If you’re considering moving away from corporate life and want to be your own boss, there’s a lot of thought and consideration that should come before that decision.
But what are the most important things you need to know when you want to quit your job and start a business?
Here’s a few of our suggestions to think about before drafting that resignation letter:
A lot of it.
Aside from the cost of investing in a franchise, there are other things to consider. Once your income goes away from your full-time job, it isn’t magically going to reappear. And the day you open your business, money won’t magically reappear.
In fact, the general rule of thumb is that new businesses operate at a loss during their first year and eventually profit during year three. Of course, that risk is somewhat mitigated when you’re investing in a franchise that has a proven structure, but you’ll mostly be reinvesting anything you make to cover operating costs and employee salaries.
Because of that, you need to have another sustainable source of income, or enough savings to cover your cost of living for a significant period of time. It also means you should get out of debt, pay off any outstanding bills, stop charging things, and be sure to budget your expenses and lifestyle so you have a thorough understanding of what you’ll need to get by until your income returns.
Finally, it’s important to have a good idea if you’ll be able to get financing. While having the backing history and detailed business plans a franchise provides helps, your personal credit history can be just as important to your lender.
Don’t Burn Bridges
Here’s a number you shouldn’t be afraid of, but definitely should be aware of before quitting your day job: Roughly 80% of new businesses fail in the first year of operation, according to a USA TODAY report.
It’s numbers like those that underscore why franchising – and the intricate support system it provides – is such a good investment.
But if for some reason you don’t find success, you might need to return to your former employer, or get references from them for a new job. And if you do succeed, maybe you’ll want to do business with your former employer and you’ll need that contact to do so.
It’s generally just good practice to maintain relationships and leave on good terms. You never know where the road will take you.
Research and Prepare
Do thorough market research to see if your product is worth selling and your industry can thrive. There’s no point selling something no one wants.
Entrepreneur sums it up nicely: “Your job, long before you put in your two weeks’ notice, is to thoroughly examine the viability of your idea. Do some market research. Look at your potential competition and see if they’re doing anything similar. See if anyone has tried this in the past, and if they failed, why they failed.”
Even viable ideas can fail in the wrong environment. Do your research and be prepared one way or another.
Make sure you love what you’re doing.
Respect your current job, be a good employee, show up and be productive every day. Then, after work, give time to your business. If you still love it while doing it and simultaneously sacrificing time for family, friends, and leisure after work when you’d rather relax, you’ll probably be able to do it full-time.
Ready to take the next step in your franchising journey? Contact us to speak with a representative today.