When to Leave Your Job for Your Own Business

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Going from employee to full time business owner might be one of the biggest moments in one’s life.

Abandoning the illusory “safety” of a job in order to fully dedicate yourself to a project you have built from scratch is a huge decision and should be planned in a strategic way.

A lot of aspiring entrepreneurs get started on a part-time project, slowly grow it over time and then face the dilemma: continue to work on the side, or jump ship and allocate all of your time to your project.

For this reason, in this post, I would like to provide a framework on how to approach this decision and how to engineer it in the most efficient way possible.

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Assess your situation

The first critical point to highlight is that there is no correct universal answer to this question.

People are different and they can be in a different situation in life, so anyone contemplating the “jump” should evaluate their case personally.

There are a lot of parameters that you need to account for. Here are some questions you might want to think about.

What is your risk profile?

Are you comfortable taking risk or are you more risk averse? Entrepreneurship is inherently risky, especially in the short and mid-term.

Are you able to cope with the uncertainty or are you going to “crack” when things get tough?

Personally, I am a bit on the more “risk averse” side, so I prefer to take a more calculated approach. I will describe later on how I did that jump myself.

What is your life situation?

There are different places one might be. You might be a 20 years old who has all his life ahead and can take on larger risks, or you might be a 40 years old who has a spouse and three children that depend on you.

The approach should obviously be different in each case.

How confident are you about yours skills and tenacity?

Running a business has ups and downs. Are you confident that you are going to be able to manage anything that comes across your way? Will you be able to solve all problems and resolve all issues?

The more experience you have accumulated in an industry and the more expertise you have built, the better you are going to cope with challenges and the smoother the journey is going to be.

How much money have you saved?

In all cases, you should have a healthy amount of savings that you can fall back onto. Of course, this will differ again, depending on your life situation and risk profile.

A conservative number would be to have 6 to 12 months of living expenses built up. If you have dependants, you should account for their expenses too.

This is yet another reason that you should be saving aggressively. It allows you the flexibility and provides you the options to make bolder moves.

Do you have any debt?

If you are not debt free, you might want to consider slashing that debt first. Debt payments are huge negative cashflow items, so it is probably better to get done with them first, and allocate all your resources to your business afterwards.

Additionally, running your own business can be quite stressful, especially in the early days. Having an extra amount of stress due to a hanging debt is probably too much to bear.

What is your cost of living?

This is another critical aspect you need to address. After jumping from employee to entrepreneur, it would be wise to adjust your lifestyle expenses on a lower level. This will allow you to have a bigger “runway”.

How profitable is your business?

Focusing more on the business itself, you need to see how profitable it is. Does it have healthy margins, or you are almost “break-even” every month?

You should also examine how solid is the business. Make sure that it brings satisfactory profits for at least six months in a row before betting your future on it.

Additionally, you need to carefully assess the growth potential of the business. Will you be able to rapidly increase revenue by allocating time and effort on it? If not, then it might be too risky and perhaps you should examine a different side project.

How much control do you have in your business?

Control is one of the critical pillars of evaluating a business idea. If your business depends too much on an entity you do not have control of, you might get nasty surprises down the road.

Bringing structure and discipline

Another important issue that you need to consider is that of the self-discipline that you are going to need.

When you quit your job, you give up the external force that up until then was holding you accountable and was pushing you to actually work.

That is huge and lots of people underestimate its importance. The freedom you will suddenly get might work counterproductively.

If you feel that you might slip and spend your time in non-productive things, consider having some trustworthy friends keeping you accountable for your progress.

Again, this might differ from person to person, so make sure to get the right controls in place so that you remain productive for the majority of your day.

How I did it

As I have described in the past, I used to work for a huge, local, software and telecommunications company as a software engineer.

My partner and I had started a side project which we slowly grew. The success we were seeing with it probed me (and him) to consider the jump.

When I started seriously contemplating going full time on our business, I made sure to do it in the most calculated and planned way possible. Again, I am a bit on the “risk averse” side, so I had to make sure some checks were in place.

First of all, I was at a young age and I had no dependants. Moreover, I had zero debt and on top of that had accumulated lots of savings that would allow me to live off of them for years, in case the business blew up.

Additionally, it was clear that the business not only was stable, but also grew at a respectable pace, and that the potential it had was great.

Intentionally, I kept my cost of living low by avoiding unnecessary expenses. Unintentionally, I kept my cost of living low because I was working lots of hours and I did not have time for entertainment!

Finally, I had the support of my family who was supportive of me and I was certain that if all hell broke loose, I would always count on their help.

Basing all these factors, it was obviously a no-brainer decision for me. As time proved, it was also one of the best decisions I have ever made, and since then my income and net worth have exploded.


Making the jump from employee to entrepreneur is a huge life decision and a tough one.

Lots of people aspire to become entrepreneurs, but those that actually go for it are few and deserve our respect.

Since it is a serious decision, it should be planned strategically and with great care.

In this post, I have provided some questions that you need to truly ask yourself before committing to your business full time.

I hope it helps fledgling entrepreneurs to make the leap and succeed. See you on the other side!

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