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Should I Quit My Job to Start a Business

Are you wondering if you should quit your job and jump into your full-time entrepreneurial business?

How Much Money Do You Need To Live?

The first thing you're going to want to do is to consider how much money you need to live. What do you need to sustain your current lifestyle and way of living? What do you need for rent, for groceries, for hydro, or any of the things you call necessities in your life?

You're going to want to ensure that you're able to make that income and more. Be able to cover your business expenses and have more left. The worst thing is to have to live paycheck to paycheck or client to client as a business owner or entrepreneur. So you want to make sure you also have a buffer. Calculate what it's going to take to maintain your living and what you need to earn to do that. It depends on what your threshold or risk threshold is, personally.

I'm a risk-taker. For example, I remember that I quit my job, and I was living paycheck to paycheck, month to month, in my business, when I just got started. It was very stressful. It was extremely challenging, and a lot of panics, but I got through it. Today am way past a six-figure income in my business. I don't regret doing that leap. But not everybody has that mindset and the resilience to quit their job and jump in with nothing. So you have to have a sense of how much are you willing to cut back on your living expenses? Do you want to have that hustle energy, or do you want to jump into this with a bit of a buffer and be able to breathe while having a sustained momentum?

 

How Much Money Do You Need?

Once you know the numbers, the numbers of what you need for your lifestyle, you're also going to want to have the number for what it is to maintain your business. You can operate a life-coaching business, a consulting business, and many online businesses for as low as $500 a month. I'd say that's a comfortable amount. For me, right now, it does take a lot more than that to operate my business, maybe a couple of thousand to operate my business, because I have employees and contractors and all that I work with. But when I just started, I started with about paying $200 a month to maintain my business with systems. Then that grew to about $500. As I grew my business, so did my business expenses grow.

But comfortably enough, you should be able to operate your business with as little as 200 to $300 a month. Again, if you can have $500 minimum a month to put into your business, then that's great. Remember, if you have more money to put into your business, you can also hire freelancers or part-timers to help you. If you have not so much capital, you're going to want to invest more time, so think about that. What are you going to need to operate your business?

 

Calculate What You Need

Now you have your lifestyle number. You have your amount that you're going to need to operate your business. When you add that together, that gives you what you need every month. If you want to give yourself a three-month buffer, let's say it costs you $2000 to live. If you're a single person, it takes you maybe even less than that. I'm in Toronto. Living on $1,500 a month is pretty realistic here, but let's say it's around $2,000. You're a single person, $2000, and your business expense is $500 a month. You now know that you need $2,500 bare minimum in terms of income.

Now, if you want to have a three-month or six-month road of getting your business off the ground, six months times, 2,500 would equal 15,000. Therefore, you would want to have $15,000 before you quit your job, so you have a six-month buffer of getting your business off the ground, which is super realistic if you're clear as a consultant or coach, and you know who your target market is, you know what you need to do. Getting your business off the ground in six months is super doable.

Now let's do this calculation again. Let's say you have a family. Let's say you are a new family. That was my experience, a new family just had a baby, and you have two adults and one child at home. Your expenses are $3000 a month. $3000 a month to maintain your lifestyle, and then your business expense is $3,500 to run your business. So that means $3,500. You want a six-month buffer. What is the calculation? Calculate six months times 3,500 equals $21,000. And now, you know you want to save that much buffer for that six-month runway.

I know we've been using six months as a buffer, but realistically, I would give yourself a year, to be honest. I know that I was a risk-taker, and I gave myself no buffer, had sleepless nights while parenting a newborn, all of that stuff. If you are a Ninja, if you got that fire in your belly, go for it. If you don't want to have sleepless nights and don't want to be panicked about paying the bills and all that, then I would recommend you get yourself a nice, comfy 12 month-buffer.

Let's do one more example. Let's say you have more expenses. You're going to do a $1000 a month for business operating and $4000 for your lifestyle because you're a family, and you need to provide for yourself and more. So let's say that's $5,000 a month. You need. $5,000, and you're giving yourself that a 12-month runway, so you don't have to stress. $5000 times 12 months is 60K. If you have 60K in the bank, go ahead, quit your job and run for it.

The key to all of this is knowing the numbers of operating expenses, lifestyle expenses, giving yourself a timeline or runway. Most importantly is, do you have a strategy? Do you have a clear strategy with mentorship or a business coach to help you so that you're not trying to figure it out for the six to 12 months? Please don't do that, please. It won't take six. If you're fumbling through the six months, you cannot count on yourself being able actually to get it off the ground at six months. But if you have a transparent strategy system with mentorship and put that in place, and you press play and count from those six months, you will see results. 12 months, for sure, you will see the results. So be sure to get mentorship. I have a mentorship program, and it's so power-packed with everything you need plus live coaching. So be sure to check that out.

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