Important things to do before quitting your job to start a business
The allure of quitting your stable corporate job to start your own business is strong for budding entrepreneurs. But embarking too hastily without laying proper foundations sets you up for major struggles.
Refine your business plan
Have a comprehensive business plan fleshed out covering your core offerings, target customers, operations, marketing, and financial projections. It will change over time but provides critical direction upfront. Analyze if your concept has merit and viability to move forward confidently. Analyze competitor products and services and conduct surveys or interviews to confirm demand. Talk to real prospective customers to prove your assumptions about pain points. Crunch the numbers to determine how much startup and operating capital you will realistically need until profitability. Secure commitments so you have a financial runway to avoid immediate cash flow panic. Before taking a leap of faith, start your business as a side hustle while still working full-time. Starting small and lean lets you get the model working without high risk. Then you gradually scale up.
Prep significant savings
Beef up your savings to cover a minimum of 6 months living expenses if you hit business hurdles once self-employed. Having ample savings buys you time to course correct or pivot if your cash flow is erratic in the early volatile stages after quitting your paycheck. Identify business areas you lack skills in like marketing, sales, finance, HR, operations, etc. While still employed, take courses and get mentoring to gain the most foundational experience. Shore up your capabilities so fewer things surprise you post-launch. Take advice and guidance from trusted mentors who are successful entrepreneurs themselves.
Join a small business peer group like Entrepreneur’s Organization for broader mentorship. Outsource specialized work like your bookkeeping and web development to experts versus attempting everything. Work smarter, not harder as a solopreneur. Secure health insurance coverage that’s not tied to your employer. Get quotes on general business liability insurance. Explore disability insurance or other policies to transfer financial risks. Don’t start uninsured – unexpected events tank under-prepared entrepreneurs.
Form a legal entity
Choose and form a formal legal business structure like an LLC or S-corp. Consult a tax expert to ensure proper registration. Having your legal entity established provides protection and credibility right out the gate. Create a basic website or landing page to describe your product or service and capture leads. Run Google and social media ads targeted to your ideal audience to gauge interest and assess messaging that resonates. Validating demand directly with real potential buyers is invaluable. Determine your business name, logo, colors, fonts, messaging, and other brand identity components. Register associated domains and social handles. Strong branding makes a professional impression as you depart your corporate identity and venture out on your own. look these up for more details.
Start talking to customers
Initiate conversations with your network and ideal customer targets. Share your plans and value proposition. See if they would buy from you. If you have a non-compete, non-solicit, IP assignment, or other restrictive clauses with your current employer, review them closely to ensure your new business doesn’t violate anything. Protect yourself legally before using company resources or contacts. Set a target launch date to make quitting your job and formally opening your business real. Working backward from this deadline, outline key milestones on your roadmap. Avoid delaying indefinitely – pick a firm kickoff then methodically work toward it.
