Many people have day jobs and also some high aspirations for something else. A person may want to become an entrepreneur and may wonder if he or she can keep a full-time job as well. Maybe you have passive income or you work on a freelance basis and are wondering if you should quit your job. You may be ready to undergo a drop in income and consider yourself to be semi-retired. Here’s a look at some considerations when deciding if you should quit your job.
1. How secure is a business you are starting?
About a third of businesses with employees fail within two years, while half fail to make it five years, according to the Small Business Association. If you are thinking of starting a business, if at all possible, you may wish to keep a job at first.
To know if you can quit your job to invest the time you need to start a fulltime business, it’s best to do as much research as possible. Get numbers on the success rates of businesses of your kind. Check out the demographics in your area and the market—how many businesses will you be competing with? The better these numbers shape up for you, the more likely you are to be able to quit your job.
2. Do you have options and various plans?
Perhaps you’re not going the route of setting up a fulltime business. Maybe you’d like to do some travel, relax, or work on some music you’re writing, etc. A good question to answer involves alternative options. This can involve passive income, the ability to begin earning on the side by doing something like tutoring or mowing lawns, putting one of your existing skills into play; or selling an item or eliminating debts or responsibility?
If you run into trouble with living expenses if you’ve quit your job, do you have good employment prospects, such as a sister-in-law with a daycare center who could use some help, a skill that is in high demand in your area, etc.
3. Do you have a plan for living on less?
An avenue that a lot of people take when quitting their jobs is living with less expensive than before. Perhaps your children have just finished college, perhaps you’ve just paid off your home or have sold a cabin or second home. Perhaps quitting your job means switching from two cars, one for each spouse, and going to just one.
You may also have committed yourself to a different standard of living, using resources more frugally, etc.
While quitting your job is a huge step, keep in mind that you do have various options and ways to recoup if things don’t go exactly like planned.