How I Quit My Job To Run My Business Full-Time

A few years ago, I quit my job, where I was earning a six-figure salary to pursue my dreams of being a full-time entrepreneur. In this article, I’m sharing exactly what steps I took to prepare myself financially to take the leap from being a full-time employee to being a full-time small business owner.

There are many different ways to make the transition from employee to small business owner. One of the most obvious is to quit your job whether you have a plan or not.

But I chose a slower and more thought-out approach because I wanted to maximize my chances of success. Not only that, I wanted to minimize the amount of stress I could potentially face—specifically financial stress.

If like me, becoming a full-time small business owner is one of your goals, then you can definitely do it and do it successfully too. As long as you are willing to plan accordingly, put in some effort, and be patient with yourself so you can transition in a way that makes the most sense for you to succeed.

First up, let’s discuss why I took the leap into entrepreneurship full time.

Why I quit my job to run my business

I’ve always dabbled in business in one way or another. From selling Avon to my mom’s friends (way back in the day) to owning my own retail business to having a wedding photography business, I’ve tried out and been successful at a number of side hustles. I’ve also had several failures and learned a lot about what it takes to run a small business.

All of these lessons lead me to the point where I felt like I was ready to pursue my passion of running my own businesses as a full-time gig. I quit my job where I was earning six figures (and had some pretty awesome benefits) because I wanted to do something that really mattered to me and wanted to live life on my own terms.

I also knew that being a small business owner would remove the income-earning cap I had as a full-time employee. That means there’s no limit to how much I can potentially earn as a business owner.

However, quitting my full-time job required some serious preparation on my end—both mentally and financially.

7 Things I did before quitting my job

Below are 7 things I did during my evenings and weekends to make sure I prepared myself as best I could and set a solid foundation to succeed as a small business owner.

1. I created my business plan

One of the first things I did when I came up with the idea for Clever Girl Finance was to put it all down on paper. I laid out all my thoughts and ideas for my business. The things that would be easy to accomplish to the things that were out of scope (and budget) that I planned on pursuing later were all included.

I also laid out my WHY for starting my business, who it would be servicing/helping, how much I would need to get it started and keep it running. I spelled out my short- and long-term business goals and a bunch of other important details about my business.

Creating that first pass of my business plan helped me think through what it was I was trying to accomplish before quitting my job. It’s something I frequently revisit and update.

Business plan tips

Before you spend any of your hard-earned money, you definitely want to layout your idea in the form of a business plan. It doesn’t have to be 100 pages long or in a fancy presentation format. But your business plan needs to answer a few basic questions, including:

What is your business about?
Who is your target / demographic, what problem will it solve for them and why should they buy from you?
What products and services will you offer?
How will you market to them?
How will you fund your business (start-up costs and continuous operating costs)?
Where do you see your business in 12 months, 24 months, 5 years, etc?
Who /what do you need to support you (people, tools)?

Also, keep in mind that your business plan should never be static. As you grow as a small business owner, your business may evolve or you may change direction completely. So your business plan is something that should be revisited often.

2. I set up my business entity, trademark, and bank accounts

Once I had my business plan laid out and was comfortable with what I wanted to begin working on over the short term (my brand, website, content creation, social proof, getting feedback, etc.).

I set up my business entity and business bank accounts (business checking and savings). I also began talks with my lawyer about establishing my trademark.

Tips for setting up your business structure

It’s really important to separate business finance from your personal finance for a variety of reasons. First of all, you want to make sure you are not violating any rules and regulations of owning a small business by ensuring your business is set up with the right legal entity (e.g. sole proprietorship, LLC, corporation).

You also want to ensure that you can accurately track your business financials (your transactions, profitability or losses, taxes). And most importantly, you want to avoid any issues with the IRS.

3. I bulked up my emergency fund

Knowing that my intention was to become a full-time business owner, I made it a goal to bulk my emergency savings up to cover more than the standard 3 to 6 months of basic living expenses. My goal was 12-18 months, which I figured was a good amount to keep me going in the event I didn’t earn enough of an income as quickly as I hoped.

My spouse works, so his income could be my fallback in the event that things did not go accordingly to plan. However, I wanted my transition of quitting my job to cause little or no financial burden on him. And I wanted to continue to be able to contribute toward our household expenses seamlessly.

Tips for building your emergency savings

Make it a goal to fully fund your emergency account for unplanned expenses and your sinking fund if you have planned expenses coming up. Calculate what your monthly basic living expenses are and then plan to put aside at least 6 months in savings before you quit your job. One year would be even better!

4. I created my business budget

Creating a business budget helped me lay out what my startup costs would be as well as my estimated monthly expenses that I’d need to pay to keep my business up and running.

It also helped me determine how much, at a minimum, I need to be making each month in income to not only cover my expenses but also to break even and start earning a profit so I can pay myself a salary.

Tips for creating a business budget

Creating a business budget is critical to the financial success of your business. It helps you track your income and expenses and helps you determine your business profits or losses.

Your business budget can also help you gain valuable insights on what’s working best or what isn’t in your business in terms of the products and services you offer and how much income they are generating for you.

I use Quickbooks to track my day-to-day transactions and to create reports for my accountant. I also use a platform called Guso to run payroll.

5. I waited until I was generating some income in my business

Before quitting my job, I made sure my business was generating a consistent amount of income that I knew I could scale if I went full time.

This meant that before quitting, I spent a lot of time testing out business models, and different products and services to see what worked. I continue to do as I grow my business.

Tips for managing your business income

Waiting until your business starts making some money is not a bad idea. It gives you an opportunity to “prove your concept” and also helps you determine what works well or not.

The income your business generates does not need to replace your work salary entirely, but it should be enough to cover your business expenses.

6. I started saving money for my business

Once my business started making money, the next thing on my agenda was to put some money in my business savings account and business emergency account. My goal was to get my business to the point where it was 100% self-sustaining before I quit my job. That means the business can fund itself, and I no longer fund the business out of my personal money.

The savings accounts I set up are specifically for future projects (goal savings), to keep the business running in the event of a slow season (emergency), and to pay my quarterly taxes.

The goal for my business emergency savings was to have 6 months of operating expenses put aside. This includes any contractor fees I needed to pay (i.e. a virtual assistant).

Tips for saving money for your business

Think of your business savings accounts (goal savings, emergency, taxes, etc.) similarly to how you would look at your personal savings. As a small business owner, you probably have short- and long-term goals for your business. You’ll need money to support them.

In addition, unplanned circumstances come up in business as well where you’ll need to cover the cost of something you didn’t plan for. So it’s definitely smart to start saving for your business as soon as you are able to.

7. I prepared mentally for the lifestyle & emotions that come with entrepreneurship

This is a big one. From being a small business owner and full-time employee together, I knew that a lot of work, time and energy was required to make my business successful.

While working full time, there were never enough hours to get things done in my business. Before quitting my job, I spent late nights and long weekends working on my business.

As such, I had to decide that this was something I wanted to do long-term. From scaling things down financially to support my transition to being everything and everyone in business, I realized that patience and rest (so I don’t burn out) would be my greatest allies.

Also, a ton of emotions come with being a full-time entrepreneur. There will be exciting highs of being your own boss. There will be low times of feeling like you made a big mistake or will never succeed.

But it’s important that you come up with ways to deal with the varying emotions you will experience. You also want to keep making progress toward your business goals.

Tips for getting support as you build your business

Find people on the same journey as you or who are further along than you are and stay in touch. Share how you are feeling, talk business and get motivated and inspired by each other.

Quitting my job led to success

Was it easy quitting my job and building a successful business? No, but taking the key steps of creating a business plan, budget, and building my business before I quit my job is how I have become a successful business owner. It takes hard work and tenacity, but you can succeed if you try.

Also, remember, patience and rest are critical on your journey. Need some help to jumpstart your plans? Check out our FREE business courses!

The post How I Quit My Job To Run My Business Full-Time appeared first on Clever Girl Finance.

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