Every employee has dreamed of calling it quits at their current job, handing in their resignation letter, and heading out to be their own boss. This is especially fuelled by the rosy picture painted by successful entrepreneurs who seem to be having the time of their life running their own corporations and making loads of money. Others want to set up businesses, make passive income and retire early to tour the world. Here, we will see, a few useful tips on how to quit your job and start a business.
On the other hand, many people have quit their jobs only to burn through their savings and capital and end up becoming bankrupt. Others have spent years growing their business without registering profits. Well, this shouldn’t be your predicament.
15 Useful Tips for How to Quit your Job and Start a Business
We have compiled a number of tips that will help you transition from the workplace into the corporate world without missing a beat.
With these tips, you should be able to trade hats and grow your business to astronomical levels. Here we go the 15 practical and useful tips on how to quit your job and start a business.
Quitting your job in order to start your company from scratch may seem like a good idea, but in a real sense, it’s not. The best way to hit the ground running is to grow the business while still employed.
This way, when you make the transition from an employee to an entrepreneur, it will be a little smoother.
Also, no way are you getting into building your new office block without doing research prior. Research will enable you to know the ins and outs of your service or product. You’ll also know if the product is unique, and if it will sell.
When carrying out background research, here are some of the areas that you need to include:
- Learn everything about your service or product
- Know your client base and your buyer personas
- Research on your competitors
- Find the right teams to partner with
- Understand what your most lucrative sales and marketing channels are
2. Come up with a business plan
Once you are done researching, the next step is putting everything on paper. Crafting a business plan before you quit your job and start your business will be a crucial success driver.
For instance, your business plan will come to your rescue when you are seeking potential investors, company stakeholders, and partners. Here is what to include in your business plan:
- An overview
- An executive summary
- A description of the company
- Your vision, mission statement, and objectives
- Information on the market and industry that you are delving into
- Strategy that you will employ to enter the market
- The team behind you
- Operational plan
- Financial plan
- Appendix with additional detailed information
You may like to read, 7 Tips You Must Have to Succeed in Technology Entrepreneurship.
3. List your funding options
Before you go out looking for funding sources for your company, you first have to have your personal finances in line.
If you resign from your post with only several hundred dollars in your account, yet you have rent, insurance, and telephone bills to foot, you may not be able to fully focus on growing your new company fully.
In addition to having your personal finances in order, you’ll also need to craft a financial plan for your startup. There are typically three options:
- One or several investors
- Your own savings
- A grant or an award for your project
Regardless of your funding option, you’ll need to have a plan in advance, because if you can’t source for the capital before getting started, your business will stall and you will have very few options.
Also, read, 13 Goals of Entrepreneurship.
4. Settle on a structure for your business
You’ll need to come up with the structure for your new business before you can call it quits. Specifically, you need to know the legal structure.
There are several types of businesses entities that you can look into:
- Sole proprietorship– If you’ll own the business all by yourself, and will shoulder all the obligations and debts, then you can go the sole proprietorship way. However, know that settling with this entity will affect your personal credit.
- Partnership- Alternatively, you can go with a business partnership, which is when two or more individuals are personally liable as the business owners. You can offset a lot of pressure by finding a business partner that has complimentary skills to yours. It’s normally a great idea to include someone to help your business grow.
- Corporation- If you want to shield your personal liability from your business’s liability, then consider setting up one of several kinds of corporations, including, S corporation, C corporation, or B corporation. Although each kind of corporation has its unique guidelines, the legal structure will make the business a different entity from its owners. As such, corporations own property, pay taxes, assume liability, enter contracts, and can sue or get sued just like other individuals.
- Limited liability company- One of the most popular structures for establishing businesses is the limited liability company (LLC). This structure combines the legal protections of a corporation with a partnership’s tax benefits.
In closing, go with the kind of entity that meets your current needs and your future business goals. It’s crucial that you learn some of the legal business structures that are out there.
Other things to consider include licenses, regulations, and permits, liability, taxes, capital, and control.
Also, read, How to Overcome Entrepreneurship Failure.
5. Register the company
There are a number of licenses that you’ll need to acquire before you can operate your business legally.
For instance, you’ll need to register the business with local, federal, and state governments. There are a number of documents that you need to prepare before you can register.
Articles of operating and incorporation agreements
In order to be officially recognized as a business entity, you first have to register with the government.
Corporations require an “articles of incorporation” document, that includes the business name, business purpose, its corporation, stock details, among other details about the corporation.
Additionally, some LLCs will be required to form an operating agreement.
Doing business as (DBA)
If you are not in possession of an operating agreement or articles of incorporation, you will be required to register the business name, which can act as your legal name, a temporary DBA name (for sole proprietors), or the name you’ve devised for your company.
You may also go ahead to trademark the business name to get extra legal protection.
Employer identification number (EIN)
Once you register your business, you may be required to seek an employer identification number from the IRS.
This may not be a requirement for sole proprietorships that have no employees, but applying for one will help separate your personal and business taxes, and save you trouble down the line when you employ someone.
Income tax reforms
In order to meet federal and state income tax obligations, you may be required to file some forms. These forms are dependent on your business structure.
You’ll need to confirm from your state’s website for details on tax obligations exclusive to the local or state government.
Local, state, and federal licenses and permits
Some businesses may also have to seek local, state, and federal permits and licenses to operate. The most convenient place to get a business license is from your local city hall.
You may like, Difference Between an Entrepreneur and an Intrapreneur.
6. Get an insurance policy
It might not seem like an urgent need at first, but getting the right insurance is crucial before you launch officially. It can be costly to deal with incidents of theft, property damage, or lawsuits. You, therefore, need to ensure that you are properly protected.
There are different kinds of business insurance out there, with some geared towards small businesses. For instance, if you have employees, you’ll need to buy workers’ compensation as well as unemployment insurance.
You may also be required to get other kinds of coverage, depending on your industry and location. However, most small businesses ought to purchase general liability insurance. This insurance covers personal injury, property damage, and bodily injury to you or a third party.
If your business renders services, you may want to purchase professional liability insurance. It covers you in the event that you falter or neglect to carry out some action that is required when operating your business.
7. Leverage on your resources
You should not have to spend your money if you can find alternative ways. You need to source for resources that are within your reach.
For instance, you may have a pal who is into web development. They might give you some special rates or complete a task for you on a need-to-know basis.
You can also contact your friends who have already established their businesses and have them refer you to a good accountant, marketing expert, etc. You can also join online book clubs to get more knowledge on entrepreneurship.
Finally, contracting all of your experts can prove to be expensive. You can opt to invest in online education for your team to have them learn skills such as email marketing, social media marketing, SEO, and much more.
8. Choose your team
Unless your goal is to be a lone ranger, you’re going to have to recruit or hire a team to help lift the company from the ground. Put in as much effort in choosing a team as you did in developing a product. Remember that it is the team that will build your product.
Identify the people you need in your team, understand the gaps that exist, and determine how your team will address these gaps. Additionally, you should establish how your team will work in synergy.
Define each person’s roles and duties, division of labor, avenues for feedback, and how to collaborate when they are not physically in the same place.
9. Brand and advertise your business
Before you commence selling your product or service, you need to establish your brand and garner a following that will be ready to buy your products when you open your business.
Here are some of the avenues that will assist in this:
- Company website. Establish an online presence by building a company website. Many customers head to the internet when they want to learn about a new business. A website is a proof that your business is there. It is also a great avenue to interact with potential and current customers.
- Social media. Leverage social media to advertise your business. For instance, you can use it as a promotional tool to give out discounts and coupons to your followers when you launch.
- Logo. Come up with a logo that will make your brand identifiable and use it consistently across all platforms.
- CRM. Source for the best customer relationship management software that will enable you to store customer data and help you improve on how to market to them. For instance, an aggressive email marketing campaign can help reach customers and communicate with your audience.
10. Leave gracefully
Leaving your job without completing your notice period, abandoning your final assignments, and not equipping your replacement are some of the most terrible decisions you can make in life.
Inasmuch as you are leaving to set up your own business, you can never be sure about its successor that your former workplace will not bail you out some way in the future.
Leave on a good note, and you might be able to benefit from this one day. Your old employer might send some clients your way based on your history as a trustworthy businessperson.
11. Revamp your portfolio/resume
Just because you own your own business doesn’t mean that you are done creating resumes.
On the contrary! Adding to your portfolio/ resume is crucial when growing your new business as you will have to prove to your investors, clients, and your team that you are worth your salt.
You may also like:
Starting a new business is not as easy as it seems. It will be more challenging than you envisioned. For this reason, you are going to have to dedicate a lot of your time and resources to the planning process if you want to see much income. As such, with the tips we outlined above, you should be able to quit your job and embark on a profitable adventure and avoid your business flatlining on you. You should be able to transition smoothly without any hiccups. I hope these tips will help you to decide, how to quit your job and start a business.