliate marketers, bloggers, and those who are into the side hustle an advantage to connect with their permission based audience on a personal level.
Well said Mitchelle – being financially sound is key.
I really enjoyed this article, as someone that just started their business three months ago, i can tell you that even with the most accurate of plans there are still things that you might not have thought of. It’s a roller coaster ride to say the least….. i have met people that started their business and they have student loans or not positioned in the best financial light. thank you once again for the article it was a great read.
Hi Miranda.
Thanks for the very useful checklist!
What I learned is, before you quit your job, you should make sure that you are working so hard that your manager gives you an offer to stay.
And this has personally worked for me.
By the way nice post and thanks for sharing your thoughts.
Hazel,
Not necessarily. Your narcissist boss might set you up for termination if you make it clear that you go to church and believe in The LORD Jesus Christ. The manager only cares about profiting off the sweat off of people’s backs and covering up their tracks from the wrong they do to the employees they personally target as a personal vendetta.
It’s better if as a reason for your dismissal is an increase in salary or career growth, which is expected in a new place. In this case, the boss will either understand that he has nothing to respond to such a tempting offer of competitors, or try to bargain. And in either case, you will be in favor – either leave without problems, or get an increase in salary in the old place. However, in the second case it is worthwhile to think carefully before agreeing. Perhaps, by signing an order to increase your salary, the chief will actively seek you a replacement. It is possible that he will even offer a higher payment to a new employee, because the matter here is not so much about the greed of the boss, but in resentment that you decided to leave your home office. It happens that the boss reacts to your desire to quit not quite adequately. You are immediately referred to the category of “enemies of the people” and “traitors” who have abandoned their native firm at a difficult time, or they begin to use you without a twinge of conscience, trying to get you to fulfill the annual workload for two weeks before dismissal. In this case, you only have to endure these two weeks and try to do everything you need as qualitatively as possible.
You are definitely right. The narcissist boss is greedy and will plot on employees who they think are getting too close to them.
Good Blog, Miranda!
Could not agree more. I’ve had my own agency for 14 years.
One of MY SECRETS to keeping entrepreneur life fulfilling and prosperous is: Surrounding yourself with the best in partners and employees, whether they are 1099’s or employees. Make sure they are smart strategic thinkers that keep you excited about your work. The excitement should be in the form of seeing value in the strategies in which you can effectively work out punch lists for the project management. There is where the rubber meets the road.
Have weekly meetings on gotomeeting or physically, in order to keep tangential avenues at bay, or any the very least out in the open in order to get a weigh-in of whether valid enough to add to your work.
SECOND SECRET: Put accountability checks in place to measure results. This may be in the form of traffic reporting, sales close discussions, or in the simplest form as checkboxes on contracts about ‘how you found us’.
Hey Miranda,
Great article, and especially the focus on having a financial cushion to support yourself when your favourite (and maybe only) client vanishes into a cloud of ninja smoke.
I didn’t listen to that advice, took that leap of faith, and got “dumped” by my biggest client 3 months later. Doh!
But it all worked out in the end, so the only piece of advice I’d add is that far too many people quit when they’re just 3 feet from gold. But the kicker is that it’s impossible to tell when you’re at that stage.
Anyways, thoroughly enjoyed the article, and looking forward to more of the same 🙂
Niall
Thanks for sharing your story. It’s such a valid point you make too, work smart, be responsible, dream big and show some grit. It’ll take time to get real traction. All the best to you.
Hi Mirinda your article inspired me a lot. I am currently a student of engineering but my main interest is towards business. But my parents can’t afford to start or business for me. Is there way anything I can do? Please waiting for your reply. Than you. 🙁
Hi Usama, have you considered investing time in studying more about business in the areas that interest you? Doing this alongside your engineering studies could provide your more clarity about the first steps that are right for your situation. All the best and remember it all starts with you!
Hi Miranda,
I think those categories of people who are afraid to start their own personal businesses and also do not like working for others doesn’t exist much as I should have thought. But if they do, what could be the best recommendation or remedy for their actions?
I have a relative who feels this way. Though, he doesn’t want to work for someone and at the same time too lazy to work for himself and sometime scared to make business decisions that will require risks.
Miranda,
Thank you for this article! Being at this crossroad can certainly cause a lot of anxiety…..this article is something I will keep in mind. Thanks!
Good Blog, Miranda!
Could not agree more. I’ve had my own agency for 14 years.
One of MY SECRETS to keeping entrepreneur life fulfilling and prosperous is: Surrounding yourself with the best in partners and employees, whether they are 1099’s or employees. Make sure they are smart strategic thinkers that keep you excited about your work. The excitement should be in the form of seeing value in the strategies in which you can effectively work out punch lists for the project management. There is where the rubber meets the road.
Have weekly meetings on gotomeeting or physically, in order to keep tangential avenues at bay, or any the very least out in the open in order to get a weigh-in of whether valid enough to add to your work.
SECOND SECRET: Put accountability checks in place to measure results. This may be in the form of traffic reporting, sales close discussions, or in the simplest form as checkboxes on contracts about ‘how you found us’.
Great and informative article thanks
Hi,
This is a wonderful post. Only wish I had seen it earlier.
Thanks anyway.
Excellent right-up, coming in at the right time!
I remember like it was yesterday that I quit my job! The best feeling ever. I definitely went through some checklist before quitting though lol. I love what I do #FreelanceWriter
This is one of the best articles I have read on this subject. I am leaving my job this year and the nuggets I derived from this are greatly appreciated.
It’s cleaver doing this before quit. People should prepare tasks to don’t be
stagnant.
This is a great thread, really helpful information for every person who wants to start a business and success in short time. Thanks for share.
Inspiring article. First think then do! It’s good to remember before starting something new.