Tue | Oct 17, 2017

When to leave your job to start a business - 8-point guide

Published:Sunday | August 24, 2014 | 12:00 AM

Yaneek Page, Contributor

How to transition from employee to entrepreneur is a hot topic for many workers who are buckling under the financial stress of stagnant wages and rising prices.

The responses on social media to my last column which explored the issue from the perspective of lessons learned from the experiences of new entrepreneurs were overwhelming.

Most people appreciated the reality that starting a business in the current environment is tough; however, I was chastised by one person for 'making entrepreneurship look so hard nobody will want to start a business'.

My reply to such a charge is that my job is not to romanticise entrepreneurship and seduce people into starting business by downplaying the harsh realities, it is instead to be honest with readers so they know what to expect and can be better prepared.

WHEN TO LEAVE

Adequate planning and preparation for leaving your job is the crux of the matter to successfully venture into entrepreneurship.

1. Identify an amazing business opportunity first.

A common mistake people make is launching businesses they think are easy and can bring them quick cash - high interest payday loans, delivery services, catering, restaurants and business consulting or copying their previous employer's business are what employees commonly jump at.

Easy, quick and imitations won't give you the competitive edge needed to succeed. Focus instead on businesses that are needed, such as those I identified in my column '3 types of businesses Jamaica needs', of May 14, 2014.

If you're intent on doing what's common, try to be innovative and disrupt the industry. For example, a colleague of mine is innovating video production by reducing the cost of services by 70 per cent or more. He is rapidly gaining market share and increasing profitability while his competitors struggle to maintain dominance.

2.The next step in preparing to leave your job is testing the concept.

Do a test run where possible. Sometimes it's best to quit your job so you can give your business 100 per cent of your time and energy to improve the likelihood of success.

I took this approach when starting my business, but times have changed. It's a harsher economic environment and jobs are harder to come by if you fail.

For those with children, a mortgage, car loan, etc, it's necessary to exercise caution and get past proof of concept first.

3.Don't leave your job until you've done detailed business planning and sought expert advice from an experienced mentor or adviser.

Business planning can take longer and cost more than expected.

The worst thing is to run out of money paying for living expenses and set-up costs before you even begin operations. Know how you'll fund and scale the business.

I can't stress enough how critical it is to engage an experienced adviser who can give priceless insights on managing threats and challenges and capitalising on opportunities. It won't be easy either.

I remember practically running after an expert I really wanted advice from in a parking lot and eventually got helpful suggestions. In fact, one of the best pieces of advice I ever received before starting business was from an eminent attorney who said while my idea for legal funding was excellent and well needed, some wouldn't welcome it from a young, unknown woman who is an 'outsider' to the legal profession.

It was a good reality check which tempered my expectations and forced me to plan accordingly.

4. Leave when you have a strong network.

Connections have been known to open doors to contracts, partnership and many other resources and opportunities.

Employees should aim to widen and strengthen their network by engaging with business and professional associations, joining online networks such as Linkedin, Facebook and Twitter. If you are strategic this can help build your brand, visibility and credibility within your sphere of interest.

5. Have savings set aside separate from your start-up capital.

Resist the temptation to dump every cent into your business. Your savings should cover your living and other expenses for six months or more, depending on your revenue projections.

I have never met an entrepreneur who had enough money when they started business, so be prepared that cash will be the scarcest resource.

6. Have a strong support system you can rely on - especially family or friends who can lend a hand or a dollar when needed.

A new business needs as much nurturing and attention as a new baby - probably more, since business never sleeps.

Don't take it for granted that your family and friends will be there for you. Have discussions with them before to gauge their willingness and availability to assist. Clearly state the type and level of support you are relying on and get commitments.

7. Have a back-up plan. Big risk takers are comfortable with uncertainty but most people aren't. Consider the worst-case scenario if the business fails miserably, and have an exit strategy and recovery plan just in case.

8. Develop your capacity as a leader and manager.

Not everybody is suited for entrepreneurship so consider your skills and strengths and assess whether you have the passion, drive and characteristics needed. If you do, then create a plan to deepen your knowledge of business and continuously improve yourself.

One Love!

Yaneek Page is an entrepreneur and trainer in entrepreneurship and workforce innovation. Email: yaneek.page@gmail.comTwitter: @yaneekpageWebsite: theinnovatorsbootcamp.com