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As someone who has started their own company, I know how tempting it can be to leave a stable job in pursuit of being your own boss. However, there is no guarantee of success, and it’s important to understand both the rewards and challenges of entrepreneurship before making such a major life decision.
Here are a few things to consider:
1. The grass is not always greener on the other side
When you work for a company, you have stability — a regular paycheck, benefits like health insurance and clearly defined job responsibilities. As your own boss, all of those go away. You will be responsible for everything from client acquisition and project delivery to accounting, legal issues and more. There is no safety net if business is slow, and you may find yourself working much longer hours with more stress and uncertainty.
It’s easy to idealize being your own boss as all independence and freedom. However, the reality is that it also means being responsible for all aspects of running a business, both exciting and mundane. Before leaving a stable job, seriously evaluate how well you can handle the increased workload and responsibility as well as the financial risks of entrepreneurship. Additionally, consider that with a well-established company, you have the benefit of infrastructure, resources and experience that you don’t have on your own yet.
Related: 5 Books Every Entrepreneur Should Read Before Starting a Business
2. Have a clear business idea and plan
Don’t quit your job believing that the entrepreneurial spirit alone will lead you to success. You need to have a clear business idea, target industry, and customers in mind. Thoroughly research the viability of your idea by conducting market analysis, creating financial projections, and more. Additionally, determine how your value proposition is differentiated.
A robust business plan will account for your idea, target customers, competition, operations, marketing strategy, financials and milestones. This plan should demonstrate that you have carefully considered all aspects of starting and running the business. Seeking mentorship and feedback on your idea and plan from experienced entrepreneurs is highly recommended prior to leaving stable employment. Being your own boss without guidance or preparation is a risky proposition.
Related: 10 Things I Wish I Knew Before Becoming An Entrepreneur
3. Consider a trial run before taking the leap
Rather than immediately quitting your job, see if you can test your business idea on the side first. Work on it nights and weekends to generate initial sales and client feedback. This allows you to validate key assumptions from your plan in a low-risk way, providing an opportunity for course correction if needed.
If the trial run shows promising early results, you can consider transitioning to it full-time. However, if revenues don’t meet projections or you realize the idea isn’t as viable as thought, your job provides a safety net. Testing the waters in this low-commitment way reduces risk significantly versus an abrupt career change. Not all great business ideas are meant to be full-time from the start; an initial trial period helps determine that.
Related: 10 Questions to Ask Yourself Before Starting Your Entrepreneurial Journey
4. Know your financial runway
Have a clear understanding of how much runway – or length of time – you have financially to get the business up and running without a steady income. Creating this estimate is key to determining whether now is the right time. Consider your living expenses and any debt obligations, then evaluate your savings. This will dictate how long you can afford to forego a paycheck as you focus on launching the business.
Recognize that it often takes 6-12 months or longer before a new business becomes profitable. Without adequate runway, you may be forced to shut down just as things are taking off due to cash flow issues. Overly optimistic forecasts are common – ensure your projections are conservative. The better sense you have of true costs and your financial capacity, the more informed your decision can be.
5. Seek opportunities that leverage your existing skills and network
Your personal experiences, skills and contacts are potentially big assets for your own company. Look for business ideas that allow you to apply your knowledge, helping reduce the learning curve. This could mean leveraging a technical specialty, industry knowledge or management skills from your current job. Having an existing network of potential customers or partners who understand and trust you is also valuable. The more you can build upon existing strengths, the better positioned you’ll be for success immediately.
Related: 8 Things You Need to Know Before Starting a Business
6. Loneliness and isolation can be real risks
When you work for a company, there’s always the social interaction with coworkers to look forward to. But as a solo founder, your workdays may be spent mostly in isolation. Especially in the beginning, as you hunt for customers and clients, the lack of colleagues can make you lonely.
You won’t have water-cooler chats or team lunches to break up the day. Networking events can help, but it’s still not the same as an office community. This isolation can take both an emotional and mental toll if not managed well. Introverts may thrive more easily, while extroverts need to find strategies to mitigate the loneliness of solo entrepreneurship.
Going solo is an ideal next step for go-getters who relish the challenge of wearing multiple hats and owning the outcomes of their careers. Just be sure to realistically assess your financial runway, marketing abilities, tolerance for risk, and capacity for self-discipline before leaping. When done right, the rewards of being your own boss make all that hard work worthwhile. Just know what you’re truly signing up for by being in the driver’s seat 100%.
This story originally appeared on Entrepreneur
