Should I quit my job to start a business?
Escape the City's take on the different startup paths you can take to get your idea out into the world.
There is no one way to build a business - choose your own path.
If you behave as if there is just one way to build a business, you will put a huge amount of pressure on yourself. The clearer you are about the most viable businesses for you, the more you will save yourself difficulty further down the line. Define success for yourself and stay strong - it is hard to maintain your definitions of success in a world that is constantly bombarding you with other people's ideas for how things should be done. But this isn't about anyone else, this should be about what feels right for you.
Here are three different approaches to starting up, there are pros and cons to each so it's up to you to decide what works best for you and where you are right now.
Quitting your job to work full-time on your business is always a temptation when we are ready to launch an idea. If you're seriously considering taking this route, be sure to consider your financial runway and what needs to happen before you take the leap. We'll talk a bit more about this in my next email, including a tool we've designed specifically to help you practically plan your financial runway for your escape.
How to fund it:
- Use your savings: build an adequate runway so that you can support yourself as you build your business, be sure to factor in costs for up to a year and always allow for more budget than you think you'll really need.
- Earn money on the side: use any existing skills to make a side income, join a freelance network like upwork or reach out to existing contacts in order to secure a few contracts so you can worry less about the money and more about the building.
- Generate revenue asap: get your business to a place where you'll be achieving revenue to pay yourself asap before leaving employment. This requires a lot of prep and work before you leave your job, but it can certainly be done.
- Raise investment: it's not easy, but by raising investment you'll be in a better place to pay yourself a salary as you build out your business. There are a number of avenues for raising finance, from crowdfunding (like we did for Escape the City) to angel investment. Make sure you weigh up the pros and cons of each and see what fits best for your business. For tips on raising investment, check out articles from startups.co.uk.
PRO: You'll have lots of time to work on your business without having to worry about your day job. Having all of your time to dedicate to the business should mean that you'll make progress and generate the first revenue more quickly.
CON: You'll have to deal with the fear and pressure. When you quit your job to go solo you're putting a lot of pressure on yourself to make it work very quickly. Unless you're able to raise investment and pay yourself a salary, you should be prepared to feel the intensity.
2. Build a business from your job
Using your job as a platform from which to build a new business is a safe and smart route to entrepreneurship, as long as you can dedicate the time to work on it. Lack of time is the biggest challenge you'll find when building a business alongside full-time employment, it's easy to sideline unpaid work when you're so busy doing your paid work.
How can I make it work?
- Build on the weekends: set aside fixed time each week that you'll dedicate to working on your business, this will be crucial to making any progress. Pick a day and time, and stick to it. Set yourself time-sensitive goals to ensure you stay on course, otherwise, it's easy to get months down the line and realise you haven't really ticked anything off your to-do list.
- Ask for a Sabbatical: interested in spending more time building your business, but aren't interested in leaving your company just yet? Ask for a sabbatical. It can be a great way for you to have the time and space to explore your entrepreneurial ambitions without burning your bridges. There is a time and place to ask for a sabbatical, the biggest tip I can give is not to make it about you, you must consider your employer's needs as well (More advice on that here). - Go part-time: much like asking for a sabbatical, it is possible to negotiate a move to part-time with your employer. In recent years there's been a cultural shift towards flexible working, and asking to go part-time could be a good alternative to leaving your job as you build out a business. Again, be sure to consider your employer's needs and whether you'll be able to cover your responsibilities with reduced hours. Be as specific as possible, including proposed hours and times, and consider the wider impact on your role and team, by covering these bases you'll be in a stronger position when you have the conversation.
- Go freelance: going freelance can be a great way of funding your business while maintaining a steady income. Depending on the size of your employer, they may be willing to hire you as a contractor as it saves them money on taxes and NI. This also frees you up to take on other clients and projects to build out your portfolio. It's worth remembering that as a contractor you don't have the same working rights as an employee, and if you're planning to become a parent or have an ongoing illness this may not be the best route for you at this stage.
PRO: The financial pressure will be lower, as your job is your funding strategy. By reducing the pressure of making money from the outset, you'll hopefully be able to spend more time on the building than the selling.
CON: Having a full-time job means you'll have less time & energy for you to work on your startup. It's difficult to carve out the time to work on a business when you're working in full-time employment, but if you can negotiate part-time hours, a freelance contract or a sabbatical you'll be able to test out your business idea and feel a bit more secure about things should your business struggle to generate money immediately.
3. The side project
Side projects are much more than just hobbies, they are indicators of what you are capable of building. In an age where so many people are talkers and so few are doers, side projects can be the factor that sets you apart from the rest of the pack. A side project is a great way of a) testing out an idea you think might someday become a full-time business, and b) building skills that will be valuable in any future career should you decide not to start up. The benefits of a side project are clear: you can keep your job so you don't need to worry about money, you'll be able to build something you're excited about, and you'll develop new skills that will help you in future entrepreneurial endeavours or in a new career.
Why do it?
- Start a project that excites you: if you look at your dreams and aspirations, there are probably about 10 different careers you wish you were able to take and try out for a bit. This is an opportunity to explore some of those ambitions without having to retrain in a given field, you don't need anyone's permission or qualification to do the things you're interested in (unless it's some sort of speciality medical profession, please don't start operating on people without proper training).
- There's no pressure of it having to support you: one of the biggest benefits of starting a side project is that by framing it as a project and not a business you will be more flexible and open to challenge based on how things go and the feedback you receive. Often when we get into building mode, we try to make a square peg fit into a round hole because we want it to work as a business and we need it to make money to support us. By framing it as a project you'll be more agile, able to make changes based on tests and don't have to worry about making a living from it.
- Learn new skills by building: by working on a new project, regardless of what the project might be, you'll build a whole host of skills that you wouldn't otherwise have. If you do try to make a business out of your side project, you may learn how to pitch, how to build a brand or how to makes sales. Whatever you end up doing you'll gain skills that are valuable.
- Have a fulfilling creative outlet: much of our work is very process-based and leaves little room for creativity. Building up a side project is a great creative outlet, and in doing so you'll find that you'll be thinking more creatively and strategically in your paid work (bonus!). This is why Google famously allowed 20% of each employee's time to be used to work on whatever innovative projects they wanted, and how Gmail and Google Talk were born.
PRO: By working on side projects you'll be able to test out many business ideas to see which one fits best for you, this will keep your business agile and is low risk. Additionally, there are many unseen career direction benefits. By trying out something you're curious about, you'll explore whether or not it is something you'd really like to do as a full-time job. Finding out that actually, it isn't something you really enjoy in practice is just as valuable as finding out that it is something you'd like to continue.
CON: It might feel too slow, or not ambitious enough. This is a big barrier, most of us think in all or nothing terms, either "I'm quitting my job and starting a business now or I'll wait to start until I'm ready to do so". The problem with this thinking is that the time is rarely perfect, and you can use the time working on a side project to test out business ideas and build up a business so that you already have a load of the work done by the time you decide to quit. Another con is that the success of your side project will depend on the amount of time and energy you invest into it, which isn't easy when you have full-time employment.
Choosing the right path for you
You’ll often hear entrepreneurs say “If I had known how hard it was going to be when I started, I wouldn’t have started.” But you also hear those same people admit, whether or not they succeeded, that they wouldn’t change the experience for anything. Why is the entrepreneurial journey so intense and why would you want to undertake it? The clearer you can get on your motivations, the more you can make decisions based on what you want to get out of the ride.
Run towards something
You want to run towards something you care about rather than away from something you don’t care about (i.e. a soul-sucking job, an evil boss, etc). So many of us fall into the trap of projecting all of our hopes and dreams into our startup and act as if everything we want and need in our lives is going to be found in this entity that we are building. There are many good reasons for starting a business, but escaping a negative current reality shouldn’t be the only one…
Clarify your objectives
There are a few obvious reasons for wanting to start a business and most of us share the main ones. However, knowing which are your key drivers up front will really influence your decision-making process down the line. Are you in this for 1) Money / Security? 2) Purpose / Passion? 3) Independence / Autonomy? 4) Impact / Change? 5) Skills / Challenge? 6) Personal Growth? Can you get honest with yourself on which matter most to you? You'll want to develop your 'Good idea criteria', here are some prompts for you to figure them out.
Ensure you’re up for the ride
Starting a business is hard. Really hard. The main reason for this is that you’re trying to create something that doesn’t exist and see it impact the world in a positive way. This is also why it is so fulfilling. The more you can be clear on the sacrifices you’ll make and the challenges you’ll encounter on this journey, the more you’ll know what you’re letting yourself in for and be able to prepare yourself.
Avoid the trap of never starting
The fear of spending +5 years and lots of money building something that doesn’t work is the main reason most people don’t start. It's never been easier or cheaper to start something new, and you don't need to commit to doing it for the rest of your life, just get started.
Define success for yourself
The more you look into startups, the more you’ll feel the pressure to build the next runaway success. In today’s hyper-connected world it is a battle to make your definition of success your own. Success for you might be building a £10m business, but equally, it could be starting a venture that catalyses your career change into a new job by helping you acquire new skills or launching a side-project that brings you some extra income.
Embrace unpredictable outcomes
Your motivations, your definition of success, and the opportunities that you can take advantage of will all change as you start turning your ideas into realities. Successful entrepreneurs accept uncertainty, act on what information they have access to today and trust their ability to create whilst reacting to unfolding events. Creating in the unknown is both the beauty and the challenge of the entrepreneurial journey.
Invest in your future self
The decisions you take today will impact who you become over the coming years. You are not the person you are going to be in 5 years time. Entrepreneurs don’t wake up one day and decide to be entrepreneurs, they decide to start things, and become entrepreneurs through repeated action and learning. Don’t beat yourself up for not being an entrepreneur today, the only way to become one is to keep taking one step after another along this path.
Create foundations for success
Find a way to create a surplus of time or money (ideally both!) to give you the breathing space to build. The #1 cause of startup failure is running out of cash. The longer you can give yourself on a skinny cost base, the more likely you are to find the way that works. Tactics here could include: 1) keeping your day job to fund your startup, 2) negotiating down to a 3 or 4-day week, 3) finding regular contract work to pay for your life whilst you build on the side.
Choose the right founding story for you
There is no one way to leave employment and start a business. Some people go all-in, quit their jobs, and live off savings or raise early-stage investment to keep them going whilst they build. Others start their business from the safety of their jobs and work evenings and weekends until they have reached certain key milestones. And others still go part-time, take a sabbatical or do freelance work to stay afloat whilst building. What works is what works for you.
It is a lot harder to build a business solo. Business partners are there to pick you up when you’re down and to share the successes when they come. The power of two people obsessing about a problem is much greater than simply 1 + 1. However, you can’t simply shop for a business partner - you have to build an authentic and trusting relationship over time. Start side-projects with different people by all means, but commit to a formal co-founder relationship with more preparation and lots of clear expectation setting.
Clarify what a startup really is
By far and away the most helpful definition of a startup is this one by Steve Blank: a startup is a temporary organization formed to search for a repeatable and scalable business model. Startups are NOT small versions of big companies. They are a collection of people united by a clear problem and a set of shared assumptions and a vision for how they can profitably build a solution. All of your ideas are hypotheses until reality proves them right/wrong.
Distinguish between projects and businesses
Startups can take years to turn into businesses. However, successful startup projects can be launched in a weekend. You will feel the pressure to build a business and you will beat yourself up that your idea doesn’t look anything like one. Relax about building a business and focus on launching a successful startup project. If version 1 is successful you may decide to undertake the hard work of turning it into a business. But first, focus on the project. For some examples of cool side projects check out this site, and for more tips check out this brilliant blog.
Avoid the job trap
At the beginning of your entrepreneurial journey you may feel like you have 10 jobs that you have to do at the same time – all of which are poorly paid (or not paid at all!) and none of which you can delegate. You can’t go on holiday and you can’t switch off. Whether or not you want to be at the helm forever, in order to avoid creating a job that you can’t escape from, you want to be building towards a business that can operate without you. Design for this from the off.
Start the right idea for you
Good ideas are worthless. But good ideas, executed excellently can be extremely valuable. In order to turn the idea for Facebook or Google or Airbnb or Uber into a successful reality, you need to have access to the right skills, experiences, capital and networks. There is a massive difference between having a good idea and being the right person to turn a good idea into a successful reality. Good ideas are person-specific and context-specific. (For more on finding the right idea for you, be sure to read through my last post).
Start where you are
The test for a good startup idea for you is going to be determined by Who You Are (location, passions, interests, resources), What You Know (existing skills, industry knowledge, macro/micro understanding of trends or concepts) and Who You Know (strong relationships, membership of communities, access to networks). Start where you are today and you will imagine possibilities that are achievable for who you are and where you are in your life today.
This article was written by Skye Robertson, Head of The Escape School. If you're serious about becoming your own boss and building something for yourself, check out our startup hub page where you can find events, programmes, and resources to help you get your idea out in to the world.