When to Quit Your Job to Start a Business

There’s a misconception that entrepreneurs are huge risk takers. Sure, a few outliers quit their jobs (or school), rolled the dice Vegas-style, started a business and made it big. Yes, that happens. But it doesn’t happen often.

I only have my own experience, but having talked to a lot of entrepreneurs, most of them quit their day jobs in a calculated and methodical fashion. I was 27, had what would be considered a great job in the capital markets, and took a calculated risk to quit and pursue my entrepreneurial dream. Quitting is all about taking a calculated risk.

Here are three rules I used to quit my job.kevin-spacey-quit

Traction

Most people I’ve talked to started their business while working somewhere else. That was definitely the case with me. While working a day job, I would code, market, sell, and do whatever I could after work. My co-founder and I got our first customer and developed a working software product while having full time day jobs. We had reduced quite a bit of risk getting to that point. We also knew where to go to get more customers that could use our product. We had a tiny bit of initial traction which gave me confidence.

Runway

How long can you actually survive making zero salary? I knew full well that quitting my job would leave me with little to no income for a while. Let’s be realistic – you have bills, you need to eat and you need to sleep somewhere. There is nothing cool about having a lot of debt and not being able to survive. I timed and quit my job soon after I received my yearly bonus. I paid off most of my debt and had a couple months worth of savings to live off while we got things off the ground (which in hindsight wasn’t close to enough). But I was starting the business from a clean slate. I did a few things to extend my runway, which included living at home with my parents. Not the coolest decision as a 27 year old, but a necessity. Paying off my debt, living with my parents and having some savings all reduced my risk of failure. Many entrepreneurs fail because they’re forced to give up too fast because they run out of money.

Backup Plan

I feel that some people think it’s weak to have a backup plan in case your business doesn’t work. They claim, you should be ALL IN and willing to risk it all. That’s great if things work out. But, many business fail. Actually, most businesses fail; in fact, 95% of startups fail. There is nothing wrong with having a backup plan. The way I looked at quitting my job was there are only a few times in my life I would have such a good opportunity to start a business. We had a customer and a product. That doesn’t happen often.  How many times in my life could I go out and get a job?  Well, pretty much any time. But I knew I could always head back to a job in banking if things didn’t work out. Having a backup plan is just another way to reduce your chance of failure and inspire you to take that calculated risk to quit your job and start something new.

There you have it. That’s the thought process I used to quit my job. It was a series of calculated risks.

What do you think?

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Somen Mondal

CEO at Ideal
Somen is the Co-Founder & CEO of Ideal. Prior to Ideal, Somen served as Co-Founder & CEO of Field ID until it was successfully acquired by Master Lock LLC (a subsidiary of NYSE:FBHS) in December 2012. Somen’s leadership has helped earn Field ID a spot on the Profit Hot 50 and Deloitte Fast 50 Companies-to-Watch lists. In 2012, Somen was named winner of the Ontario Ernst & Young Entrepreneur of the Year award in the “Emerging Entrepreneur” category.

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