We have heard it all before, you hate your job and you work too many hours for the amount of pay you are getting at the end of the week. You have a great new product or business idea and because there is a secure income coming in, your ideas get put on hold until you have another blow out with your boss and your idea resurfaces. Here are 3 tips to help you decide if you should quit your job and start your own business.
Quitting your day job runs through to minds of just about everyone in this world because of the events that are happening at the work place. Just as you are about to quit, something positive happens and you get a temporary sense loyalty to your job and your dreams of becoming your own boss are put aside.
3 Tips To Determine If Your Business Will Work
Everyone wants to be their own boss but in order to not put yourself in further financial crisis you will have to make sure that you are heading in the right direction. For every prosperous business, there are the same amount of small businesses that have failed. Here are 3 tips that you can use to make sure your business ideas have a chance to grow and survive in the cutthroat world.
1. Test Your Ideas
Don’t quit your day job until you prove to yourself that your business idea is a good idea. Entrepreneurs are a passionate bunch and that type of enthusiasm can be a slippery slope, sometimes serving to convince oneself beyond doubt that success is imminent. Talking up your idea to your friends and family is a great way to initially vet your idea, but drinking your own KoolAid is a problem. What you really need are some cold, hard facts to back up your premise that the business idea is good. The facts come from either having incredible, in-depth knowledge from years of experience in that particular field or from testing your idea.
Testing your idea allows you to prove that your theory might really be a good idea. You can do this by putting your concept in front of people and listening to their feedback on your product’s usefulness and pricing. Create a simple prototype and give it away for free to your friends and family. You can quickly assess the value of your idea and, if necessary, do what we in the software business fondly refer to as a ‘pivot.’ It’s a polite way of saying the idea is not working and needs a change of direction, pronto. Refine it, if you can. Let it go, if you must.
2. Know Your Profit And Loss
Profit and loss is the key issue when running your own product or service based business. Id your product going to have enough margin to cover your cost? In a perfect world the higher the margin the better it is but if you are trying to sell a product or service that is real competitive, you will almost always have to cut your profit margins just to compete with your competition. Sometimes a 45% profit margin turns into 5% because of your competition. Avoid this by having a niche product that everyone wants but no one has.
Launching a business requires expending a lot of time, energy and money over the course of several years. Convince yourself that your product or service is actually something that will return a worthwhile net profit before taking on this colossal challenge. Accurately forecasting profit is tough, even when you’re an accountant.
3. Don’t Do Anything Crazy Until You Have A Backup Plan
Always have a backup plan in everything you do! If you are still at your job and hate it, start planning out your new business plans and find out if your business is going to work while you are still getting paid at your day job. You can set aside a percentage of your weekly check to have some capital for your business. This means that if you want to start a online business you will have money set aside for the yearly domain fee, the monthly hosting fee, and the website designer fee. The domain fee is about $10 a month and the base hosting fee is about$25 per month. The website designer fee is going to be where most of your expenses will go. If you are not starting an online business then you can start saving for rent, marketing and advertising fees. Use your current job to help you start your dreams. They owe it to you for all the stress and heartache that you have endured over the years anyways right?
Putting a safety-net plan in place before you leave your job can help on a lot of levels. Many people choose to stay put from fear of the unknown. Having a personal ‘pivot plan’ can get you beyond that stopping point. Even if you’ve done your due diligence and have ample evidence that your products and services might have real value, there are factors outside of your control that may cause your business to fail. For a brutal example, witness the latest economic downturn that forced so many good businesses to close their doors. Reduce your debt, get rid of as many bills as you can and sock away as much cash as you can muster before you resign. When you’re ready, give as much advanced notice as possible to your employer. Don’t burn any bridges that you might need to cross back over if you’re not successful.
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Are You Ready To Live Your Dreams?
Becoming your own boss, working your own set schedule are what dreams are made of but achieving this is not easy. Yes, there is a lot of work involved. It may seem like it is taking forever to get your business up and running but these are the growing pains every business needs to go through in order to become successful. No matter what challenges your business faces, stay positive and remember that with every challenge is an opportunity. I can guarantee you that a challenging day running your own business is a much better day than making money for your Ex-boss.