Five years ago, I made the jump from full-time employment to self-employed entrepreneur.
But I made the jump too early – and I paid for it with a lot of hard times (the School of Hard Knocks was never more real to me). I failed horribly and miscalculated my readiness to make that jump. But in many ways, that’s entrepreneurship. You take chances and put yourself out there with no guarantee.
To be clear, I don’t regret it. I won’t ever regret the chances I’ve taken and the adventures I’ve been on. Because of my experiences, I’ve grown more in the past several years than at any other point in my life. And I’m truly happier than I’ve ever been in my life.
However, I definitely would have done things differently back then if I had known better. And that’s why I want to help you make the jump (or not – yet). I know the rewards of working for yourself and I can say with certainty that they’re worth chasing after and taking chances for. But you want to make a smart jump to help mitigate that risk.
Think You’re Ready to Make the Jump? 3 Reasons You Might Not Be Ready to Leave Your Job
The biggest risk is not taking any risk… In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.
– Mark Zuckerberg
There are two temperaments when it comes to self-employment and entrepreneurship: the risk-avoider and the risk-taker. I will openly admit that I’m naturally a risk-taker.
I used to think only risk-takers were suited for entrepreneurship, but I was wrong. You need to be willing to take risks when they’re calculated and in your favor, but I’ve learned that there’s a lot of wisdom in the risk-avoider’s method as well.
I still think a strong willingness to take risks is a hallmark of most great entrepreneurs. However, since making the jump, I’ve learned three lessons in particular that will help you make a more careful and calculated jump. Use these reasons to tell if you’re ready or not and the associated tips to better prepare yourself to make that jump.
1. You haven’t proven you’re good with your finances
Savings is important. However, while it’s a big risk to go without it, it’s not essential if you have a solid business income before making the jump.
Having said that, if you even consider going full time in your business before you prove you’re good with your finances combined with a lack of savings (I’d even put being good with your finances above having enough savings) then you’re asking for a death sentence.
What do I mean by ‘good with your finances’? First, do you have a habit of spending every dollar of your paycheck each week no matter whether you have something specific to pay for or not? Do you make enough to pay your bills and yet struggle to actually pay them on time consistently?
These are a sign you have some very dangerous money habits. Specifically, that money is controlling you as opposed to you controlling money. If that’s you, you’re probably not ready to venture out on your own.
Tip: Start saving $25 a week into a separate account. Set up automatic withdrawal from your main account so you don’t even think about it. Over time, this will help expand your identity to help you see yourself as someone who has more than enough as opposed to ‘just enough to pay the bills’.
2. You haven’t yet developed the ability to work when not under pressure
Working under pressure is important. However, when you start working for yourself, being productive when you’re not under any pressure is arguably more important.
Why? Most of the time you won’t be under any particular amount of pressure. For many people, though, they require a certain amount of pressure to get themselves moving. But an entrepreneur (or any high performer) can’t work this way. If you only work when you feel like it or when there’s pressure on you to move your ass then you’ll find yourself having a very hard time trying to build a business.
Look to other high performers of every walk of life and profession and see that a major factor of greatness is that they show up every single day even when they don’t feel like it. Rain or shine, pressure or no pressure, sleepy or discouraged, they still get out there and give their best effort.
And if you hope to make it as an entrepreneur or general business owner of any kind, you’ll need to too.
Tip: Start measuring your productivity each and every day (yes, even on the bad days). Getting into the habit of tracking your progress will develop your consistency and the habit to work no matter what.
3. You’re not in love with the process of running your business, you’re seduced by the idea of running a business
Many entrepreneurs are opportunists. They look at the climate of their surrounding economic (and other) environment and create solutions to problems that are highly relevant now. That’s perfectly OK and can be extremely profitable, but it won’t work out unless you truly love the process of building the business.
Why? Because energy is necessary to move a business forward. And energy can only come from a person with a love and passion for what the business is doing. If you don’t have a passion for what you’re doing then eventually whatever energy had for the project, in the beginning, is going to die out.
When that happens, you’ll be left with nothing in the tank which is particularly killer when the business goes through hard times. This happens to all great entrepreneurs and all great businesses, but without that sense of vitality and energy, you won’t be able to get past those hard times without quitting (or tanking the business).
To be clear, I’m not saying you have to love everything about the business. There are different things you can love such as:
- Build something that helps people (even if the thing you’re building isn’t this specific passion of yours)
- The actual topic, service, or product (even if some aspects of business, like finances and budget managing, aren’t so hot to you)
- Working with others and collaborating to make the best use of yours and everyone else’s skills and talents
Whatever that thing is that gives you a sense of passion and love for what you do can be different, but the passion and energy for what you’re doing need to be there. If you’ve picked a business topic, product, service, or model that doesn’t give you that sense of energy than you likely need to scrap it and go back to the drawing board.
Tip: If you have a hard time defining what you love about the business, it may be that you’re simply motivated for now by the idea of running a business and not actually loving the process or work itself.
If that’s the case, take some time to find out what you truly love and have a passion for and design a business idea which allows you to do one of those things for a living.
Making the jump is a big deal and it’s altogether exhilarating. However, it’s important to make sure you’re being smart about every step of your business journey, especially when you leave your job and make the jump from employee to self-employed entrepreneurship.