New readers write me weekly asking how I made the transition from corporate work to self employed.
Specifically, they want to know how it works from a financial perspective. Do you leave your day job? Do you stay full-time and just work on your own project evenings and weekends? If so, when do you finally make the leap?
There are lots of ways you can leave your job for self-employment, but most of them are variations of a handful of categories.
Here are four typical ways you can leave your job. I’d love to hear your thoughts in the comments.
Keep working your current job. Build your business on the side. Leave when it can support you.
Moonlighting. Side hustling. Evenings and weekends. Whatever you call it, this is the most “safe” bet from a financial perspective. You continue to earn a salary from your regular job while building your business.
The financial stability is the main benefit of this approach.
But consider the downsides: you’ll be exhausted from working so much. You won’t have much time for your side business. In fact, you might never get it off the ground. You might not have a strong motivation to bring in income from your entrepreneurial activities (because your bills are paid).
Also, you might jeopardize your day job if your work gets sloppy due to your newfound distraction.
Negotiate working less at your current job. Earn just enough to pay the bills.
If you can swing it, this can be a great in-between option. You’ll still pay the bills, but your financial position will be tighter and might provide some needed motivation. You’ll also have more time to work on your side project.
This is the route I went for a few months before taking the full plunge. My employer at the time was open to me working half-time and I jumped at the chance.
The trouble is, most people will have a hard time negotiating an arrangement like this. You might also tip your employer off to the idea that you’ll be working on something else, so be careful.
On the other hand, if you’re serious about leaving, it probably doesn’t hurt to ask.
Find a new gig that pays the bills but gives you more time/freedom.
If you really want to lower your hours so you can focus more on your new business, maybe you should look for a different job that will let you work part time.
This might be especially good if you find a job that has low overhead and baggage outside of your working hours. Since this isn’t a career step for you, you’ll have freedom to take a job you might not otherwise.
Better yet, you could start freelancing in the field your new business is in. That way you’ll be immersed in thinking about your new field whether you’re at your job or working on your business.
Take the leap. Survive on savings.
This is the ballsy-ist option of all.
I first took the leap over 6 years ago. After a few months of part-time work, I decided I needed to fly without a safety net to really motivate me to make the new business work.
In some ways, this can work, but there’s a fine line. A little too much financial security might keep you from being motivated. Not enough security might paralyze you with stress or fear.
In the end it worked out fine for me, but there was a rough six months or so in there when I was stressed to the max and freaked out about whether it would turn out OK.
If there’s a chance you won’t handle the stress well, you might be better off with one of the other options above.
Of course, there are a lot more factors that will weigh on your decision. If you have a spouse or family, they’ll play a big part. Consider your family and relationship dynamics as well and think about how each of these options might affect them.
Now I’d love to hear from you. Have you tried any of these options? Are you thinking about any? Are there other options I left out?
Please share in the comments!
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