The South African job market is very competitive. Thus, it’s important not to be hasty in the decision to leave your job for your business. Running your business while running a full-time job can be difficult to maintain, but it’s important to consider that your job can benefit you while you grow your business.
Your job can benefit you by providing a steady income for your personal needs, funding your business, and providing a safety net while you test your business idea.
In this article, we’ll discuss mistakes to avoid before leaving your job for your business, such as not having a solid business plan, underestimating the costs involved, not having savings for a safety net, and more.
1. Quitting Your Job Spontaneously
The frustration of not being fully present in your business is a common feeling. However, you should not be hasty in quitting your job, as you could find yourself in a difficult financial situation.
Finances are a major reason why you should wait before you leave your job for your business, but there are other reasons as well, such as maintaining good relations with your employer, adequate business planning, a solid network of professionals and entrepreneurs, having a good idea of the business market, and much more.
It’s crucial to wait. Once you’re certain that leaving your job is the best decision, you can start getting your affairs in order.
2. Lack of a Business Plan
A business plan is a necessary resource to give your business the best chance of succeeding. This is because a business plan needs to work as a roadmap for your business. It includes strategies for moving forward, conducting market research, anticipated milestones and future achievements, and much more.
The absence of a business plan means that your business is operating without clear direction. This can be particularly detrimental if you leave your job, as the lack of a business plan may result in financial setbacks that will be difficult to recover from without employment.
3. Not Having Savings as a Safety Net
A business cannot run efficiently without sufficient cash flow; if your business lacks funds, you may be tempted to use your personal money to support it constantly. It’s crucial to have personal savings that are separate from the money used to run your business. So, if you’ve saved R 120 000, ensure you have a clear split; perhaps R 50 000 will be dedicated towards your personal expenses, while the rest will be allocated towards your business. This allows you to avoid making unnecessary bootstrapping mistakes like investing all your personal funds into the business.
Many businesses take years to make a profit, so it’s important to remember this when you’re preparing to leave your job. Financial experts advise that you have a minimum of six months of living expenses saved up before you dive into your business full-time.
4. Underestimating How Much Time and Money the Business Needs
Entrepreneurs often find themselves working long hours, exceeding the typical 8-hour workday. This is largely due to the limited manpower in small businesses, which leaves business owners juggling multiple roles and responsibilities, which is very time-consuming. So, you need to consider whether you’re willing to put in the extra hours needed to have a successful business.
Additionally, it’s important not to underestimate the financial demands of a start-up. There are initial costs, marketing and branding costs, unexpected expenses, and slow revenue growth, all of which can quickly drain funds. Before you leave your job for your business, it’s crucial to have a realistic understanding of both the time and financial commitments needed to run a business and ensure you have the necessary resources to sustain it.
5. Not Having a Backup Plan
What happens if your business doesn’t succeed? Having a backup plan ensures you’re not left in financial distress.
Consider backup strategies such as pivoting to a different business model, seeking part-time work, or ensuring that you have enough skills to increase your employability if you need to re-enter the job market.
For example, if you start a personal training business but struggle to get consistent clients, you could offer virtual fitness coaching and workout plans. To reach a wide audience, you can market yourself on platforms like TikTok and Instagram. This way, even when your business isn’t where you intend it to be, you can maintain an income stream while you grow.
