You’ve probably seen tons of ads on Facebook that promise things like, “Start a business in your underwear! Work from home! Earn money online! Have a 7-figure income while looking fabulous and drinking margaritas on the beach!”
Far be it from me to hate on beach margaritas, but today’s blog is margarita-free. Instead, I’m serving up a healthy helping of truth and real talk about what you should really be focused on. If you’ve ever thought about turning your passions into a side hustle (or your side hustle into a business), this post is going to save you a lot of hand-wringing and heartache when deciding whether or not to quit your day job.
Here’s the deal: if those “make money online in five minutes” schemes seem to good to be true, then they probably are.
The reality of starting a business—or even getting a job you love—is that it takes time and effort…and more time. So if you’re plotting and scheming to leave a soul-sucking day job for something you’re passionate about and it hasn’t happened yet, it’s natural to wonder if you’re doing something wrong. It’s more likely that you’re just experiencing fantasy-to-reality whiplash.
But how do you ground your journey in reality, strategy, and security? How do you decide it’s time to be done with the day job? How can you tell if you and your new business are ready?
Real talk: most business owners and side hustlers fail to quit their day jobs in a reasonable amount of time.
In my time as a coach and mentor to new entrepreneurs (and just passionate people in general), I’ve watched many, many new business owners get super excited about working from home and quit right away….and watch their savings dwindle away while they try to figure out how to make money. I’ve also watched just as many talented, passionate creators keep their day jobs too long out of fear. Personally, I fell into this camp. I was a total scaredy cat, and I actually hindered my growth by by not knowing the quitting sweet spot yet.
So when is the right time to trade the day job for the hustle? The formula is actually less complicated than you think. Here are 5 ways to know if you’re ready to quit.
Starting a Business? Here are 5 Checkpoints to Tell if You’re Ready to Quit Your Day Job
Checkpoint #1: You have a plan.
More than anything, not having a plan kept me stuck in entrepreneurial groundhog day, repeating the same actions over and over again with no results, and I actually have a fondness for that throwing-spaghetti-at-the-wall stage because it was an important part of my process, but while I was in it, I needed the stability of a day job to keep me grounded, sane, and current on my bills.
When you’re ready to officially quit the day job, you need a tight business plan in place. If you’re truly ready, you know who you serve, how you serve them, and how your business makes money. You’ve even generated a little income and have a general sense of what you need to do next in order to grow.
If this sounds like you, congratulations! You’re on your way to being ready to quit! For a little extra security here, ask yourself these questions:
- Do I know how my business makes money?
- Do I have proof of my concept? (AKA Has your business idea made a little money yet?)
- Do I know my biggest goals?
- Do I know my next 3 steps after I reach those goals?
- Am I willing to be flexible if those goals need to change?
If you’re not there yet, it’s completely fine. Simply take a breath, recommit to your vision, and get a plan in place. I even have a free template you can use.
Checkpoint #2: You have an emergency fund.
Different people define “emergency” funds different ways. For some people, a healthy emergency fund is $1000 in your savings account. For others, it’s 3-6 months of expenses. Regardless of how you choose to define it, an emergency fund is basically money that you have socked away in case the wheels fall off.
The wheels aren’t likely to fall off because you passed checkpoint #1 and have a super smart plan in place, but…there’s no reason to reason to tempt fate.
When I was starting a business, I wanted the “work from home” dream. I wanted it baaaaad. I also wanted a new car and the ability to invest in coaching.
I had the money saved up in my account to do both, but I knew that if I invested in both at once, I’d wipe out my emergency fund cushion. While I probably could have made it work, I chose to forgo the new car in order not to put unnecessary pressure on my baby business, and that choice let me quit my job way sooner!
So what about you? Is your emergency fund in shape?
Questions to ask yourself:
- How much do I need to live on per month?
- Do I have about 3 months of cash saved up?
- How long will it take me to build up an emergency fund?
- How much money do I need to have saved up in order to feel comfortable to take the leap?
Checkpoint #3: You have a mentor.
While it’s true that many businesses fail within the first year, you exponentially increase your chances of success by getting a mentor or coach who can help you and your baby business succeed when you hit rough patches.
Think of it this way: If you’re starting a side hustle or building a business, you are giving birth to something. For a while, you’re effectively a new mom, and new moms need a ton of support while they tend to their new creations. Most new moms don’t go it alone—They have Grandma, other friends with kids, and Dr. Spock books to read. Your baby business isn’t that different than a human baby, so just like a new mom, you need a robust support system to stay sane.
Questions to ask yourself:
- What is my support system like right now?
- When I get stuck or hit roadblocks in my business or side hustle, who can I go to for help?
- What do I need to do to build the support system that will allow my hustle to be successful?
Checkpoint #4: You trust yourself with freedom.
And this, my love, is where even the tightest business plans have the potential to fall apart. When I was starting a business, I was drunk on my newfound freedom…time freedom, creative freedom, the ability to roll out of bed at noon and work in yoga pants! The freedom was delicious, and it was tyrannical. I quickly learned that time freedom doesn’t necessarily equal emotional freedom.
Sure, upon quitting my day job, I had tons of freedom, but it was a little scary. When you’re an entrepreneur or freelancer, no one tells you what to do. There’s no magic “what to focus on as an entrepreneur handbook” or yearly performance review from your manager. It’s all up to you: knowing where to focus, making decisions, getting the support you need, showing up to work on time, and even deciding when “on time” should be. Entrepreneurial freedom can be downright intoxicating, but if you don’t have healthy habits and routines in place to set you up for success, it’s easy to veer off track quickly. It's important to know your productivity patterns and what you need to do to be successful.
Questions to ask yourself:
- Do I trust myself to accomplish my goals, even when no one’s looking?
- What are my habits and routines like? How healthy are they, and where do I need to improve?
- How can I hold myself accountable to reaching my goals?
Checkpoint #5: You want to pursue this path even if success isn’t guaranteed.
When my sister was in acting school, a professor told her, “If you can do something else—anything else—do it.” While his scare tactics about the intensity of the acting world may have been slightly exaggerated, the point was clear: this path is going to challenge you, so make sure it’s worth it.
When it comes to turning your side hustle into a full time gig (or leaving your day job to pursue your passion full time), I’d amend the professor’s statement to this: “If you’re not willing to be challenged and be in it for the long haul, don’t quit your day job.”
Because it might take the long haul….but it’s so worth it!
Questions to ask yourself:
- Would I enjoy doing this/offering this/making this stuff even my business failed?
- How committed am I to making this work?
- Is this business or side hustle idea truly a passion for me?
- Would I regret not trying it?
While there’s no magical, margarita-sipping, one-size-fits-all formula to success, these checkpoints are a pretty good measuring stick for how ready you are to quit.
If you are ready, go on with your bad self! But if you’re not ready, it’s okay. You have plenty of time to get to work. And pro tip: stop resenting your runway. A dear friend of mine gave me this analogy when I was bemoaning my day job and resenting all the time I spent doing things other than pursuing my passions.
“The goal of takeoff is to get the plane successfully in the air, and it takes A LOT of runway to generate the speed necessary to lift off,” she said. “If the plane doesn’t have enough runway, it can’t take off. Or worse: it will take off and then crash. In some ways, your day job is your runway. Make sure you have enough of it so that your takeoff is smooth…but don’t stay on the runway so long that you miss the opportunity to fly.”
Want to get serious about turning your passion into your full time gig...or at least a robust side hustle?
Grab your free Creative Business Plan template below and click here to read the epic guide to creating a business plan!