Deciding to leave your 9-to-5 job for a dream of running a small business is a big deal. But how did eight people manage this huge career switch? They planned well, taking care of their money and feelings. If you’re thinking about starting a small business, here’s their practical advice.
Examining Your Personal Finances is Essential
Ludomir Wanot, who said goodbye to a well-paying job at Amazon, knew he had to sort out his money first. He was spending an astonishing $8,000 a month, mostly on fun stuff. After realizing this, he cut his monthly expenses to $2,500. This important step helped him focus on earning steady money, allowing him to leave Amazon and start his own in real estate.
You Need an Emergency Fund
Steph Gordon and Den Mathu, a couple from Toronto, also took a close look at their money. Before making the move, they paid off Mathu’s student loans and saved up a one-year emergency fund. When they left their corporate jobs in 2021, they had saved $36,565 and $30,000 in Canadian dollars, along with an extra $40,000 for their small business.
Understand Your Financial Runway
Knowing your “financial runway”—how long you can last without any money coming in—is key, says Mike Gardon, founder of The Break Community. He suggests starting with part-time work like freelancing or consulting to keep money coming in before fully diving into your small business.
Double You’re Budget Estimates
If you’re thinking of starting a small business, Katie McCarron from Portland Pet Food Co. has an important tip—double your expected startup costs. Things often cost more than you think, so it’s better to plan for more rather than be surprised later.
Have a Solid Business Idea and a Backup Plan
Katie Lauffenburger, co-founder of Wonder City Studio, made her move only after her ceramic home sculptures got great feedback. She also had a backup plan—a full-time job she could return to. Tyler Wright, founder of Defining Wealth, waited until his small business was making steady money for 6-8 months. His savings in stocks and real estate helped him focus solely on his small business.
Final Thoughts
Starting a small business isn’t for everyone. It needs careful planning, a good look at your finances, and a solid emergency fund. Make sure you can get by financially for a while if things don’t go as planned. So, if you’re thinking about leaving your corporate job for a small business, listen to this advice from those who’ve done it.
Keep an eye out for more helpful tips on small business success in our ongoing series: “Starting Your Small Business.”
