There are numerous aspects to consider when deciding whether to leave your day job and start a new business. Aside from the normal factors such as confirming your business idea, lining up prospective clients, conducting market research to determine the market rate of your product or service, developing a business plan, and so on, we believe that the single most significant aspect is:
Having Enough Money:
If you have no savings and/or credit card debt and other financial responsibilities, you simply must address these issues before considering leaving your job if it is your primary source of sustainable income. You might even wish to take on more work, such as an extra job or shift, or find some work at the best company to assist you to clear your debt faster and save money.
Establish a Savings Account:
My recommendation is to save at least six to twelve months’ worth of living expenses. You’ll want to jump in and focus on getting it started without worrying about how you’ll pay your mortgage or rent. If it is still in the early stages, I would encourage the person to consider starting the business as a side hustle until it generates enough cash to support a full-time transition.
Before you go full bore, you must have a nest egg of twice as much money as you anticipate needing to be stashed away. But why bother? As a side hustle, fund your startup as you go. You can begin slowly and gradually gain enthusiasm while you still have a net.
The figures on new businesses are worrisome:
More than half of all small firms fail within the first four years.
- Only about 4% of all small firms that start make it to the second year.
- Just 3% make it to the third year, while 9 percent make it to the fourth.
- Only 3% make it to the fifth year.
- 40% of small firms are profitable, 30% break even, and 30% are always losing money.
- 82 percent of businesses fail due to cash flow issues.
- Apart from consulting Business, Are You Ready to Establish a
- The company, strongly advises you to consult with an accountant before taking the plunge.