From Employee to Entrepreneur: 7 Signs You’re Ready to Take the Leap
By: Venus Zoleta
Published on: October 12, 2018 . Last updated: September 23, 2020 Category: Personal Finance
Are you a full-time employee and part-time entrepreneur who wants to become your own boss soon?
You share the same dream with many Filipinos. GoDaddy’s 2017 Gig Economy Survey found that 72% of workers with side businesses in the Philippines wish to become full-time entrepreneurs within five years.
The study further notes that the Philippines have more people engaging in side businesses (77%) than Singapore (51%) and Hong Kong (37%).
You might be considering to quit your job to focus on running your business. Is it really a good time to do so?
Look at things rationally before you resign from work. You aren’t quitting just because your day job has become less exciting and challenging, or your relationships with your bosses and colleagues have gone sour.
Assess your business and finances objectively. Here are the signs that tell you it’s time to go for your entrepreneurial dream.
Table of Contents
- 1. You’re in a Stable Financial Situation
- 2. You’ve Saved Enough for Your Emergency Fund
- 3. You’ve Learned the Basics of Running Your Business
- 4. You’ve Hit Your Business Goals Before Resigning
- 5. You Can Solve Problems on Your Own
- 6. You’re Willing to Make Sacrifices for Your Business
- 7. Your Business is Ready to Scale
- Final Thoughts
1. You’re in a Stable Financial Situation
You know it’s time to take the leap if you have no huge financial responsibility. Your partner or parents have a steady source of income and can support you financially when any setback happens.
Financial stability also means being free from debt. Plus, you have diversified short, medium, and long-term investments that earn passive income while you run your business.
On the other hand, resigning from work to focus on running a business is especially tough for breadwinners. For now, it’s practical to keep your job until someone in your family earns enough money to contribute to your household budget.
2. You’ve Saved Enough for Your Emergency Fund
It isn’t enough that your business is already earning profits. You also need enough savings to fall back on should your business fail or a financial emergency in the family props up.
Financial experts recommend building an emergency fund that can cover your daily needs and run your business for at least half a year.
Having enough capital to run your business keeps you from running out of money, which is one of the top reasons startup businesses fail.
If you have that amount in a bank account separate from the ones you use regularly, you’re well on your way to become a full-time entrepreneur.
3. You’ve Learned the Basics of Running Your Business
Learning the ins and outs of your business operations just as you’re preparing to leave your 9-6 job isn’t a good way to transition into being a full-time entrepreneur.
Ideally, you already have a good handle on running your business before you get out of the corporate jungle. At this point, you’ve also done your market and product research and testing.
Related Article: 6 Big Challenges Startups Must Prepare for in the First Three Years
4. You’ve Hit Your Business Goals Before Resigning
It’s important to set goals for your business—and meet them all—before you can finally turn in your resignation.
Business goals vary from one entrepreneur to another. For some, it means having a certain number of clients lined up for the whole year. For others, it means earning a five-digit or six-digit range monthly.
If you don’t have any goals yet, better set them now and have a clear execution plan and timeline before you even think about leaving your employer.
5. You Can Solve Problems on Your Own
Unless you’re running a business with several partners, you’re essentially a one-person team. Everything in your business depends on your decisions. Critical to sustaining your business operations are your problem-solving skills.
Can you manage to hurdle obstacles on your own already? Or you still need others to help you fix issues? Having a solid support system from bosses and peers is the huge difference between working in a corporate setting versus running your own business. No one will fill in for you when you need to take care of other things, so consider that when deciding whether or not to quit your job to run your business as a full-time entrepreneur.
6. You’re Willing to Make Sacrifices for Your Business
If you think resigning from work to run your business full-time will free up time for your social life, think again.
Becoming a full-time entrepreneur entails giving full attention to your business. Like doctors and news reporters, you’re always on call—even on weekends and holidays. That would also mean missing many important family events like birthdays and postponing personal plans like getting married or starting a family.
Are you sure you can—and you’re willing to—make those sacrifices for your business success?
7. Your Business is Ready to Scale
You’ve been working as a full-time employee while running a business on the side. Your business is already making money and you think you can take it to the next level. Perhaps, you need to hire and train more people, find a bigger location, or expand your product/service line. However, your eight-hour job keeps you from spending the time to grow your business.
In that case, being a full-time entrepreneur is the best route to take. It’s easier to scale up your business when you can devote time to it.
To recap, here are the questions to ask yourself when deciding whether to pursue full-time entrepreneurship or not:
- Can you afford to leave the comforts of your stable day job to go full-time with your business?
- Have you saved at least six months’ worth of living and business expenses?
- Do you already understand the basics of running your business?
- Have you achieved your business goals before quitting your job?
- Can you solve problems and overcome hurdles on your own?
- Can you make certain sacrifices to focus on managing your business?
- Is your business ready to scale, and you need to spend more time on it?
-  Side businesses teeming in PHL–GoDaddy survey
-  The Top 20 Reasons Startups Fail
-  Entrepreneurs Solve Problems Differently Than Other Professionals. Really! Here Are the 6 Ways
Venus is the Head of Content at Moneymax, with 15+ years of experience in digital marketing, corporate communications, PR, and journalism. She invests in stocks, mutual funds, VUL, and Pag-IBIG MP2. Outside of work, she’s crazy about cats and Korean dramas. Follow Venus on LinkedIn.