How to build your business before quitting your day job

How to build your business before quitting your day job

So many professionals dream of going solo, but the questions loom:

How can I go solo when I have little to no savings?

How do I know my solo idea will really work?

When can I find the time to even focus on my solo business when I am bogged down with a full-time job?

These are all valid points. As much as many of us dream of being the bootstrapping entrepreneurs who give it up all to pursue their dreams, we often have more practical things getting in our way–real life responsibilities that we cannot just ignore as we try to carve out a corner for ourselves in the professional world.

But what if you could truly have it all–the bustling consulting business and the security of not having to leave your full-time job until your finances are really solid?

If you play your cards right, you can. Here’s how to get started.

Focus, Focus, Focus

Before you begin looking for clients or building your website, you need to have some honest heart-to-hearts with yourself. What are your real skills and contributions? What lack do others have that you can help fill? This is the most basic question you need to answer before starting any consulting venture.

According to consulting.com, “to build a consulting business, all you really need to do is focus on helping a specific group of people solve the problems they are facing.” So take out a pen and paper and ask yourself: “What do people really need help with? How can I help them?”

Once you’ve got this down pat, you’re ready to move forward and create a distinct value proposition. This is how you are going to help others get from point A (where they are now) to point B (their desired state). If the transformation is one that you have gone through personally, even better.

Find Your Niche

Now that you know the value you have to offer, its time to figure out exactly who to offer it to. To discover your niche, ask yourself the following:

  • What industries/communities do you already know well?
  • What are the individuals and organizations in those industries lacking?
  • What experience and skills do you have that can help fill that lack?

You need to really narrow down who you are targeting here. Many rookie consultants make the mistake of trying to be too broad in their offerings and in the audiences they are targeting. The key here is to be as specific as you can about what you offer, and to whom you are offering it.

Start Small, Start Strong

You’ve developed your value proposition and narrowed down your audience. Congratulations. Now is the time to start developing and testing a marketing funnel. The first place to start is wherever your audience is. If your audience frequents certain Facebook groups, join them. If they go to conventions, go to the convention. Your first clients will likely be acquired through personal relationships and communications (don’t worry–scaling and automation come later–after you’re already bringing in money and quitting your day job).

Come to your audience with a very clear offering and be confident about the results you can help them achieve. The goal is to land a few starter clients that will give you the feedback and tools necessary to truly understand how to grow your business from the ground up.

Game On

The best part about this system? It doesn’t require your full attention. Try devoting 2-3 hours a week, and you will be way ahead of the game. The most important part here is really getting your core offering and messaging down, finding the right people, and securing their trust.

Once you’ve begun to taste success, you can move into more strategic marketing and business development. But you have to start somewhere, and the somewhere can be exactly where you are right now.

How to build your business before quitting your day job

Like diving from a cliff the first time, leaving your job to dedicate yourself to your own business can be quite daunting prospect. There should be much more consideration to making a decision to quit your job than simply “look before you leap.” There are ways to approach this without burning bridges, while building wealth and increasing the likelihood of success in the new venture.

Determine a good crossover point, so that you can enjoy the best of both worlds. Why not maintain those relationships developed during your career while gaining some early traction? Much of what works and doesn’t work in a venture can be figured out before making a full commitment to it. You can work toward a bottom line measurement, where profit trajectory from the business crosses your income needs, before you make the leap. This is not always easy to do but will be worth the effort.

If done well, quitting your job to dedicate yourself to your business will be a natural transition, even if this is your first time.

Here is a list of ten things to work on to determine a good crossover point. In other words, don’t quit until:

1. There is a good product or service offering in place.

An idea, set of samples, prototype and the like do not count. There needs to be a real business opportunity in here. Wherever possible, it should be proven, backed by a good plan and operating on a sound business model. It takes solid front-end marketing to determine that. There is rarely any value in quitting a well paying job on just a hunch there is a good business opportunity. Whatever it is, it needs to be priced for sale and priced for profit with all the costs of overhead, production, sales and distribution factored in.

2. There are real customers.

Unless you are selling quilts, family and friends are not considered customers. Whether your customers are end users, distributors, retailers, businesses or the general public doesn’t matter as much as whether or not they are real and sustainable.

3. There is enough money in the bank to sustain a prolonged dry spell.

It can take three years to develop a business to the point there is enough profit above and beyond the needs of the business to generate a healthy income for the owner.

4. The business becomes more enjoyable and satisfying than the job.

This is easier for people who hate their job than it is for those who are very passionate about their work. There needs to be passion and enthusiasm for the new venture, otherwise it is bound to fail. This is always true if you are the one leading it and doing the sales. With few exceptions, this also holds true if you are simply taking over an existing business with a track record and organisation in place. The attitude of the owner affects the whole enterprise.

5. The product or service offering is not being trampled by a major competitor.

If a big competitor can afford to and does make a big effort to undercut your offering and has the ability to out-market, out-produce and out-sell you, the business could quickly become a race for the bottom.

6. The business will not likely go broke within three to five years.

The sad reality is that about half of all companies are simply not around five years after they are started. About a third of the ones that close do so because they lose money, another third break even and the remainder are profitable. There are many reasons for a company to close its doors, but not making a profit is obviously the main one.

7. You develop the self discipline it takes to tough it out in your own business.

Not having a boss or system in place to keep you working makes it easier to become distracted and lose focus on the needs of the business. Putting off necessary sales calls to head off to the beach on a nice summer day is a surefire way to undermine the chances of success.

8. You have become an expert in your chosen area.

Leaving a 20 year career in the insurance industry to start a venture manufacturing a new health food snack bar is likely going to become problematic. People in both the insurance and food industries will be skeptical unless clear expertise has been developed in the relevant areas. This is why it is often easier to transition from a job to a business in a similar area or expertise. An insurance veteran offering a new product or service in the insurance field will have less trouble establishing credibility as an expert.

9. You have enough of the right “friends” in the area.

A productive network is a great asset in building a business. If you have the right people in the right places available at the right time, your business is much more likely to succeed than if you don’t. Use tools like LinkedIn, Facebook and industry networking events to enhance your network.

10. You have key mentors and advisors in place.

These people can help you develop the business long before full deployment. Call on more of your growing network of “friends” as things develop. These advisors can also help with determining when to quit your job (or the business).

It boils down to really knowing yourself and knowing your stuff before going into your new venture with a full commitment. You should know the area well enough to be able to write a book about it. This helps eliminate the tendency to respond to the frequent “once in a lifetime” opportunities that come along.

Develop the business under trial conditions as much as possible while you are still maintaining your job or career. You won’t likely be able to generate much volume or profit during this phase. It is often hard to go out and make sales calls during the day while you are working 9 to 5 job. However, it is quite possible to do substantial test marketing and research without having to quit your job. There can usually be enough product or service development work done where needed to get it into a saleable enough form to get orders from real customers – enough to prove out the business and maybe make a small profit. Plus build your network, expertise and credibility in the area.

Develop your business to the point that you simply are forced to choose between your job and the business. Do that, and you’ll be much less likely to hit rock bottom when you make the leap!

Peter Paul Roosen and Tatsuya Nakagawa are co-founders of Atomica Creative Group , a specialised strategic product marketing firm. Through leading edge insight and research, sound strategic planning and effective project management, Atomica helps companies achieve greater success in bringing new products to market and in improving their existing businesses. They have co-authored Overcoming Inventoritis now available.

How to build your business before quitting your day job

Grow Your Business, Not Your Inbox

How to build your business before quitting your day job

So you’ve decided you’re ready to take the plunge, quit your job, and get your own company up and running. You have an amazing business idea you are ready to launch. You’re probably excited and nervous at the same time, which is perfectly understandable. If this is the case, you need to take a step back and remember that you simply can’t walk into work tomorrow with your resignation letter.

Being impulsive could be a huge mistake so you need to create a list of the advantages and disadvantages you will face when quitting your job. If you decide it’s still what you want to do, there are a few things you must put in place before you quit.

To help you get ready before your big day of freedom, I’ve highlighted 10 things you should do before quitting your job and starting your own company.

1. Do research.

Quitting your current job before getting your company off the ground may seem like the best option, but trust me, it’s not. The best way for you to get the wheels rolling in a safe and profitable way is to grow your business while you are still employed. This will make your transition from an employee to an entrepreneur a little smoother.

You can’t jump head first into building your new office block or warehouse if you haven’t done your research. You need to know that you have a product or service that you know the ins and outs of, that is unique, and above all, that will sell.

Background research you need to do includes, but is not limited to:

  • Learning everything about your product or service
  • Knowing your audience and buyer personas
  • Researching your competitors
  • Finding the right teams
  • Knowing what your most profitable sales and marketing channels will be.

2. Create a business plan.

Once you’ve done your research, you need to put it on paper. Laying out a business plan before taking the plunge will be a key success driver. Your business plan will be something you will show to potential investors, partners, and other company stakeholders. It typically includes:

  • An overview
  • An executive summary
  • A company description
  • Your objectives, vision, and mission statement
  • Information about the market and industry into which you are entering
  • The strategy you are going to follow to enter the market
  • The team you will have
  • A marketing plan
  • An operational plan
  • A financial plan
  • An appendix with more detailed information

3. Outline your funding options.

Before looking at funding for your company, you need to have your own personal finances in check. If you quit with just a couple of hundred dollars in your pocket, with rent, insurance, and your phone bill to pay, you may find it difficult to focus your efforts on your new company.

In addition to planning your personal finances, you will need to have a plan for your startup. You’ll typically have three options:

  • One or multiple investors
  • Your personal savings
  • A grant or award for your project

Either way, you need to plan in advance because if you can’t get the capital to get started, your business will stagnate and you will be faced with very few options.

4. Create the structure for your business.

You need to have the structure for your startup in place before you can quit your job, specifically, your legal structure. There are various types of businesses entities you could become:

  • A corporation
  • A limited liability company
  • A partnership
  • Sole proprietorship

You need to consider:

  • The operational complexity
  • Liability
  • Taxes
  • Control
  • Capital
  • Licenses, permits and regulations

5. Leverage your resources.

Of course, you do not want to spend money if you can avoid it. You need to look at the resources that are currently available to you. For example, you may have a friend who is a web developer; they might be able to give you special rates and work for you on a need-to-know basis.

You should contact friends who have started their own business and ask them if they know a good accountant, marketing expert, and so on. Think about joining an online book club to learn more about entrepreneurship, try Read with Entrepreneurs by Cynthia Johnson.

Lastly, contracting all your experts could become expensive. Consider investing in online education for your team that will teach them skills, such as SEO, email marketing, and much more.

6. Leave on a good note.

Quitting your job without working your notice period, gossiping across the office, not completing your final assignments, and not training your replacement could be the worst decision of your life.

Of course, you are leaving to start your own venture, but you cannot be sure that tt will be a success or that your old company won’t come in handy one day. Leave without burning any bridges amd you may be able to cash in a favor one day. Your old employer may even send clients your way knowing that you are a trustworthy businessperson.

7. Don’t forget the smaller planning details.

As an entrepreneur, it’s easy to become the type of person that can see the big picture. Unfortunately, if you don’t focus on the small details, you won’t be able to mold the perfect company. Planning is key, and little things such as choosing the right social media channels, keeping up to date with emails, or even remembering to file your taxes are vital to your success.

8. Choose your new office space.

When planning the day when you quit your job, many assume that they will work from home until their company is off the ground and they have a team backing them up. Although this could work in the short term, it’s not a feasible option in the long run.

If you choose to work from home, you need to find a balance between your personal space and work space. Working in bed, on your computer, all day, every day will lead you towards an unhealthy lifestyle that could have a domino effect on the progress your startup makes.

9. Create a portfolio or resume.

You may think that owning your own company means you’ll never have to create another resume in your life. Wrong! Bulking up your resume and/or portfolio is a key driver when building your new business because you will need to prove to your investors, teams, and even clients that you are worth their money.

Are you thinking about quitting your job to become a full-time entrepreneur? Whether it is because you hate your job, want to monetize your talents or have a burning passion to be your own boss … WAIT!

Being a full-time entrepreneur is more than making money off of your products, services or talents. It will require a significant shift in mindset and possibly lifestyle. So, before you give your boss the boot, here are 5 things to consider.

Can You Pay My Bills?

Destiny’s Child had it right with their song, /“Bills, Bills, Bills.”/ At the end of the day, “the way our bills are set up,” bills like rent/mortgage, utilities, loan payments, insurance, etc. must be paid every month on time. And if you are the breadwinner of your family, food is more than likely another required monthly bill. Before you quit your job, make sure you will make enough money monthly from your business or entrepreneurial venture to pay your bills and maintain your desired or reasonable lifestyle.

All About The “Benefits” Baby!

Most of the time we focus on making more “Benjamins,” as we should! Keep in mind that if you, your spouse or child(ren) require regular doctor’s visits, medical attention or medication, having medical benefits may be a priority for you. As an entrepreneur, the Affordable Care Act gives access to healthcare based on income. However, the benefits, like co-pays and deductibles, may be much higher than what is provided through your employer. Before you quit your job, review the medical benefits you have with your employer and compare the different medical coverages available through healthcare.gov. Consult with a health insurance professional to understand your options and differences in coverage and cost.

Are You Addicted To Direct Deposit?

Statistics state that 1 in 3 of Americans is one paycheck away from being homeless. Unfortunately, we witnessed this with the Government Shut Down in early 2019 that last over 30 days. The emotional rollercoaster for many new entrepreneurs is not knowing when next sale, contract or deposit will happen. If not receiving regular direct deposits will cause financial hardship or severe emotional anxiety, reconsider breaking up with your employer. Before you quit your job, build up enough cash so you can live on your savings while your building your business and during the slow sales seasons as an entrepreneur.

I’m Not Your Super Woman (or Super Man)!

In 1988, R&B Singer Karyn White’s song /“I’m not your Superwoman”/ ignited a fire in many women to let the world know that we can’t or want to do everything. However, as entrepreneurs, we must have a basic understanding and ability to execute other tasks of running a business. At work, people work in different departments, which allow employees’ to focus on their specific job duties. Before you quit your job, make sure you have adequate support or ability to execute critical areas of a business, including bookkeeping, marketing, sales, etc., as well as producing your product, service or talent.

Risky Business!

Don’t let the fake glamourous life of an entrepreneur on social media fool you. Being an entrepreneur is a risky business.

“If it were easy to be an entrepreneur, everyone would be one.”

Being a successful entrepreneur takes a significant amount of commitment, resilience as well as requires a different mindset. Many people fail as an entrepreneur because they still have an “employee mindset.” Before you quit your job, ask yourself if you are really ready to take the necessary risks. Also, determine if you are willing and able to invest the time, energy and money it will take to be successful and profitable. It is not easy to be an entrepreneur and should be respected.

Final Thought: You Should Start Your Business

The reality is that hating your job is not a good reason to quit your job to be an entrepreneur. It may just mean that you need to find a new job. Better yet, become a DUALpreneur[1]™ by building your business while you are still employed.

“Keep Your Benefits AND Build Your Business!”

While your employment income is paying your bills and sustaining your lifestyle, it will also be the first capital investor for your business. For many, becoming a DUALpreneur[1]™ is an excellent transition from being a full-time employee to a full-time entrepreneur the right way.

How to build your business before quitting your day job

(Image credit: Getty Images via @daylife)

Thank you for joining me for the fifth segment of The Launching Pad’s Small Steps: Big Leaps series aimed at helping Americans from diverse professional backgrounds embark on successful entrepreneurial careers and thereby revive the U.S. economy. For more information on this series, check out my April 2 nd post, and to join this movement to grow the economy through large- and small-scale entrepreneurship, please check out The Startup Stand.

The previous installments of this series included discussions regarding identifying a need in your (broadly defined) community, identifying, utilizing, and developing your talents and skills, the importance of market research, and tips for driving operational efficiencies. The fifth critical step to launching a successful startup is ensuring that you do not quickly face a liquidity crisis that forces you to close your firm and return to the traditional economy as an employee. For many entrepreneurs, including myself, this has meant not quitting one’s day job when starting a small business, but instead waiting for the nascent business to produce enough revenue and profit to sustain the new entrepreneur through good times and bad.

A major deterrent for potential entrepreneurs is, of course, the risk involved in leaving a stable career with a steady, predictable paycheck for an exciting, but uncertain, future. While small business ventures are never guaranteed to succeed, you can minimize your financial risk by initially keeping your day job and working on your startup outside regular business hours. This enables you to maintain your stable income while building for the future. This approach also gives you enormous flexibility to weather instability in the market as well as in your revenues and costs, which is not uncommon in the early months and years of a startup.

I can personally attest to the benefits of working full-time while you start your own entrepreneurial endeavor. I started Stratus Prep in October of 2006, but did not leave my job to devote myself fully to Stratus Prep until April of 2008. During those two years, my company became an established, recognized firm with unparalleled success rates and a reliable stream of new clients (primarily from word of mouth referrals). I waited not only until my business was profitable, but until its profits could nearly replace my full-time earnings before relying solely on my startup for my livelihood. With the security of having proven the success of my business model over two years, I felt confident that I was making the right decision while I took the entrepreneurial “plunge.” Today, Stratus Prep is a multi-million dollar firm with clients in over 40 countries. So, do not let anyone tell you keeping your day job will impair your ability to have a highly successful start-up.

When you start your own small business, there will always be a mix of excitement and nervousness, but if you are considering working at your startup full time, and it’s making you lose sleep because you are worried about your financial future, then you are likely moving too quickly and should continue to build the business while maintaining your day job. On the other hand, if you have the 1-2 years of living expenses saved up, you may be able to dedicate yourself full-time to your start-up venture without putting yourself under undue financial pressure.

There are countless other examples of highly successful entrepreneurs who started doing what they love on the side while maintaining a day job for financial stability. Etsy shop owner Mike Schmiedcke, for example, worked in the technology sector for decades before opening his BarnWoodFurniture shop and selling hand-crafted furniture online, according to Etsy’s blog. In an interview with Etsy, Schmiedcke said that he stuck with his day job while getting on his feet: “I used my day job to pay the bills and sunk most of the rest of what I made on Etsy into buying new tools, marketing, and stockpiling lumber.” He now works full-time on BarnWoodFurniture and was able to leave behind his computer programming job with confidence.

With technology advances have come new entrepreneurship opportunities. Not only do online stores like Etsy now provide an outlet for crafty entrepreneurs, but the rise in the popularity of eBooks has opened doors for writers who otherwise might never be published. While publishing represents a slightly different facet of entrepreneurship, many writers have successfully launched an entrepreneurial career while maintaining their day job. In fact, even some very successful authors still have day jobs to this day and do not rely solely on book sales for income. Now that anyone can self-publish on Amazon’s Kindle Direct Publishing, writers who were turned away by agents and publishing houses have the opportunity self-publish their eBooks. For example, according to an article in the Wall Street Journal, Darcie Chan’s self-published novel “The Mill River Recluse” was on the best-seller list and has sold hundreds of thousands of digital copies. Chan still works from home, 9 to 6, and writes in the evenings.

As you can see, when you start your own entrepreneurial venture before quitting your day job, you can easily overcome one of the greatest impediments to entrepreneurship: fear of the financial risk. If you find that the free time you have available outside of work is not sufficient to get your business up and running, consider taking on a business partner who can share the burden. Ideally, this would be someone you trust and with whom work well, as well as someone whose skill set complements your own.

Starting your new venture while still working full-time will almost certainly lead to the busiest year or two of your professional life, but this is often a worthwhile tradeoff given the added financial security it will provide.

You now have the first five steps required to start your own small business and begin revolutionizing not only your own economic future but also that of your community and the nation! Check back next week for step 6 for tips on effectively marketing your product or service.

i am presenting here, what are all i am reading and what are all experiences which I got. i am just sharing here. வணக்கம். நான் விவேக்.. இங்கு எனக்கு கிடைத்த தகவலும் .. என்னை கவர்ந்த செய்திகளும் உங்களுக்கு தருகின்றேன் .

How to build your business before quitting your day job

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Like diving from a cliff the first time, leaving your job to dedicate yourself to your own business can be quite daunting prospect. There should be much more consideration to making a decision to quit your job than simply “look before you leap.” There are ways to approach this without burning bridges, while building wealth and increasing the likelihood of success in the new venture.

Determine a good crossover point, so that you can enjoy the best of both worlds. Why not maintain those relationships developed during your career while gaining some early traction? Much of what works and doesn’t work in a venture can be figured out before making a full commitment to it. You can work toward a bottom line measurement, where profit trajectory from the business crosses your income needs, before you make the leap. This is not always easy to do but will be worth the effort.
If done well, quitting your job to dedicate yourself to your business will be a natural transition, even if this is your first time. Here is a list of ten things to work on to determine a good crossover point. In other words, don’t quit until:

  1. There is a good product or service offering in place. An idea, set of samples, prototype and the like do not count. There needs to be a real business opportunity in here. Wherever possible, it should be proven, backed by a good plan and operating on a sound business model. It takes solid front-end marketing to determine that. There is rarely any value in quitting a well paying job on just a hunch there is a good business opportunity. Whatever it is, it needs to be priced for sale and priced for profit with all the costs of overhead, production, sales and distribution factored in.
  2. There are real customers. Unless you are selling quilts, family and friends are not considered customers. Whether your customers are end users, distributors, retailers, businesses or the general public doesn’t matter as much as whether or not they are real and sustainable.
  3. There is enough money in the bank to sustain a prolonged dry spell. It can take three years to develop a business to the point there is enough profit above and beyond the needs of the business to generate a healthy income for the owner.
  4. The business becomes more enjoyable and satisfying then the job. This is easier for people who hate their job than it is for those who are very passionate about their work. There needs to be passion and enthusiasm for the new venture, otherwise it is bound to fail. This is always true if you are the one leading it and doing the sales. With few exceptions, this also holds true if you are simply taking over an existing business with a track record and organization in place. The attitude of the owner affects the whole enterprise.
  5. The product or service offering is not being trampled by a major competitor. If a big competitor can afford to and does make a big effort to undercut your offering and has the ability to out-market, out-produce and out-sell you, the business could quickly become a race for the bottom.
  6. The business will not likely go broke within three to five years. The sad reality is that about half of all companies are simply not around five years after they are started. About a third of the ones that close do so because they lose money, another third break even and the remainder are profitable. There are many reasons for a company to close its doors, but not making a profit is obviously the main one.
  7. You develop the self discipline it takes to tough it out in your own business. Not having a boss or system in place to keep you working makes it easier to become distracted and lose focus on the needs of the business. Putting off necessary sales calls to head off to the beach on a nice summer day is a surefire way to undermine the chances of success.
  8. You have become an expert in your chosen area. Leaving a 20 year career in the insurance industry to start a venture manufacturing a new health food snack bar is likely going to become problematic. People in both the insurance and food industries will be skeptical unless clear expertise has been developed in the relevant areas. This is why it is often easier to transition from a job to a business in a similar area or expertise. An insurance veteran offering a new product or service in the insurance field will have less trouble establishing credibility as an expert.
  9. You have enough of the right “friends” in the area. A productive network is a great asset in building a business. If you have the right people in the right places available at the right time, your business is much more likely to succeed than if you don’t. Use tools like LinkedIn, Facebook and industry networking events to enhance your network.
  10. You have key mentors and advisors in place. These people can help you develop the business long before full deployment. Call on more of your growing network of “friends” as things develop. These advisors can also help with determining when to quit your job (or the business).

It boils down to really knowing yourself and knowing your stuff before going into your new venture with a full commitment. You should know the area well enough to be able to write a book about it. This helps eliminate the tendency to respond to the frequent “once in a lifetime” opportunities that come along.

Develop the business under trial conditions as much as possible while you are still maintaining your job or career. You won’t likely be able to generate much volume or profit during this phase. It is often hard to go out and make sales calls during the day while you are working 9 to 5 job. However, it is quite possible to do substantial test marketing and research without having to quit your job. There can usually be enough product or service development work done where needed to get it into a saleable enough form to get orders from real customers – enough to prove out the business and maybe make a small profit. Plus build your network, expertise and credibility in the area.

Develop your business to the point that you simply are forced to choose between your job and the business. Do that, and you’ll be much less likely to hit rock bottom when you make the leap!

If you have any additional suggestions, please post a comment.

Peter Paul Roosen and Tatsuya Nakagawa are co-founders of Atomica Creative Group , a specialized strategic product marketing firm. Through leading edge insight and research, sound strategic planning and effective project management, Atomica helps companies achieve greater success in bringing new products to market and in improving their existing businesses. They have co-authored Overcoming Inventoritis now available.

How to build your business before quitting your day job

Life is short. Too short to invest 40-plus hours a week into something that feels thankless. The longer an aspiring entrepreneur ignores the longing for freedom, the more distant and unlikely the dream becomes.

Don’t make a rash decision and quit your day job just yet, though. The recipe for entrepreneurial success is part risk, part faith, and part planning. I’ve been approached by far too many people who jumped in unprepared and sought out coaching as a last-ditch effort to succeed. Sadly, with more preparation upfront, many more of those businesses would have had a good chance of doing just that.

If you want to be an entrepreneur, here are seven things to do before you quit your day job. How ready are you?

1. Make it more than a daydream.

Daydreaming is something you probably do often, and that’s great! You need to make this more than a dream though; it’s time to work on your plan. Every step, from where you will operate to how you’ll fund and market your idea, needs to find a home outside of your head. Declutter your mind by creating a document that outlines your steps and how you will execute them. One caution though: Don’t strive for perfection; that’s simply another way of putting things off.

2. Connect with helpful people.

You’ve probably never done this business building thing before, so don’t go solo. There’s no need to reinvent the wheel. Find a couple of successful business people who are willing to provide sage advice and guidance. With the combined experience of a strong support network you’re more likely to make better choices. Also, find a great coach who has a solid track record of helping others in your position to succeed. Let’s talk about that.

3. Create a budget now.

Before you take the leap from employee to employer, plan for the consequences of a slower than expected take off, or even failure. Do you need to secure financial help from investors? Have you saved money specifically earmarked for living expenses and startup costs? Plan for a long road ahead; if you make it there sooner, you’ll have the capital for expansion. If you don’t have enough money set aside (double or triple the number that comes to mind) then start socking it away now. Take on a second job if needed–yes, I really said that. You may as well get used to the long hours now, since operating a start-up often leads to many sleepless nights.

4. Tell people about your idea.

If you’re afraid to share your idea and expect everyone you meet to sign an NDA, you’re acting out of fear. Stop that! Your idea is just an idea, and there are millions of them out there. When you actually have an innovation (an idea turned into a profitable business), you may need to protect it. Right now what you need is feedback, sage advice, and to become well networked. And that takes us to my next point:

5. Build a diverse network.

A solid network for support, connections, and financial support is critical to the success of your soon-to-be business. But don’t forget the industry connections related to your current work. Your contingency plan may include returning to a day job (for a period of time at least) and you don’t want to lose touch with the people who can help you do that. Please don’t burn your bridges! When the time is right, leave your company on good terms and with integrity.

6. Do a test drive.

You love your idea. You have to, or you won’t have the fortitude to make it work. Now it’s time to make sure you’re not the only one who believes in it. At this stage of the game, test the market by wading in, not jumping in feet first. Do your market research, sample out your product, and launch it in phases. I once had a client who wanted to launch an entire line of products, risking everything she had. Thankfully, she decided to launch only one and received invaluable feedback that probably saved her from financial ruin. No need for this to take years; perform your due diligence, correct course where necessary, and just do it.

7. Don’t make empty promises.

Hopefully, your close friends and family, especially your significant other, will back you up on your decision to take this leap. They might be more nervous about it than you are, so it’s tempting to make promises you may not be able to keep. Giving your word about things like a short timetable to profits and consistently devoting time to the family will soothe some of their fears and make your life easier–at first. Don’t pretend that this life-changing event won’t affect your home life and relationships, because it will. The trick is to create “life balance”over the long haul, understanding that there will be times when your life is anything but balanced. Be honest with yourself and others; anything less will only make you a liar, at least for a while. With that said, never lose sight of what’s truly important and can never be replaced.

For those of you who have already taken the leap, what do you wish you did differently? Help someone out and share your thoughts and insights here.

My goal was to create a life where I could travel more, learn more, have greater ownership over my time, and work in my pajamas.

I spent six months preparing, but I still wasn’t prepared for the plot twists, the highs, and the lows.

Over the last 12 months, I’ve collaborated with 29 clients from seven countries, failed miserably on four product launches, worked from three continents, flown past the six-figure revenue mark, had months where I earned less than minimum wage, felt like a both a genius and a failure — sometimes in the same day — and succumbed to one particularly taxing period of anxiety and desolation.

These are things I wish someone would have told me at the start of this journey.

Nobody knows what they’re doing

This fascinating piece on the psychological price of entrepreneurship references an analogy about entrepreneurship I love: it’s like a man riding a lion.

“People look…and think, This guy’s really got it together! He’s brave! And the man riding the lion is thinking, How the hell did I get on a lion, and how do I keep from getting eaten?”

Everyone running a business, whether they’re an independent freelancer or Fortune 500 CEO, is simply making educated guesses based on the information and experience available to them.

Imposter syndrome is real. I have to remind myself that it’s experienced by everyone, not just me. Those we look up to as “successful” aren’t special or extraordinarily talented. They just had the courage to dream big and the commitment to persevere.

Doing this is hard — Doing it alone is harder

I launched pretty much the easiest business it is to launch: a service-based business. I work from home, on my own. But it’s still so hard some days. Doubts and anxieties can quickly become overwhelming.

A couple of months in, I learned not to underestimate the value of support networks – mentors, peers, family and friends. I thought I could do this alone, but I was wrong.

I do a lot of work in the social impact space, so set up my own social enterprise mastermind program to help create this framework of support. I also have an amazing mentor.

This doesn’t always prevent failures or challenges, but it helps to resolve them.

Give up the things that don’t contribute to your goal

Priorities – and accountability to those priorities – are more important to me than ever before.

Warren Buffet’s 5/25 rule is one I live by.

In short, identify 25 goals you’d like to achieve. Circle the top 5. Everything not circled becomes your Avoid-At-All-Cost list, however appealing they might seem.

Every evening, I write my #1 goal in a notebook. Every Sunday night, I write my five goals for the following week on the whiteboard in my office. If a task isn’t aligned with these, I won’t do it.

Forgive yourself for failure

I’ve done several product launches this year that have fallen flat. I’ve had a couple of times where I wasn’t sure how I would pay for rent the following month. These are my worst moments – when I feel like I’ve failed.

I quickly learned that a measure of a solopreneur is when things are at their worst. That’s when it takes real commitment and determination. Anyone can work for themselves when the money is rolling in and they’re working from a hammock on Koh Phangan.

Becoming okay with failure, forgiving yourself for it, and creating processes to ensure you learn from it has a big learning curve. The sooner you can master it, the better.

There’s more than one way to structure your life

It’s fascinating to me how we live our lives within a framework that feels concrete but is actually malleable.

Growing up, we’re basically told how things are and how to “succeed,” whatever that means, within this structure. In reality, we have a lot more power than we’re led to believe.

Steve Jobs said something similar in a much more eloquent way than I can:

“Everything around you that you call life was made up by people that were no smarter than you and you can change it, you can influence it, you can build your own things that other people can use. Once you learn that, you’ll never be the same again.”

Until last year, I’d never truly understood that. Or maybe I just never chose to believe it.

Call it a tale of two entrepreneurs.

Erin Entrepreneur has lofty dreams, plenty of optimism, and a willingness to work hard. Then they quit their job, secure a small business loan, and their business goes belly-up within six months.

Eddie Entrepreneur is just as ambitious and just as hard working. But they could use a little more blind optimism. They keep talking about their dreams of one day starting a business, but five years down the road, they’re still no closer to their goals. They never quit their day job, but they don’t know what could have been, either.

The reality is, you don’t want to end up like either of these would-be entrepreneurs. How do you find the middle of two extremes and build up a side gig into a professional business? How do you avoid burning bridges while still moving forward?

No two tales are alike, but before you quit your day job, make sure the following steps are part of your story before you take the leap:

Step 1: Develop a Real Business

When a reader asked Fortune’s Anne Fisher about knowing when to make the leap, she pointed to MJ Gottlieb’s expertise. Gottlieb has written books about how to avoid the typical “rookie mistakes.” His conclusion?

“Don’t quit your job because you believe you have a great idea for a business. An idea is not enough.”

Even experienced corporations with entire marketing teams never know if an idea will fly with the market. All of the product testing and focus groups in the world aren’t a substitute for real-world results. So until you have real revenue coming in from a side gig, it’s not yet time to think about quitting the day job.

Step 2: Give Yourself a Financial Cushion

If you’re 25 and single (with miraculously low student loan debt), a simple emergency fund and some revenue from a side gig can sometimes be enough to feel relatively safe financially. But what if you’re 35 with three kids and a spouse who works part-time? The financial equation changes.

If you have only a small amount of revenue but know that your business can grow when you have more time to invest, you still need money to fall back on if the business heads south. You shouldn’t just put aside some money to invest in the business — you should put aside some money for yourself.

NerdWallet suggests checking your business finances before quitting your day job as well. You can even run these ideas by local advocates for small businesses in your area. Check out online courses from the Small Business Administration and check out what they have to say about quitting your day job first.

Step 3: Test Out the Light Version of Your Business

Right now, your business could be at any stage from an idea’s most basic seed to a real revenue generator. And though you may think that quitting your day job will give you the time you require to make it work, remember: that’s just a hypothesis.

Why not take the scientific approach and test it out?

Try running a lighter version of your business. Don’t lease commercial space just yet; see how much you can achieve digitally. If your business relies on transportation, use a personal car for now.

If the business shows signs of growth and potential, then you’ve got a good indicator that it’s ready for prime time. If not, iron out the wrinkles before quitting your day job.

Step 4: Writing Down a Marketing Plan

Whether or not your business makes money is ultimately down to marketing — and your ability to attract revenue. Even if your side gig is generating money, nothing really

Know your target customer. Consult our recent post on nailing down a positioning strategy if you’re not sure how to go about this.

Create your unique value proposition. What’s the problem you’re helping people solve? What about your business is so different from other businesses that people will line up at your door? Until you can answer this honestly, you’re not ready to leave the day job.

Determine a marketing budget. One of the advantages of having revenue already coming in: you’ll have an idea of what you can spend on marketing. Even if you don’t have revenue yet, try to determine a budget from scratch. You can always adjust it as your business develops.

Step 5: Watch Your Business Grow Before You Leave

In Puneet Mehta’s write-up for Forbes, you’ll find all sorts of insights from someone who’s done it before. Mehta started talking to friends to look for leads before quitting his day job, and soon he was creating enough value for these clients that he didn’t have to wonder. The one-time side business was doing so well that keeping a full-time job on top of it was a disadvantage.

You don’t have to strike it rich before you leave your day job, but you do need some assurance that your lifestyle won’t change very much by making the switch. If your business is still too young to replace your current salary, try and re-invest in its promotion before you take the leap.

Step 6: Don’t Hesitate

All of the steps thus far are all about avoiding becoming Entrepreneur #1 at the beginning of this article. But what about Entrepreneur #2? What if you spend a lifetime waiting for a side gig to take off?

The answer is through consistent action. Don’t let your side gig be something you simply talk about. The entrepreneur’s life is about sacrificing your time now for rewards down the line. Give up a lunch break to work on your business plan. Ask friends about potential clients. Use part of one paycheck to purchase that website and set up a legitimate online presence.

In the words of Albert Einstein, nothing happens until something moves. Be consistent and be prudent — but never stop moving. It may seem like a long way off now. But one Monday, you’ll arrive to work and realize the day job is no longer needed.

What steps did you take before taking your small business full-time? Share with us in the comments below.

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About Author

How to build your business before quitting your day job

Dan Kenitz

Dan Kenitz is a freelance writer and ghostwriter who helps individuals and companies build their brands through valuable content.