Employee To Business Owner - Why You Need An Exit Strategy
If you're thinking about taking the leap from working for someone else to becoming your own boss, there are some things you need to consider. If you have ever experienced sitting in a cubicle while starting to day dream of your next big thing where you make the rules, it's time to take those thoughts seriously and start planning for your exit. Starting a business is one thing, growing it into something that will pay the bills and shower you with abundance is another. Growing a business usually requires an upfront financial investment. It can take time before you break even and eventually have healthy profit margins. These are things that need to be anticipated and planned for.
It makes sense for some to leave their full time job to work full time on their business right from the get go. Some people have savings that they can use to start a business and sustain their lifestyle while starting a business. For others, businesses need to be started on the side and they need to make a certain income from their business before they can leave their day job. Everyone’s situation is unique and the option of going all in or starting a side hustle depends on your circumstances and goals. No matter what path you take, you need an exit strategy to make a smooth transition and to know you made the right decision for yourself.
It really helps to work with a Business Coach or an Entrepreneur Coach to help you create a robust exit strategy and ensure you have looked at your situation and goals from different angles. An Exit Strategy needs to address the following items amongst others:
Start-Up Costs:
How much money do you need to invest in your business to start and grow it to meet your goals?
How much money do you have saved to invest in your business?
If you have savings, how long will your savings cover your personal and business monthly expenses while you start your business?
Are you qualified to apply for a business loan or grant to start your business? If so, where will you go for funding and how much are you qualified for?
Current Financial Situation:
What are your current living expenses?
If you had to cut down your living expenses, what is the amount that you have to pay no matter what?
What is your household income compared to your living expenses?
If you share living expenses with someone, which portion of the monthly expenses are you responsible for?
Financial Forecast:
Create a business plan that includes a forecast for your monthly expenses and revenue. The forecast needs to include separate forecasts for a slow, realistic and fast start so you have a better picture of your future circumstances.
How many months will you need to spend on your business before you break even?
How many months do you need to spend on your business before you replace your income from your day job?
How many months do you need to spend growing your business before you exceed what you made at your past job?
Mental & Emotional Circumstances:
Do you see yourself feeling okay about starting your business on the side and continuing a job in the interim?
Do you feel less than excited about your day job? Is your day job affecting your mental health and you need an exit urgently?
How will your life be different when you are working for yourself full time?
Once you have crunched the numbers and given a lot of thought to your circumstances and your goals, you are in a good position to make a decision about how to proceed with your business in a way that is right fit for you. If you want to make sure you cover all your bases, a Business Coach or Entrepreneur Coach can help you gain that clarity to move forward with confidence.
If you're ready to get your dream business off the ground and design your ideal life then send me a message to inquire about private 1-on-1 coaching.
Farewell, I look forward to hearing from you.
Ash Enns